SolarCity Corporation Thinks These Are 3 of Its Biggest Risks

1. The Status Quo

1. The Status QuoSolarCity Corporation’s rooftop systems threaten the utility

sector’s status quo, and not everyone is happy.

Some utilities have embraced decentralized renewable energy solutions: NextEra Energy’s (NYSE:NEE) and SolarCity

Corporation are teaming up to triple Hawaii’s solar power.

1. The Status Quo

But other utilities see SolarCity as a threat, and are pushing regulators to increase oversight and grid

responsibility for rooftop solar owners.

If solar users have to pay production fees or can be charged more for their utility-bought electricity, that

could tip more scales back in favor of utility-generated electricity.

2. Disappearing Subsidies

2. Disappearing Subsidies

Solar use is soaring, but the industry still relies on production tax credits to make many of its modules

cost-competitive.

SolarCity Corporation and its customers have historically enjoyed a 30% investment tax credit, but

that could soon disappear.

2. Disappearing Subsidies

The tax credit is set to disappear for residential homeowner-owned systems in 2017, while third

party-owned systems like SolarCity’s get to hang on to a 10% credit.

3. China Solar Trade

3. China Solar Trade

SolarCity Corporation relies on China for “a significant portion” of its solar panel components.

U.S.-China solar trade soured in 2012 when the U.S. imposed import taxes ranging from 35% to 255% on

solar cells.

3. China Solar Trade

Those tax rates have declined since 2012, but the U.S. continues to investigate different aspects of U.S.-China

solar trade.

In September 2014, SolarCity Corporation bought manufacturing company Silevo Inc. to bring Chinese

manufacturing into its own business, but it will continue to rely on other suppliers for the near future.

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