SolarCity Corp. SCTY has released a statement that it will stop operating in Nevada if the state Public Utilities Commission's (“PUC”) proposed decision on rooftop solar is passed.
The draft proposes changes such as separate ratepayer classes for all small commercial and residential net metering customers to ascertain no cost shift between ratepayers; compensation of surplus energy produced through net metering systems at wholesale rates; a higher fixed charge and a subsequent decrease in the volumetric commodity charge in order to reduce disparity amongst net metering customers; an time-of-use pricing option to let net metering customers benefit from energy generation during peak and off-peak demand periods; and incremental implementation of new rates over four years.
According to SolarCity, acceptance of the proposal would lead to the destruction of the rooftop solar industry in a state that enjoys high solar exposure. The company stated that in such a scenario, it would have no other option but to discontinue sales and installation operations in Nevada – a move which can lead to the loss of 5,000 jobs in the solar industry.
In the release, the company urged PUC to reconsider its decision and reject the proposal as it believes that the draft order stands to benefit only NV Energy, which will thereafter continue to dominate the market.
SolarCity, the largest U.S. rooftop solar installer, posted a wider-than-expected loss in the third quarter of 2015. Reported loss was also wider than the year-ago figure. This can be attributed to the company’s rising expenses. In marked contrast to the appalling loss, SolarCity’s total revenue beat the Zacks Consensus Estimate by 6.4%. On a year-over-year basis, reported revenues soared 95.1% on the back of increased operating leases and solar energy systems incentives as well as higher solar energy systems and components sales.
Zacks Rank
SolarCity currently has a Zacks Rank #3 (Hold). JA Solar Holdings Co., Ltd. JASO, ReneSola Ltd SOL and First Solar, Inc. FSLR are some better-ranked stocks in the solar industry. While JA Solar and ReneSola sport a Zacks Rank #1 (Strong Buy), First Solar carries a Zacks Rank #2 (Buy).
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