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SolarCity Makes Nikola Tesla Roll Over In His Grave

SolarCity (SCTY), Vivint Solar (VSLR) and other players in the solar leasing/PPA space have a problematic business paradigm that sets them up for never ending problems in the long term, because it sells the solution based on a false premise. Energy retrofits are about a make or buy decision, in effect moving energy from liabilities to assets in the balance sheet of a property, in other words, this decision is material to the long term value of the asset. The decision is a capital decision. The solar PPA and solar leasing models deprive property owners of that opportunity, and sell solar PV based on "lower payments," which may or may not always pay off, and which replaces one liability with another, in many cases even threatening asset values, as I have discussed here.

Note that there are broadly two cases to consider:

  1. One is in the Sunshine states, when