This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

A Look At Solar City As Shares Soar Over 70%

Chris Lau, KAPITALL Contributor: To find evidence that there are positive developments in solar energy, look no further than SolarCity (SCTY). The company became public in 2012 at a share price of $8, and closed recently just shy of $20. The company announced that it was added to both the Russell 2000 and 3000 indexes. Per Kapitall, SolarCity engages in the design, installation, and sale or lease of solar energy systems to residential and commercial customers, or sale of electricity generated by solar energy systems to customers.

In Q3/2012, the company deployed 156 megawatts (“MW”) of solar panels. The installation volume increased 117% over the previous year. In Q4 (which was reported on March 6, 2013), deployment dropped to 48MW, but it was still a 129% increase over the previous year. SolarCity lost $1.10 per share, missing estimates by $0.66 per share on revenue that missed by $11 million. The company generated sales of $25.3 million. The company forecasts installations will be 250MW in 2013.

SolarCity forecasts that it will deploy 250MW, consisting of 76MW commercial and 190MW residential. The financing mechanism is a core part of SolarCity’s business, as Forbes magazine details here. By making solar power installation affordable in the United States, the market is expected to grow to $5.7 billion by the year 2016. In 2012, residential solar installations were a $1.3 billion market.

Financing Mechanism

To drive demand, long-term contracts of up to 20 years are signed. Companies like SolarCity also receive support from solar leases. A list of active solar contractors may be found here. In California, the state budgeted $2.2 billion for rebates to drive solar installations. 1,940MW will be installed through to 2016 (the program began in 2007).

Short-Term Negative Cash Flow

Investors interested in SolarCity should expect cash flow to be negative for the next 3 quarters.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,919.59 +80.85 0.48%
S&P 500 1,981.60 +9.86 0.50%
NASDAQ 4,527.5140 +19.2020 0.43%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs