I'm trying to understand why office park landlords don't seem to be moving quickly to solar. The typical one or two story buildings that are everywhere in CA, AZ, NC, etc...
They typically can capitalize expense/ investment over the 20-30 year time frame if they are in long haul, and if they are debt financed over 5-7 years (more typical) they should be able to "rent" the roof space to SCTY and SPWR for part of the generation income stream. I'm assuming that with flat roofs and high load/ quality electrical systems that are typical to these buildings that the install time should be less than residential, especially since we are talking about much, much larger areas.
I think it's easier when a business owns the building and operates a business out of it. For example, Walmart owns their buildings and runs a store out of it. So they're interested in reducing their electricity costs. Thus, it makes sense to go solar as long as they can get financing on it.
For typical office building owners, they're leasing out the building and don't really care about lowering electricity rates for the tenant. The tenant cares about lower electricity rates but isn't typically willing to sign a long-term solar lease (that's something the owner of the building should do).
Add to this that there's a huge overdemand of solar right now. The big bottleneck is the lack of financing available and the capacity of the installers.
Solarcity leads the field with residential and small business installs because they do two things right:
1. The provide lease financing. You don't need to find it yourself (ie., some other solar companies you need to arrange financing yourself via a 3rd party or partner). With Solarcity, they'll do the leasing directly.
2. The provide a turnkey service with everything done by them. Other companies will outsource various parts of the process (ie., install, maintain, lease, etc). But Solarcity integrates the whole process and takes responsibility of everything. Its their installers that install the panels. Its their people that maintain. You lease directly from them. It's the simplest and most convenient (compared with their competitors).
On a side note, in the last earnings conference call (Q1 2013), Lyndon Rive mentioned in an answer that they have enough demand from one state (presumably California) to meet all their growth targets for the next 10 years. He's claiming there is no demand problem. They're overflooded with demand. They need to scale to meet the demand (ie., installers, processes, etc) and most importantly they need to get financing lined up to provide leases. That's why the $500m deal with Goldman is so significant. Goldman signaled that they're going to spend billions over the next decade financing solar like this. It de-risks Solarcity even more.
I bought my shares in January and plan to hold for a very, very long time. I see SCTY as a $50-200 billion company in 15-25 years.
On a side note, when I first invested in January I only vaguely understood the long-term potential of Solarcity. But now I'm starting to see it more clearly. The big factor is that Solarcity will be scrambling to try to meet demand for the next 20 years because demand will likely always be greater than what they can fulfill (
SolarCity's CEO Discusses Q1 2013 Results - Earnings Call Transcript - Seeking Alpha). I see Solarcity's competitive advantage as being the most convenient solar provider because they offer a completely seamless and integrated experience (install, maintain, lease, etc). Over time they will use this integrated approach to drive down costs more (similar to Elon's other ventures of Tesla and SpaceX). This will keep them as the dominant residential and small business solar provider for many years to come.
For long-term investors, I say any big dips are buying opportunities.