Thin-film solar darling First Solar (s FSLR) and solar installer SolarCity have announced a deal today that will bring First Solar’s thin film solar product to U.S. residential customers for the first time. In a 5-year deal, First Solar will provide 100-megawatts of solar modules to SolarCity, with deliveries scheduled to start in the first quarter of 2009, and will also make a $25 million equity investment in the Foster City-based solar installer. The investment is part of a $30 million fourth round of funding that SolarCity has raised, bringing the solar installer’s total funding to $56 million.
The move comes the same day First Solar is set to announce its third quarter earnings. The company’s stock dipped below $100 yesterday ahead of the report but has since rebounded. UBS analyst Stephen Chin warned that the residential solar market will be hit hard by the global credit crisis. This will certainly affect installers like SolarCity, but First Solar’s stock has risen in early trading. At the time of writing, it was up more than 5 percent since the market opened.
With the real estate and credit markets in flux, this could be a risky time to get into residential solar. Akeena Solar EVP of Sales and Marketing Steve Daniel said of the residential market at the Intersolar conference back in July: “The equity is gone . . . The game has changed radically in the last 12 months.”
But at the same time the trend of solar manufacturers moving into installation has become increasingly common over the past few years, as manufacturers look to diversify in the face of tough margins in the solar production industry. First Solar previously acquired Ted Turner’s solar installation company Turner Renewable Energy for $34.3 million last December. Suntech bought commercial solar integrator startup EI Solutions in October and SunPower bought PowerLight.
SolarCity plans to use the funding to expand its business beyond California, Arizona and Oregon. Earlier this year, the startup launched its SolarLease program, which offers the option for homeowners to go solar with little to nothing down. SolarCity also recently announced a new roof mounting system, called the Canopy Mounting System, which the company says lowers an installation’s profile.
The company has also revamped its online toolkit with SolarGuard 2.0, an update to the company’s web-based monitoring system that allows customers to track the progress and performance of their systems. These innovations could help set SolarCity apart from other installers, but in this market consumers will likely be more worried about the price than the perks.