Grant’s: SolarCity Corp. – Stay Away From ‘Predatory Borrower’

Last week's issue of Grant's Interest Rate Observer took aim at Elon Musk's SolarCity Corp., America’s largest solar power provider.

At first glance, without digging into the company's accounts, SolarCity is one of the market's most exciting growth stories. During the second quarter, the company installed 189 megawatts worth of solar panels, up 86% year-on-year. For the same period, the company conceived "net retained value," a metric for the net present value of future cash flows deriving from leased solar panels showed a $1.3 billion or 72% increase.

SolarCity: Eternally loss making

It isn't clear if SolarCity will ever be profitable. Second quarter EBITDA was negative $94.4 million. As Grant's points out, EBITDA is the most commonly abused financial metric. Nearly every...