SolarCity has started to describe itself as two types of operations under one roof -- a development company and a power company. The development company sells and installs solar and energystorage The power company provides financing and harvests 30 years' worth of energy production and asset yield. (Similarly, SolarCity Chairman and Tesla CEO Elon Musk recently said that there are two Teslas, the car company and the energy company.)

According to SolarCity, "DevCo represents strong long-term growth, and PowerCo represents high-quality, long-term yield."

In Q2 2015, SolarCity (the development company) booked 395 megawatts and installed 189 megawatts, beating guidance. (In Q1 2015, SolarCity booked 237 megawatts and installed 153 megawatts.) SolarCity (the power company) has produced over 1.25 terawatt-hours of energy over the last 12 months and recently hit the 6.5-gigawatt-hour-day mark.

Metrics and milestones

PowerCo

  • Available cash: $114 million, of which a record $41 million was generated in Q2. According to its investor letter, SolarCity believes that "available cash" is a clearer representation of "true business performance and represents the net levered cash flow to equity of PowerCo." The letter continues, "PowerCo serves as our proxy for the steady-state operations and cash flow of our business assuming no further growth or development of new contracts and installations. We view this as one of our key metrics of performance and value creation, and we will be reporting this metric on a quarterly basis going forward."
  • Energy production: 1.25 terawatt-hour
  • Cumulative megawatts installed: 1,418 megawatts at the end of Q2 2015 -- up 86 percent year-over-year
  • Cumulative customers: In Q2 2015, added 44,900 customers for a cumulative total of 262,495 at the end of Q2 2015 -- up 86 percent year-over-year
  • Estimated nominal contracted payments remaining: $7.7 billion at the end of Q2 2015 -- up 132 percent year-over-year

DevCo

  • Cost: $2.91 per watt, down 3 percent "despite flattish panel prices"  
  • Installed a record 189 megawatts
  • Residential installations totaled 168 megawatts 
  • California grew 97 percent year-over-year  

Guidance

SolarCity expects to install a record 260 megawatts of solar energy systems in the third quarter and 920 to 1,000 megawatts for the full 2015 fiscal year. Rive said he is confident that SolarCity growth in 2016 will be in line with industry growth.

Policy review and outlook

SolarCity lauded the California PUC’s decision on utility residential rate reform for "normalizing energy pricing across ratepayers and denying utilities’ request for a significant fixed charge in favor of a higher minimum bill."

SolarCity referred to a "victory in Arizona by defeating an attempt to tax leased distributed generation systems like utility-scale systems."

SolarCity's policy priorities are to 1) establish continuity for net metering in Nevada and 2) prevent HECO’s attempts to discontinue net metering in Hawaii. 

Takeaways from the call and news from SCTY

  • Seeing lower costs on inverters and modules in coming quarters
  • SolarCity will offer a private placement of $123.5 million aggregate principal amount of asset-backed securities, series 2015-1
  • R&D spending increased sharply due to activities at its solar panel manufacturing initiative, Silevo

A few tidbits from last quarter's call

  • COO Tanguy Serra said that to achieve the goal of 1 million customers by 2018, the company must grow 60 percent per year
  • SolarCity hired 1,300 employees in Q1 2015
  • Serra noted that a recent 157-kilowatt commercial rooftop install took 3 days due to the use of the Zep mounting hardware, claiming other installers would take weeks to perform the same job.

And a bit on energy storage

Jeff St. John has reported on the ways SolarCity or Tesla might make money with new energy storage products. But despite the chatter about rate cases, time-of-day usage, and 50-50 revenue splits, the SolarCity folks are still waiting for the right rate case and for market structures to resolve. For now, the application is backup power.