Guides for Deployments to Almost Double for FY2014
Mumbai, India -- (SBWIRE) -- 10/16/2013 -- Lyndon and Peter Rive-founded SolarCity Corp. has turned out to be one of the most active and talked about stocks in the solar energy space recently. A major reason for this could be its deployment growth. The company recently announced that it had achieved 78 MWs worth of deployments in Q3 2013 versus 46 MWs and 53 MWs of deployments reported in Q1 and Q2 respectively for 2013.
The steady and significant jump in deployments during the last three and six months clearly indicates a trend towards their meeting or even exceeding the 278 MW in deployments guided for full year 2013. For 2014, they expect to deploy in the range of between 475 MW and 525 MW.
SolarCity has also seen phenomenal growth in its customer base. Total customer count has gone up from 50,532 at the end of Q4 2012 to 57,416 in Q1 2013, reaching 64,411 in Q2 2013. The latest cumulative customer count as of September 30, 2013 stands at 82,235. CEO Lyndon Rive had stated at their Q2 earnings call that he expects the momentum seen in Q2 contracts to continue through the rest of 2013.
In terms of operating lease revenues, the second quarter of 2013 saw them generating $20.6 million in revenues compared to $15.1 million in Q1 and $11.5 million in Q2 last year. For Q3, they have guided for operating lease revenues on the higher side at 21 million to 23 million.
SolarCity has also fared well on another key metric: cost reductions. All-in costs, which include everything ranging from direct installation costs, panel costs, sales and marketing, legal et cetera have been reduced by over 18% since the same period in 2012. Cost reductions in other areas of the business could help them in the long run as these savings could be passed on to potential customers. When asked at the Q2 call where he sees the majority of opportunities to lower costs coming from, Lyndon Rive pointed to areas such as process improvements, technology improvements in workflow automation as well as mounting hardware.
On the system mounting side, they should also see synergies coming through the recently announced Zep Solar deal, with the biggest being lower installation costs.
On an annual basis, they also expect to reduce costs by 5.5% with Peter Rive going on to state that they are currently executing ahead of that target.
On the acquisition front, SolarCity has been busy recently after announcing two major acquisitions in the last three months: Paramount Solar in September and Zep Solar in October. The Paramount deal, valued at $120 million, would help SolarCity maximise the potential of Paramount’s sales and marketing technology. Paramount Solar has been one of its most successful channel partners. The much larger Zep Solar deal, valued at approximately $158 million, would enable SolarCity to significantly increase installation capacity of PV module mounting systems. Zep Solar has been one of its primary component suppliers for residential systems so far in 2013. The deal is expected to close in December this year.
Meanwhile, on the ground, the increased affordability of photovoltaic (PV) systems have contributed to greater adoption of these systems by homeowners. The costs of PV systems have come down, largely attributed to reductions in the prices of PV modules.
SolarCity’s stock has been consistently moving upwards during the last three months, from the lowest point of $28.63 on September the 4th to a peak of $47.18 on October the 11th, no doubt boosted by news of the Zep Solar deal and deployment guidance. Another significant spike could be expected in the first week of November when Q3 2013 results are released.
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