SolarCity Corp (SCTY), SunPower Corporation (SPWR): Utilities Must Adapt to the Intrusion of Solar

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NRG Energy Inc (NYSE:NRG) and Edison International (NYSE:EIX) are starting to make this transition. NRG Energy Inc (NYSE:NRG) has built a solar leasing subsidiary called Residential Solar Solutions  and Edison International (NYSE:EIX) subsidiary Southern California Edison was one of the first utilities to embrace solar with a 250 MW plan for commercial solar in 2008. More recently, Edison International (NYSE:EIX) has invested in a fund organized by Clean Power Finance, another ownership option for utilities.

The exact model utilities take state by state may change and it may even evolve over time but the ones who find a way to make solar a part of the future will prosper. Those who allow third party installers like SolarCity Corp (NASDAQ:SCTY) and SunPower Corporation (NASDAQ:SPWR) own the power generating assets give up power in the electricity market and will eventually pay the price.

Solar is coming
Like it or not, solar power is coming and with installations up 76% last year and residential solar growing rapidly companies have to evolve. The transition utility companies make will be very important and it will be key to see who is able to make solar an asset and who looks at it as a liability.

The article Utilities Must Adapt to the Intrusion of Solar originally appeared on Fool.com and is written by Travis Hoium.

Fool contributor Travis Hoium manages an account that owns shares of SunPower and personally owns shares as well and has the following options: Long Jan 2015 $7 Calls on SunPower, Long Jan 2015 $5 Calls on SunPower, Long Jan 2015 $15 Calls on SunPower, and Long Jan 2015 $25 Calls on SunPower. The Motley Fool has no position in any of the stocks mentioned.

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