SunPower Corporation (SPWR), SolarCity Corp (SCTY): The Largest Consumer of Oil and Energy is Switching to Solar

Financed by Bank of America Corp (NYSE:BAC), Project SolarStrong is SolarCity Corp (NASDAQ:SCTY)’s plan to provide solar power to 120,000 military housing units, a yield of about 300 megawatts of solar generation capacity. Despite not expecting to be net cash flow positive until the fourth quarter, shares have been on a tear this year, up 248% since their IPO in December 2012.

The stock is a little rich here with high expectations priced in to it, and I would look for a pull-back before entering; however, I think its long-term growth story is just beginning. Its disruptive model has gained and will continue to gain popularity with the military, homeowners, local and state governments, and the federal government — customer growth from 9,000 in 2011 to 31,000 in 2012, and revenue growth from $60,000 in 2011 to $129,000 in 2012 is just the beginning.

Siemens AG (ADR) (NYSE:SI)’ commitment to solar and its use in the U.S. military seems cloudy; however, the sequestration doesn’t seem to have affected Siemens AG (ADR) (NYSE:SI). They have won a number of government contracts for other services, and I believe that they will continue to win more as the the government’s search for more energy efficient solutions will continue to grow. (It won another one last week for $28 million.) Currently, it’s inexpensive trading at 16 time earnings, offering investors an opportunity to buy-in to a company with long-term value.

A foolishly bright conclusion

I believe that SunPower Corporation (NASDAQ:SPWR) and SolarCity Corp (NASDAQ:SCTY) offer compelling theses for investment. Although I have yet to bask in the sun and invest in any solar-oriented company, these two have interested me for a while. Current profits aside, I see long-term growth for both companies, and I’ll be watching for more ventures with the military (among other indicators) before I move them from my watch list to portfolio.

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

The article The Largest Consumer of Oil and Energy is Switching to Solar originally appeared on Fool.com is written by Scott Levine.

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