Our goal was to pick a company and research the best possible country for this business to expand to.

2. Company Situation
Analysis

3. Company Background
● Brothers Lyndon and Peter Rive co-
founded SolarCity in 2006
● Traded in NASDAQ: SCTY
● Largest solar panel manufacturing plant
(New York)
● Elon Musk - Chairman

4. Company Background
● Commercial/Residential/Industrial/Utility
● Vertically Integrated
○ Acquisition of Silevo
● Most Efficient Panels In The World
● Tesla Powerwall
● 19 States

5. Mission
● Better Energy ™
● #1 in America
● Simple & Affordable
● Leasing or Buying
● Customer Service

6. Target Market
● Well-Educated
● 35-50 Years Old
● Income of Over $100,000 Per Year
● Investment Savvy Caucasians & Asians

7. SWOT Analysis
Strengths
● 1 in 3 USA homes
● Best Technology
● Vertically integrated
● 60% revenue increase
from 2Q14-2Q15
● Tesla
Opportunities
● 1% market penetration
● Solar Gardens- Minn.
● IEA 700 GW by 2020
● International
consensus to reduce
carbon footprint
Threats
● USA Tax Subsidy
● County regulations
● Solar companies
Weaknesses
● $1.8 billion LT debt
● International exposure
● 1-dimensional
● Sun
● 20 year minimum
commitment

8. Porter’s Forces
Threat of New Entrants
● high entrance costs
Determinants of Supplier
Power
● vertically integrated
Determinants of Buyer Power
(within solar industry)
● 4 leasing options
● efficiency: goal of 24%
LOW

9. Porter’s Forces
HIGH
Threat of Substitutes
● hydro, wind, coal, &
geothermal
Determinants of Competitive
Rivalry
● no product diversification
● 34% of the market segment
Determinants of Buyer Power
(within energy industry)
● ease of access to substitutes
● 20-30 year

10. Global Market Search

11. Countries Selection

12. Key Contact
● Marco Krapels
● Senior Vice President - Strategy & Global Markets
● Keys for SolarCity
○ 1200 Hours Of Sunlight
○ High Electricity Costs and Increasing
○ Needs to “Make Sense”

13. Strategy: B2B With Walmart
● Low Risk
● Established Partner - 200 Projects
● 80% of Walmart solar installations in USA
are SolarCity
● Projecting 18.68% growth in 2016
● Create a Presence, Then Expand
● “Walmart is absolutely a logical fit. It
makes a lot of sense.” - Marco Krapels
● “Right now our focus is on buildings, but
next year we are going to launch
residential.” - Lyndon Rive

14. Criteria Selection
● Sunlight Hours 10%
● Average Electricity Price 7%
● Solar Power Price 7%
● Number Of Walmarts 5%
● Subsidies 4%

15. Criteria Selection

16. Pros and Cons

17. Germany
Cons:
Subsidies: 24%
Corporate Tax Rate: 29.6%
No Walmart: 0
Pros:
Living Standard: 0.91
Price of Electricity: $0.35
Disposable Income: $31,252

18. China
Cons:
Disposable Income: >$2000
Strong Competitors
Pros:
Preferential Tax Rate: 15%
Walmart: 416
Sunlight: 2700 hours
C02
Produced: 8.5 billion tons

19. Sweden
Cons:
% of Energy from Solar: 0.1%
Low Electricity Price: $0.12KWh
No Walmart
Pros:
Extremely “Green”: 50%
Strong Collaboration: $550 million
High Disposable Income: $30,000
High Subsidies: 35%

20. United Kingdom
Cons:
Sunlight Hours: 1493
Electricity Consumed
Government Cuts
Pros:
Walmart: 616
Ease of Doing Business: 6
“It probably doesn’t make sense to put solar in England…
But the beer is pretty good.”
-Marco Krapels

21. Brazil
Cons:
Ease of Doing Business
Corruption
Disposable Income
Economy
Pros:
Walmart: 558
Subsidies: 80%
Drought
Brazil is “on our radar.” - Marco Krapels

22. Module 2 Results

23. Countries Selection

24. Reasoning
Walmart &
Corporate Tax
Rate
Sunlight Hours
& Government
Cuts
Walmart &
Low Electricity Price

25. In-Depth Market Analysis

26. Competition

27. Competition - China
● Strictly a manufacturer
● Sells panels to residential and
commercial consumers through
wholesalers
● Own 35% of Chinese market
● Produced 704 MW* of PV modules in
2015
● Major installations include: Beijing
National Stadium and Google’s
Headquarters
*1 MW hour can power about 360 homes

28. Competition - China
● Manufactures and sells PV panels
direct-to-consumer
● Vertically integrated in production
● Produced 525 MW of PV modules in
2015
● Major installations include: 2014 FIFA
World Cup stadiums, FIFA
headquarters and affiliates

29. Competition - Brazil
● MNC based in Japan
● Vertically integrated in the production
● Sells both direct-to-consumer and through
distributors
● Does not provide installation or mounting
systems
● Produced 1.4 GW of PV modules in last FY
● Major installation included: Arco
Metropolitano do Rio de Janeiro

30. Competition - Brazil
● Focus on utility systems and commercial;
do not sell to residential consumers
● Provide several proprietary mounting
systems
● Cadmium Telluride modules vs. silicon
modules
● Major Installations include: Topaz Solar
Farm, Desert Sunlight Solar Farm

31. Brazil vs. China
● Preferential Tax Rate: 15%
● Corruption sweep
● High interest rates on return: 4.35%
● Low interest on loans: 5.6%
● No import licensing or quota
requirements
Country Entry Conditions: Pros

32. Brazil vs. China
● $64 Billion in Infrastructure Improvements
● 0% import duty on photovoltaic cells
● Market in Demand for Solar
● “on our radar”
Country Entry Conditions: Pros

33. Brazil vs. China
● 84 ease of doing business
● 9.4% tariff
● 13-17% VAT
● “Guanxi”
Country Entry Conditions: Cons

34. Brazil vs. China
● State and Federal taxes 2-18%
● 116 ease of doing business
● Decrease in import licensing and quotas
(favors locals)
● High Loan Interest (32%)
Country Entry Conditions: Cons

35. Country Entry Conditions: Import Regulations
Brazil vs. China

36. Final Decision

37. Brazil
● Economy
● SunEdison
● Dilma Rousseff
Why?
China
● Centralized Government
○ Coal 2020
● Preferential Tax Rate
● $80 billion renewable energy (2014)
● 2700 hours of sunlight

38. Questions?

39. Future
Thoughts
Present

40. Leasing with SolarCity
SolarLease SolarPPA MyPower Upfront Purchase
● 20 year
● Fixed payments
● Maintenance
● Upgrade or drop
● est. $21,000
● No money down
● Various lengths
● Maintenance
● Pay for power
● 30 year loan
● APR 4.50-4.99%
● No down payment
● Maintenance
● Fully own
● est. $15,000-$25,000
● Buy outright
● 30 year warranty
● Maintenance
● Typical ROI 7-10 years
● est. $15-25,000

41. Electricity Prices
● United States (Cents per Kilowatt Hour)
○ 2009: 9.91
○ 2014: 10.45
● Brazil
○ 60% price jump in the last 12 months
● China (Cents Per Kilowatt Hour)
○ 2004: 6
○ 2011: 9
“A lot of people still think clean energy is expensive. It’s not. It costs
you less than dirty energy. So stop using dirty energy.” -Lyndon Rive

42. Oil
● U.S.A.
○ 1%
● China
○ 20%
● Brazil
○ 8.75%
● Germany
○ 35%
● Sweden
○ 21.5%
● UK
○ 37%