Greenberg: SolarCity Flying Too Close to the Sun?

SAN DIEGO (TheStreet) -- When SolarCity (SCTY) reports earnings post-close today, keep an eye on the made-up metric the company (and some in the solar industry) uses and Wall Street focuses on: Retained value.

This, in effect, is a future stream of revenue, projected over 20 years, and discounted at (a discretionary) 6%. It was $1.052 billion last year, roughly double a year earlier. It's right up there, as a stock-driver, with installed megawatts, which this year is expected to double from a year ago.

As I wrote in Reality Check back in March, it's part of a company that -- after a good scrubbing of its financial statements -- appears to be too complicated for its own good.

And that's not just me saying it. The company says it, or a variation of the word "complex," six times in its 10-K -- one more time than it did a year ago. Management bluntly alludes to "the complexity of our business," which they say led to it already getting dinged for material financial statement weaknesses. They also warn that it may happen -- because of the complex nature of its business -- again.

Reality: SolarCity's stock has already lost a lot of its hot air -- showing that even Elon Musk, its chairman, can only take a stock so far. Also worth noting, from my perch in sunny San Diego: The solar industry here is hugely competitive. Just crack open the first section of the local Sunday paper and it's filled with solar ads from companies you've never heard of, including local HVAC suppliers.

Even power-generator NRG has gotten into the act. On NRG's (NRG) earnings call Tuesday, CEO David Crane said, "We have been hard at work growing our mass retail business organically, adding net customer accounts, staying top decile in customer satisfaction surveys, and expanding into new markets. And, importantly, becoming good at leasing and the other critical behind-the-scenes aspects of residential solar."

In other words, doing what SolarCity does. No wonder its stock has been among the biggest losers among mo-mo names over the past three months, falling 34%. As it turns out, unlike Tesla (TSLA), it's just another (albeit big) face in the crowd.

-- Written by Herb Greenberg in San Diego

Follow @herbgreenberg

Herb Greenberg, editor of Herb Greenberg's Reality Check, is a contributor to CNBC. He does not own shares, short or trade shares in an individual corporate security. He can be reached at herbonthestreet@thestreet.com.

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