SolarCity Corporation SCTY, one of the largest U.S. solar power suppliers, launched GridLogic, a new microgrid service that will provide communities with an affordable, clean and locally generated solution to use energy.
Microgrids are aimed at increasing the efficiency of electricity distribution by providing access to clean energy during power shortage and frequent power failures. GridLogic’s design enables it to operate independent of the grid as well.
The latest offering will provide backup power to communities and hospitals in remote areas. It makes sure that during cases of outages or disruption of electricity, people will enjoy access to an alternate source of electricity. GridLogic will enable solar panels connected to the grid to charge batteries, which can be used even at night. With GridLogic, SolarCity brings a combined portfolio of rooftop solar, ground-mounted solar and battery storage under one common roof.
Additionally, like all the other products of SolarCity, GridLogic will come with financing options like long-term power purchase agreements, making it affordable for consumers. This will ensure little or no upfront costs for consumers.
SolarCity’s in-house experts will design, install and maintain the microgrids. They will install each GridLogic project with a software-based monitoring system for efficient distribution of power.
The latest initiative from SolarCity is aimed at providing uninterrupted power at affordable rates. It will also ensure public safety and security.
In a bid to take maximum advantage of the 30% solar tax credit before it drops to 10% in 2017, while retaining its edge in the market, as competitors like First Solar Inc. FSLR and SunPower Corp. SPWR expand their business aggressively, SolarCity resorted to innovative strategies for attracting customers. It has thus ventured into the microgrid space.
The company’s operating expenses shot up 134.6% in the fourth quarter year over year due to higher sales and marketing and research and development (“R&D”) expenses. Noticeably, the company’s aggressive expansion strategy and heavy investments in R&D have weighed on its bottom line. The company reported an adjusted loss of $1.33 per share in the fourth quarter of 2014, much wider than the year-ago loss of 46 cents.
While the latest initiatives have been commendable, we are yet to gain visibility on their outcomes, especially in terms of earning profits, going forward.
SolarCity has a Zacks Rank #3 (Hold). A better-ranked stock in the solar space is JA Solar Holdings Co., Ltd. JASO with a Zacks Rank #1 (Strong Buy).
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