Vivint Solar's IPO Debut

Screen Shot 2014-10-07 at 11.19.56 AM

SolarCity is the dominant player in the residential solar installation market with over 30% of the share, however, Vivint has become the fastest growing company in this area installing 15% of the country's PVs in the second quarter.

Vivint Solar is up from just 8% in the first quarter. Vivint Solar's revenue was $10 million for the first half of 2014.

Vivint Solar's IPO began trading Wednesday around 10 a.m. and was selling at $16.87 by mid morning.

Screen Shot 2014-10-07 at 11.25.52 AMSolarCity shares sell for $57.53, that is a drop from February when it was selling at an all time high of $88.35. Skeptical investors have treated the success of SolarCity shares as a fluke.

Fossil fuel companies have dominated the energy sector for as long as there has been an energy sector, and attempt to establish even a niche market for alternative energies have historically proven futile. Reinforcing this skepticism is the fact that neither company is profitable.

Vivint Solar had a net loss of $76.2 million for the first quarter of 2014 and SolarCity had a loss of $47.7 million for the same time period.

Both companies install residential photovoltaic panels at no cost to the homeowner, instead charging them directly for power generation with equipment leases built into the monthly price. The idea is to duplicate the equipment leasing services established by traditional utilities.

Selling the panels directly to consumers is more difficult because they will most likely be out dated in 10 years or less. With the lease model the burden of maintaining a competitive efficiency falls on the companies themselves.

Solar Energy Industries Association reported that in the second quarter of 2014 solar installations were up 21% over the previous year with residential installation increasing 45%. Vivint Solar has locations in seven states and DC, while SolarCity has locations in fifteen states and DC. The race is on.