On February 11th, I published an article on LinkedIn Pulse in response to SolarCity’s stock price taking a dramatic nosedive. I argued that even though SolarCity fell short of its own guidance on the number of residential solar installations, the company is best positioned to own the residential solar market nationwide, in the long-run.
I still believe that to be true, though one thing I didn’t mention in the article was that I’m skeptical that the leasing model that SolarCity champions will remain their dominant deployment model. Buying an array outright continues to become more compelling as component costs fall and low-cost financing models continue to propagate thanks, in part, to low interest rates.
While some pundits think SolarCity’s valuation is overblown in the face of that tectonic shift, I think it’s shortsighted to assume that SolarCity hasn’t noticed that trend and will pivot appropriately when they feel the time is right. As with any business, the question is always whether the company’s management team “gets it” and has the ability and willingness to change course when necessary. I suspect SolarCity’s executive team does.
If you believe the adoption of residential solar will continue its exponential rise–barring more legislative fiascos as we recently witnessed in New Mexico–then you have to ask yourself, Who other than SolarCity is best positioned to capitalize on it?