SolarCity Corp. ( SCTY ) has reached an OEM supply agreement with a leading global provider of energy solutions, REC Group. The news elicited a positive market reaction with the stock price gaining 4.4% yesterday.
As part of the deal, SolarCity, the largest solar power provider in the U.S., will purchase a minimum of 100 megawatt (MW), which can rise to a maximum of 240 MW, of REC's Peak Energy solar panels over a 12-month period beginning fourth quarter 2014.
SolarCity has plans to install the panels, which are compatible with its Zep Solar mounting system, across its 15-state service territory. REC's solar panels are supported by its linear 25-year power output guarantee. Notable characteristics of these panels include enhanced power production capability per square foot, solid and durable design, simple installation, optimized performance in all sunlight conditions, with a typical energy payback time of less than one year.
REC Group is considered as one of the leading producers of wafers, cells and solar panels for solar applications. This SolarCity-REC tie-up is a step forward towards boosting North America's rooftop generation markets.
SolarCity is well supported in its endeavors by a booming U.S. solar market. The company sees installations climbing to as much as 900 MW to 1 GW by 2015. It also expects a million rooftop solar customers by 2018.
The company is also hitting upon new and improvised ways to reach out to potential customers. It has recently teamed up with Groupon Inc. ( GRPN ) to form one of the first online offers of its kind for solar systems. SolarCity's eye-catching deal with Groupon is a broad push for the industry into online customer acquisition. The company has already been building up its customer database through The Home Depot, Inc. ( HD ) stores since 2010 and select Best Buy Company, Inc. ( BBY ) stores from March this year.
SolarCity presently carries a Zacks Rank #4 (Sell).