Dark clouds roll in on Musk’s SolarCity

It’s not summer yet, but Elon Musk already has a nasty sunburn.

SolarCity — the solar-panel installer cofounded by two of Musk’s cousins and chaired by the billionaire founder of Tesla and SpaceX himself — slashed its 2016 installation forecast as it revealed a widerthan-expected loss.

The dimmed outlook singed SolarCity shares, which tumbled 21 percent Tuesday, to close at $17.82. The stock is down nearly 70 percent over the past 12 months.

California-based SolarCity’s quarterly results late Monday confirmed what many investors have feared: Its business model is vulnerable to competition, stiff upfront costs and regulatory whims.

“We had a bunch of headwinds that hit us all at the same time,” Chief Executive Lyndon Rive, a Musk relative who founded Solar City in 2006 with his brother Peter, said on a conference call. “These have all been addressed.”

Stumbling blocks included a surprise ruling in Nevada that slammed the state’s prospective solar customers with uncertainty about the terms of SolarCity’s 20-year power-purchase agreements.

On the positive side, SolarCity’s firstquarter installations of 214 megawatts were better than the 180 MW expected by Wall Street.

But with demand slowing after a price hike early this year, SolarCity cut its fullyear forecast to between 1 gigawatt and 1.1 GW from a 1.25-GW estimate in February.

Analysts worry that competitors who offer loans to finance solar panels are getting a leg up on SolarCity’s power-purchase agreements. SolarCity began offering a new loan product earlier this month.

SolarCity’s “credibility is likely at an alltime low,” analysts at Roth Capital said in a research note.