SolarCity Corp. SCTY and Whole Foods Market Inc. WFM have teamed up to install rooftop solar-power systems on many Whole Foods Market stores. SolarCity’s shares rose 3.68% to $25.08 yesterday.
Separately, the leading natural and organic food retailer entered into a deal with integrated competitive power company NRG Energy, Inc. NRG for installing rooftop solar at 84 of its stores and distribution centers across nine states to generate renewable energy onsite. Financial terms of the deal were also not provided.
Whole Foods’ plan is to boost the production of solar power and offset the need for traditional grid power while helping its stores to save money. In total, SolarCity will retrofit up to 100 Whole Foods stores out of a total count of over 435 with rooftop solar panels.
SolarCity will also provide solar power services for various Whole Foods Market stores in locations such as Connecticut, New Jersey and New York. It will also custom design each solar power system to boost the amount of grid power offset. Installations are expected to begin this spring.
Although the financial terms of the deal were not disclosed, Whole Foods Market will get a discount on solar power bought from SolarCity, “locking in low solar energy rates for years into the future."
Recently, SolarCity reported better-than-expected fourth quarter results on the back of strong residential installations. However, the company continues to underperform in commercial installations as big projects often fail to meet construction deadlines.
For the first quarter of 2016, the company expects installations to grow 18% year over but decease 34% sequentially to 180 MW. The sequential decline is mainly due to higher-than-usual seasonal slowdown as well as the impact of its exit from Nevada operations in Dec 2015.
SolarCity currently carries a Zacks Rank #3 (Hold). JA Solar Holdings Co., Ltd. JASO is a better-ranked stock, carrying a Zacks Rank #2 (Buy).
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