It is obvious that the stock of US residential solar companies has been on the decline, with shares falling steadily over the past few years. Last week, SolarCity plumetted nearly 66% from their 52-week peak of US$ 58.87. SunPower, which has seen stocks tumbling continuously, is depressed nearly 75% from its 52-week high.
But when where the price of global PV components is at an all-time low and solar installations are burgeoning, the incongruity is strange. What is happening?
As mentioned by two finance executives who spoke with PV Tech, the problem hinges on the fact that residential solar firms are simply operating under "the wrong business model".
" If you look at the capital markets and all the corporations that are publicly-traded, they are not performing so well. I wouldn’t put each one of them in the same bracket but generally the industry is getting knocked down at a time where we see solar installs thriving, it is a very strange time in the history of the solar business," said Camilo Patrignani, CEO of Greenwood Energy.
" I think the underlying cause for it is that the residential solar companies are functioning under the wrong business model," he stated.
State Street Bank executive Santosh Raikar reiterated the same view to PV Tech: "Residential solar is still looking for a business model," he said. "For what it is worth, the reason why SolarCity experienced this acquisition and Vivint Solar and a number of other companies that are not doing as well as they should in a stable market environment, is because we don’t really know what business model works for residential solar at this point."
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