SolarCity (SCTY) Stock: Gaining Big On Announcement

SolarCity Corp (NASDAQ: SCTY)

SolarCity is having a bit of a strong start to today’s trading session, and for good reason. The company announced a new solar loan program that will give more consumers access to its products than ever before. Today, we’ll talk about the details of the program, how the market reacted to the news, and what we can expect to see from SCTY moving forward. So, let’s get right to it…

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SCTY Gains On New Solar Program

As mentioned above, SolarCity is having a strong start to today’s trading session after the company unveiled a new solar loan program. The new program will give customers in 14 states access to immediately pay less for solar than they previously paid for utility bills each month. Because of the massive stronghold that SCTY has on the residential solar industry, it has been able to negotiate what is considers to be extremely favorable terms on behalf of its customers. In a statement, Lyndon Rive, SCTY CEO, had the following to offer:

We can now offer a loan that makes it possible for many customers to pay less for solar from day one, and still receive thousands back in tax credits on top of that… This program will allow thousands of additional customers across the U.S. To install solar this year and start saving money immediately, and we expect to work with multiple lenders that will allow us to expand to several new states by the end of the month with the same great terms for our customers.”

How The Market Reacted To The News

As investors, one of the first things that we learn when we get started in the market is that moves are often caused by the news. When positive news is released with regard to a publicly-traded company, we can expect to see gains in the value of the stock associated with that news. Adversely, when negative news is released, we can expect to see declines. In this particular case, the news that was released was overwhelmingly positive. After all, the new offering will likely drive thousands of new customers for SolarCity. So naturally, we’re seeing gains in the value of the stock today. Currently (10:30), SCTY is trading at $21.51 per share after a gain of $0.10 per share or, 0.47%. thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from SCTY. While the stock may be feeling the pain as investors remain wary about the solar industry as a whole following the issues that Sunedison faced, I don’t believe that this will last forever. Also, I do like the structure of the loans that the company is now offering. Instead of taking on the debt load on their own, they are passing the risk down directly to the bank, and that will help to keep the debt load on SolarCity down.

On top of the new loans, I have to say that I’m incredibly impressed with the SCTY business model as a whole. While many solar companies are focusing heavily on building solar power plants, SolarCity is focused on putting the control of the power in the hands of consumers. As we continue to see a shift away from the burning of fossil fuels and toward clean energy, this will likely lead to heavy demand for SCTY products.

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What Do You Think?

Where do you think SCTY is headed? Join the discussion at CNA Finance SocialVEST.

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1 thought on “SolarCity (SCTY) Stock: Gaining Big On Announcement”

  1. $0 down solar loans have been available from multiple sources for several years now. The question is pricing not financing. The solar leasing companies are still charging $4.50 to well over $5.00 per Watt for the systems that they sell while smaller competitors that offer $0 down financing are now charging less than $2.70 per Watt for an installed system. What do you think consumers will choose in the marketplace? $4.50 a Watt or $2.70 per Watt?


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