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Risks Facing Today's Solar System Players

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SunPower (NASDAQ: SPWR  ) , SolarCity (NASDAQ: SCTY  ) , and First Solar (NASDAQ: FSLR  ) have all seen stock prices soar in 2013 and there appears to be no ceiling to the potential in the solar industry. But there are risks for solar companies, as we've seen play out in just the last few years. 

First Solar was once the cost and technology leader, only to see that lead evaporate to Chinese competitors. SunPower now holds the technology lead but a new wave of more efficient product may be on its way. 

SolarCity doesn't make panels, but it has a lot of risk in its current business model. If consumers begin buying systems instead of leasing them its entire infrastructure could be upended. Joel South sat down with solar analyst Travis Hoium to see what risks face these leading solar companies in the future. 

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Read/Post Comments (2) | Recommend This Article (0)

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  • Report this Comment On October 22, 2013, at 7:06 PM, tdotsports1 wrote:

    Not sure about anyone else but I much prefer written articles than a video. Does anyone ever watch these things?

    Even a transcript beats having to actually watch it.

  • Report this Comment On October 23, 2013, at 2:20 AM, jtinsj98 wrote:

    It is about time someone calls Travis out on his views. I see in almost every article he writes a definite bias toward Sunpower. Of course, he owns Sunpower stock so that is somewhat expected. What I don't like is the constant criticism of SolarCity without having knowledge of the facts.

    In this article he states: "If consumers begin buying systems instead of leasing them its entire infrastructure could be upended." Does he think that SCTY only leases systems? In fact, approximately 25-30% of SCTY's residential sales are cash purchases. By the way, this number can increase on a moment's notice as has happened before. All it takes is a little "push purchases" sales incentive to the massive sales team and voila! Just because the third-party ownership (lease or PPA) model has been successful (why, because the vast majority of consumers like it) does not mean that SCTY is not also successful at selling PV systems. In fact, purchase are actually preferred for cash flow purposes.

    Travis, rather than continuing to pit SPWR and SCTY against each other and seemingly rooting for one to fail (i.e. SCTY) much the way Red Sox-Yankees or Dodgers-Giants fans do, why don't you just embrace both as major players in the burgeoning solar industry because both are important to building this industry. By the way, I own shares of both, and I think you should too. At least, owning SCTY would be advantageous for your fund clients.

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Related Tickers

9/29/2016 4:00 PM
FSLR $39.08 Down +0.00 +0.00%
First Solar CAPS Rating: ***
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SPWR $9.03 Down -0.06 -0.66%
SunPower CAPS Rating: ****