SolarCity's (SCTY) Move into Community Solar Won't Immediately Move the Needle, But Its Important - Raymond James
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Raymond James affirms SolarCity Corp. (Nasdaq: SCTY) at Outperform with a price target of $75 as the company looks to push into community solar.
Analyst Pavel Molchanov commented, The “low hanging fruit” for residential PV adoption is, not surprisingly, single-family detached homes. As we detailed in April 2014, there are 70 million such homes in the U.S., with over 15 million in states where retail power prices are particularly conducive to residential PV (that is to say, $0.15/kWh and up). But obviously not everyone has the opportunity to “go solar” using traditional rooftop systems that SolarCity, Vivint Solar, Sunrun, SunPower, and many other players provide via leases, PPAs, or loans.
Earlier on Wednesday's trading session, SolarCity announced that it "and Minnetonka-based solar developer Sunrise Energy Ventures have partnered to create a new community solar program offering that allows renters, schools, municipalities and other current Xcel Energy customers to purchase renewable energy without installing solar panels on their properties. SolarCity's new community solar program will develop a series of up to one-hundred 1MW(AC) community solar installations, or "gardens," in Wright and Sherburne counties."
On the announcement, Molochanov said, To be crystal-clear, this is not going to be a particularly needle-moving project for SolarCity. For a company that’s guiding to 2015 deployments of nearly 1,000 MW, 100 MW (presumably over a multi-year period) is of limited significance. It is, however, a very substantial amount in the context of the fledgling community solar space. GTM Research’s recent data shows only 66 MW of community solar systems in operation domestically, so 100 MW would single-handedly more than double that.
For an analyst ratings summary and ratings history on SolarCity click here. For more ratings news on SolarCity click here.
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