That's not to say Musk shouldn't just buy NRG and avoid the competition drama but he won't.
NRG's market cap is around $11 billion.
From Greentech:
NRG sets its sights on selling solar to 3 million retail customers. Can the company sell other services alongside it?
NRG Energy has been developing its capabilities in residential solar for a few years now, but it has largely avoided sharing details about its business.
Yesterday’s third-quarter earnings call was one of NRG’s first efforts to “pull back the curtain” on the company’s strategy in this highly competitive space, said CEO David Crane. The thrust of it: NRG’s retail solar business is going to be about much more than just solar panels.
“Our home solar business is going to be about marrying up, cross-selling and seamless integration of solar-driven home energy solutions, including complementary grid system sales, backup generation and other energy products and services,” said Crane. “In this regard, unlike other residential solar companies that talk about offering more than just solar to their customer base, we already have many of the capabilities in place to offer many of these complementary products and services.”
NRG has created a competitive business platform with the acquisition of Roof Diagnostics Solar and Pure Energies, coupled with its existing multi-channel customer reach and financial acumen, according to Crane. The company is currently ramping up with tax equity financing to either close or negotiate nearly $600 million of residential leases.
On this trajectory, NRG will install more than 10,000 systems worth about 70 megawatts by the end of the year. It plans to triple its business by the end of 2015, with an objective to install at least 35,000 systems totaling approximately 280 megawatts. This amounts to more than a quarter of what SolarCity plans to install next year.
In April, Tom Doyle, CEO of NRG's renewable energy business, said he wanted to give SolarCity "a run for [its] money" in the solar business.
NRG forecasts its costs coming down to where it can offer residential solar for between $3.20 and $3.30 per watt in 2015, with further reductions in the following years. While prices vary significantly across the country, the national average for a residential turnkey system is currently $3.81 per watt, according to GTM Research.
NRG’s targets are well within reach. In its second-quarter earnings, SolarCity reported a blended residential and commercial cost of $2.90 per watt. Installers in competitive markets like Texas have also logged system pricing in the $3-per-watt range. GTM Research forecasts indicate the average residential solar price next year will reach $3.40 per watt.
Going forward, NRG plans to leverage the reach of its retail arm with a target of 3 million customers and sell them on going solar....MORE
