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Clear Skies for SolarCity in 2016? An Inside-Out Company Breakdown

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Part 10
Clear Skies for SolarCity in 2016? An Inside-Out Company Breakdown PART 10 OF 20

How Diversified Is SolarCity’s Customer Base?

Broad classification

SolarCity’s (SCTY) customer base can be broadly divided into following key sectors:

  • residential
  • commercial
  • government

According to company filings, the company generally groups commercial and governmental customers together for customer management purposes.

How Diversified Is SolarCity&#8217;s Customer Base?

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SolarCity’s residential customer base

The majority of SolarCity’s customers are individual homeowners. SolarCity’s revenue is thus primarily driven by residential installations. According to company filings, SolarCity’s residential customers also include homeowners within communities developed by home builders who have partnered with the company. Residential installations in 4Q15 came in at 221 MW (megawatts), as compared to 203 MW in 3Q15.

In the residential space, SolarCity competes with Sunrun (RUN), Vivint Solar (VSLR), NRG Home Solar, Sungevity, and Trina Solar for market share.

Commercial

SolarCity has a diversified commercial customer base that is spread across different business sectors. According to company filings, some of SolarCity’s largest commercial customers include Wal-Mart Stores (WMT), eBay (EBAY), HP (HPQ), and Intel (INTC), in addition to Mexican businesses such as Tiendas Soriana.

In the commercial installation space, SolarCity mainly competes with SunPower (SPWR), SunEdison (SUNE), Borrego Solar Systems, and G&S Solar Installers.

Government

SolarCity has installed solar (TAN) energy systems for various government organizations at the federal, state, and municipal level including the US Air Force, Army, Marines, and Navy.

As of December 31, 2015, the company had its presence in 27 states—as well as in the District of Columbia, Puerto Rico, Canada, and Mexico—with a cumulative customer base of 331,256. However, 70% of SolarCity’s customers in the United States are confined to the following five states:

  • California
  • Arizona
  • Massachusetts
  • Maryland
  • New York

We should note, however, that SolarCity intends to expand its presence both domestically and internationally in the future.

Now we’ll take a look at SolarCity’s revenues by segment and cost analysis.

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