Shares of SolarCity (NASDAQ: SCTY), the nation’s largest solar panel installer, tanked by over 35% after New York trading hours yesterday. For Q4, SolarCity reported $115.5 million in sales, up 61% year over year, and a per-share loss ex items of $2.37, widening from a $1.33 per-share loss in the year-earlier quarter. Both measures beat Wall Street expectations for $105.6 million and $2.59, as well as SolarCity’s three-months-ago outlook for $100 million to $108 million and $2.60 to $2.75 losses.
SolarCity said it installed 870 megawatts of solar panels last year, or 73% more than in 2014.That is the equivalent of enough electricity to power nearly 150,000 average homes. However, SolarCity had predicted it would install between 878 megawatts and 898 megawatts last year. It fell just short.
The company also missed on its guidance for solar panel installations in the fourth quarter of 2015. It said it installed 272 megawatts in the quarter—enough electricity to power about 45,000 homes—compared with a forecast of 280 to 300 megawatts.
SolarCity said part of the slower installations in the latest quarter were due to the company abruptly stopping business in Nevada. The decision came after the state regulator there decided to change an important policy that made solar installations attractive to customers by paying them for the energy they produced. The regulator’s new and highly controversial decision reduces the compensation that the solar customers get and also adds on monthly fees for use and maintenance of the power grid.
The company said its year-long missed guidance was also a result of unforeseen delays in large solar panel projects for commercial companies. In its earnings release, SolarCity said, “We are not happy with these results, and recognize our need to revamp our guidance methodology to avoid any potential shortfalls going forward.”
Moreover, SolarCity’s CEO Lyndon Rive has been clear that 2016 is a year in which the company needs to reduce its losses, and simultaneously slow its growth. In its previous earnings, he said the company planned to cut its growth potentially in half and become cash flow positive by the end of 2016.
Future of SolarCity is not optimism since the growth of revenue will decrease a lot. That’s the point why the company get crashed since it’s not making money but heavily spending. For 2016, it will be a hash year, the outlook of economy is not good enough to convince the investors to buy high tech companies like SolarCity who has no positive cash flow.