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A disappointing start to the week for SolarCity

It’s been a rough day for SolarCity shareholders.

First, the solar energy systems installer said it once again will install fewer solar energy systems this year than it had been predicting – another blow to investor confidence in SolarCity’s growth promises, even after the company greatly scaled back its expansion plans last fall.

Then, Tesla Motors and SolarCity said they had reached a formal agreement to merge, but at a slightly lower price than the companies had indicated when the potential deal first was disclosed in June.

Neither development pleased SolarCity investors. The company’s stock fell by 6 percent in mid-day trading, reversing a steady rebound in its share price since the preliminary deal was first disclosed.

SolarCity said it now expects to install enough solar panels to generate between 900 megawatts and 1,000 megawatts of electricity, down about 10 percent from its previous forecast of 1,000 megawatts to 1,100 megawatts.

SolarCity blamed the shortfall on lower-than-expected bookings among residential customers during the first half of the year. The softness came from SolarCity’s main market: The company is the nation’s biggest installer of residential rooftop solar systems, accounting for about one of every three solar arrays that are installed on homes across the country. But SolarCity also has regularly disappointed investors by falling short of its installation targets in recent quarters.

The company said it hopes next year will be better, mainly because of two new products that it plans to release during the second half of this year. One is a new offering that integrates solar panels with batteries that can store the energy the modules produce, and the other is “a new solar product focused on the 5 million new roofs installed each year in the U.S.”

SolarCity’s stock fell by $1.61 to $25.09 in early afternoon trading, slightly below the $25.37 per share that Tesla is offering to pay to acquire SolarCity. Tesla’s shares fell by $1.77 to $233.01.


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