Greenberg: The Tesla-izing of SolarCity?
"It doesn't scare me at all. They're late to the game. We've been sourcing American-made panels for a year. I think they're being beat by sourcing products overseas. They have an antiquated financing model and manufacturing in upstate New York makes no sense." Petersen adds that he believes the future of solar installation will be the "ability to get people to own solar panels," not lease them, as SolarCity does. "And I'll go on the record now to say they are not going to manufacture a gig of solar," he says. "This is a subsidy hunt. If they can finance this on their own, I'll eat my hat." Reality: If we have learned nothing else, it's not to be against Elon Musk's visions, dreams and ability to execute. But his giga-solar factories are, for now, merely vapor. (Doesn't mean they always will be, but they are now.) And between here and there, SolarCity still has an existing business to run. And this deal will only make what already is a complex company, even more complex. As a manufacturer, even if it gets subsidies and partners, SolarCity will become a company that needs and consumes considerably more cash. And, oh by the way, its metrics and guidance still matter. Once stock-popping effects of today's news fades, it's back to business as usual. Which is why, as crazy as it seems, SolarCity remains red-flagged on the Reality Check Watch List. The risks associated with its existing business (such as making money the old fashioned way -- without the help of government subsidies) simply haven't changed.
-- Written by Herb Greenberg in San Diego