SolarCity

Power Forever

Saturday 4 June 2016, by Nurmalissa Jazayeri

3 inspired

A. The main facts about the activities of the company.

Founded in 2006 by brothers Peter and Lyndon Rive, SolarCity is a California-based provider of energy services, more particularly providing services in design, financing, and installation of solar powered systems. The company currently only operates within the United States, with 27 states penetrated thus far. SolarCity provides residential solar leasing, which allows homeowners to adopt solar powered electricity at a lower cost than for fossil fuel-generated energy. As part of its efforts to make solar energy available to individual households, SolarCity offers home efficiency evaluations and audits and upgrading solutions. Making solar energy available to all by decreasing its switching costs is one of SolarCity’s principal missions. In addition, SolarCity expanded into commercial solar activity making available many solar projects, primarily photovoltaic panel installations for larger organizations. Some of its commercial clients are eBay, Walmart, and Intel, among others. SolarCity also caters its services to governmental and academic institutions. Over 400 schools and universities have adopted SolarCity’s products and services, including prestigious universities such as Yale, Stanford, and Georgetown. SolarCity also works with the U.S. Armed Forces and Department of Homeland Security to provide clean energy. The company has also entered the electric car charging market by acquiring Clean Fuels Connections’ SolSource Energy business. In addition to these primary activities, SolarCity is launching currently itself into the energy storage business, through the installation of battery factories.

SolarCity has since its beginnings partnered with banks and large corporations to create financing funds for its various projects. Some of its partners have included Bank of America, Citi, Morgan Stanley, Merrill Lynch. Its biggest partner has been Google, who in 2011 created a $280 million fund with the mission of financing residential solar installations. This Google Fund was the largest fund of this kind within the United States and is Google’s largest investment in clean energy.

B. The Ethical challenges this company is addressing.

The main ethical challenge that SolarCity are trying to address is the overconsumption of energy which causes detrimental effects to the planet. SolarCity is trying to create a cleaner and more environmentally friendly world by providing full-service solar energy, and they are doing so by being America’s number one solar provider.

Their aim is to provide clean energy to homeowners, businesses, schools, non-profit and government organisations, and to eventually provide solar energy all around the United States and then potentially expand into other countries until everyone is using clean energy. This may seem unlikely, however, SolarCity offers cleaner energy for a lower cost than if we were to continue using energy generated by burning fossil fuels, coal, oil and natural gas; all of which contribute to damaging our environment. Therefore, by offering a cleaner alternative energy for a cheaper price, they are successfully trying to challenge the unethical practice of using fossil fuels and other harmful gases, whilst also trying to make renewable energy the norm.

In addition to this, one of the most inspiring campaigns that SolarCity is running is the GivePower Foundation. 1.4 billion people have no access to electricity, SolarCity is trying to change that; therefore for every megawatt of solar power that SolarCity installs in 2016, the GivePower Foundation will donate a solar power system and battery to a school without electricity. By doing this, not only are SolarCity providing electricity to areas which would otherwise be left in the dark, they are also doing this in a clean and natural way which does not destroy the environment.

C. What makes you believe this company is really ethical and why you trust it?

SolarCity’s team are comprised of innovators and experts who work towards one mission - to reshape the energy landscape by making solar power accessible and affordable for everyone. They want to make it easy for customers to switch to cleaner energy.

In fact, as mentioned in the previous question, we find that the company strives to be America’s #1 full-service solar provider by being the only company that offers financing, design, installation, monitoring and efficiency services from a single source, without requiring the services of multiple third-parties. This has resulted in the company being popular with potential customers and clients; they are able to give customers control of their energy costs to protect them from rising rates. The benefits of SolarCity’s activities will result in 178 tons of CO2 being offset over 30 years, furthermore, installing solar panels helps combat greenhouse gas emissions and reduces collective dependence on fossil fuel.

What we found interesting about SolarCity is their GivePower Foundation and their mission is to make clean renewable energy accessible to those who need it most and reduce the world’s dependence on finite, polluting power sources. They achieve this by teaming up with buildOn, another non-profit organisation dedicated to building schools in some of the economically poorest countries in the world such as Nicaragua, Haiti, Nepal and Malawi. Through their partnership, they have trained buildOn employees and worked closely with local communities to install and maintain their solar panel systems. We believe that all of these ethical activities, traits and values of SolarCity will attract potential employees and customers that feel identified with the company.

D.The possible challenges facing the company in the future and how you think this company may improve.

Since SolarCity is a young company, it is clear that it will encounter many opportunities and that it will face many challenges in its near future. Thus, we identified some of them and tried to get an idea of what the future of SolarCity might look like. We first look at what are some of the opportunities that might help SolarCity to improve and then look at some of the challenges the company will be facing in the next years.

Currently, SolarCity operates in 27 states and exclusively in the US. Therefore, in order to improve and grow as a company, we believe that SolarCity could expand geographically its main operations and services. We think that they could first expand their operations across all the United States of America and then try to enter sunny foreign countries such as Mexico. By doing so, the company would not only increase its revenues but it would also spread and enhance its positive impact on the environment. In addition to geographic expansion, we think that SolarCity should go beyond its “cash cow” solar panels activities and enter new markets that touch with solar power. Their recent joint decision with Panasonic to open a battery factory by 2017 aimed at producing a battery storage device that stores solar power is a good example in that respect. Therefore, while opportunities for improvement are certainly there, the key will lie in SolarCity’s ability to grasp and leverage them.

If many opportunities will present themselves to SolarCity in the future, the company will certainly face different challenges and threats along the road. One of the biggest consists of big energy corporations and their lobbyists, who might exercise their influence over regulators in order to reduce the scope of activities of companies such as SolarCity and retain control over the market. This has already happened in the state of Nevada, where NV Energy, the state’s largest utility, has substantially lobbied the Nevada’s Public Utilities Commission (PUC). As a result of this pressure, the Nevada’s Public Utilities Commission has taken a series of actions: it has limited the amount of solar energy homeowners and small businesses were allowed to generate; it has raised the monthly service charge, which is similar to a tax, for rooftop solar customers; and it has reduced the return on the solar energy surplus sold back by customers. As a consequence, SolarCity was forced to exit the market and eliminate hundreds of jobs. Thus, this case illustrates well the significance of the threat. Overall, we believe that the biggest challenge of SolarCity will be to leverage these opportunities and deal with these challenges in order to render the company profitable in the next years. Indeed, while the losses of the recent years can be explained by the youthfulness of the company, there is no doubt that shareholders will be attentive the performance of the company in the coming years. Therefore, we truly hope that SolarCity will be able to address its future properly, as it would render their positive impact on the environment and on society long-standing.

Bibliography

http://www.solarcity.com/

Location: San Mateo (United States)

Sector: Other service activities

Official website: http://www.solarcity.com/

Key figures:

Number of employees: more than 13,000
Operation centres: 90 in the US

Nbr. visits: 257

Nbr. inspires: 3