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How SolarCity’s Operational Performance Stands up to Peers

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Apr. 28 2016, Updated 2:04 p.m. ET

Installed capacity

As we discussed earlier in this series, capturing market share is very important for downstream solar (TAN) companies. The higher the installed capacity is, the higher future cash flows will be. As of December 31, 2015, the cumulative installed capacity of SolarCity (SCTY) stood at 1,945 MW (megawatts) as compared to Sunrun’s (RUN) 596 MW and Vivint Solar’s (VSLR) 459 MW installed capacity.

 

On a YoY (year-over-year) basis, SolarCity witnessed the highest growth rate of 73% between fiscal 2014 and fiscal 2015. Sunrun had the second-highest growth rate at 56%, followed by Vivint Solar at 49%.

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SolarCity’s customer base

As of December 31, 2015, SolarCity had nearly 323,000 cumulative installations, as compared to Sunrun’s ~111,000 aggregate installations and Vivint Solar’s nearly 69,000 cumulative installations. The average capacity per installation of SolarCity stands at ~6,024 watts, as compared to Sunrun’s 5,370 watts and Vivint Solar’s 6,698 watts. We should note that the lower the average capacity per installation, the higher the administrative costs.

Costs

According to the latest company filings, SolarCity’s total installation cost per watt stands at $2.71, as compared to Sunrun’s $3.64 and Vivint Solar’s $3.12. SolarCity has one of the lowest installation costs in the distributed solar installation sector. Notably, the higher costs of Sunrun are mainly due to lower margins on installations made by channel partners, as compared to its direct, built-in business and lower average capacity per installation.

As of December 31, 2015, the accumulated deficit of SolarCity stood at $316.7 million, as compared to Sunrun’s $82.7 million and Vivint Solar’s $12.7 million. This deficit was accumulated as a result of the consistent loss from operations. When the accumulated deficit is compared on a per-watt basis, SolarCity has a higher deficit than Sunrun and Vivint Solar.

Keep reading for our analysis of SolarCity’s stock performance relative to peers like Vivint Solar, Sunrun, and SunPower (SPWR).

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