SolarCity Corp (SCTY), Real Goods Solar, Inc. (RSOL): Solar Financing Gets Crowded

JPMorgan is also leading a $630 million injection of financing into solar projects sold by privately-held SunRun, another SolarCity rival. SunRun works through local partners who do the heavy lifting, and selling, of small projects, whereas SolarCity goes direct.

But if the big banks are marching into the space and looking for partners, SolarCity’s effort to control the whole process is going to come under pressure. A lot of companies are going to be calling on customers in the next year, and deals may become harder to come by.

Does SolarCity have a way out?

SolarCity is in dire threat of being commoditized, and becoming just one operator among many, unless it can find a way to differentiate itself.

So before giving up on it, consider this. SolarCity is looking to add batteries to its mix of products it can finance.  By adding storage to their systems, SolarCity customers reduce their dependence on local utilities, many of whom are trying to get out of buying power from these customers, and even charge them for their back-up grid connections, claiming they are “freeloading” on utility lines. This becomes increasingly important as more homes get solar power and as the cost of panels falls below that of other types of energy, known as “grid parity.”

If and when SolarCity can make financing of storage happen, it will become attractive as an investment again. So take your profits now, let the stock fall down, and then keep an eye out for this next evolution in the solar power game and be ready to get back in for some serious coin.

The article Solar Financing Gets Crowded originally appeared on Fool.com and is written by Dana Blankenhorn.

Dana Blankenhorn has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Dana is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.