Tuesday, July 1, 2014

SolarCity: Will Going Vertical Add Value?


Summary

  • Buying Silevo makes SolarCity into a vertical integrator in the solar space.
  • Higher efficiency modules promised aren't as industry leading as promised.
  • The stock valuations of vertical integrators in the solar industry leave a lot to be desired.
With the announcement a couple of weeks ago that SolarCity (SCTY) was buying a manufacturer of solar modules, the market sent the stock soaring for questionable reasons. The biggest issue with any vertical integration is that the company is now somewhat trapped into a technology instead of pursuing the most economical solution available on the market. Secondarily, the solar module market has never lacked from investments, nor is the manufacturers historically overly profitable.

Read the full article at Seeking Alpha.


Disclosure: No position mentioned. Please review the disclaimer page for more details. 




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