SolarCity Corp (NASDAQ:SCTY) has had a very interesting start to June. It has launched a new solar loan program. It is facing a new lawsuit. It has received a Deutsche Bank financial rating. The firm, which has been struggling this year, could have an interesting second-half of 2016.
SolarCity Corp Launches New Solar Loan Program
SolarCity wants to shake things up. The solar firm announced the launch of a new solar loan program. In 14 new states, clients can pay less for solar and pay far less than their former energy bills. The program will replace its previous MyPower product, which wasn’t as successful as first intended.
Beginning this month, consumers can take advantage of a 10-year solar loan with an APR as low as 2.99 percent. Or, they can apply for a 20-year loan with an APR as low as 4.99 percent. Users can prepay the balance or prepay a portion of their loan without fees or penalties.
As part of the program, consumers can get its service package, which comes with a 20-year warranty and regular monitoring. The company will mount and install the system, and add a Nest Thermostat without extra costs.
The new solar loans will be available in Arizona, California, Colorado, Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Mexico, New Jersey, New York, Oregon, Rhode Island, Texas and Washington, D.C. New states will be added soon.
“We can now offer a loan that makes it possible for many customers to pay less for solar from day one, and still receive thousands back in tax credits on top of that,” said SolarCity CEO Lyndon Rive. “This program will allow thousands of additional customers across the U.S. to install solar this year and start saving money immediately, and we expect to work with multiple lenders that will allow us to expand to several new states by the end of the month with the same great terms for our customers.”
What does Credit Suisse think of the move? It states that a third-party loan model maintains higher upfront cash generation, which reduces problems that stem from a leasing model.
In February, SolarCity ended MyPower. It only accounted for 15 percent of new installations. Customers weren’t interested because they didn’t qualify for the 30 percent investment tax credit with MyPower.
This comes as SolarCity is losing market share in the solar market. Many smaller firms are gaining ground as homeowners start to use solar loans offered by small businesses and even banks. SolarCity is simply playing catchup.
SolarCity Corp Telemarketing Lawsuit, Rating
SolarCity is going to court…for telemarketing.
A resident in Massachusetts has filed a class action lawsuit against the solar firm. It’s alleged that SolarCity initiated “unsolicited and unwanted” telemarketing calls. Filed in a federal court in Boston on Wednesday, the complainant says the solar firm violated Telephone Consumer Protection laws.
The lawsuit states that SolarCity made repeated calls to numbers that were on the National Do Not Call Registry without their consent. The phone calls were an attempt to generate leads for its solar installation services.
Ostensibly, the lawsuit aims “to stop (SolarCity’s) practice of making unsolicited telemarketing calls to the telephones of consumers nationwide and to obtain redress for all persons injured by its conduct.”
Meanwhile, SolarCity has received a new rating from Deutsche Bank. Last week, the brokerage firm said in a research note that the solar firm is a “Buy.” It also provided a price-target of $32 a share.
Year-to-date, SolarCity shares are down 53 percent. During Monday’s trading session, the firm’s shares were trading 8.3 percent higher at $23.45.