SolarCity Sees Increase in Interest Rate Having `Small Effect'

  • Customers may see increase of up to 1 cent a kilowatt-hour
  • Interest rates `entirely negligible of a risk' for SolarCity

SolarCity Corp., the biggest U.S. provider of rooftop solar power, expects a looming increase in interest rates to have a “very small effect” on consumers, Chief Executive Officer Lyndon Rive said in an interview Tuesday.

Rive, speaking at the climate talks in Paris, said customers would see an increase of a half a cent to 1 cent a kilowatt hour if the Federal Reserve bumped up interest rates by a quarter-percent.

In the third quarter, the blended rate for SolarCity installations was 13 cents a kilowatt-hour, according to Sven Eenmaa, an analyst at Stifel Nicolaus & Co Inc. in San Francisco.

“We’ve seen interest rates as being entirely negligible of a risk,” Angelica Jarvenpaa, a research associate at Raymond James Financial Inc. in Houston, said in an interview. “The decrease in PV panels would likely still be a bigger effect than interest-rate increases.”

SolarCity’s pricing is about 10 to 15 percent below utility costs. “Interest rates changes will not be changing this,” Jarvenpaa added in an interview.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE