SolarCity And Google's Nest Labs: What Are They Working On?

Earlier this week, SolarCity Corp SCTY published a blog post and news release announcing a partnership with Google Inc GOOG's Nest Labs to provide 10,000 California solar customers with Nest Learning Thermostats.

According to a greentechmedia report, "the goal will be to monitor how pairing smart thermostats with photovoltaics can make systems more valuable for homeowners and the grid."

SolarCity is the first pure-play solar energy company to partner with Nest. Nest began its Energy Partner Program in 2013, signing up utilities and alternative energy providers to help customers to lower demand and receive "rush hour rewards," which can yield savings as high as 55 percent reducing the energy required for home cooling.

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Tale Of The Tape

SolarCity's largest competitor, Blackstone sponsored Vivint Solar VSLR, received a boost in March when Credit Suisse analysts raised their VSLR price target after meeting with management.

SolarCity's offering to include a $249 Nest Learning Thermostat with its roof-top panel installation could also help to boost sales in the competitive California residential solar market.

Helps Reduce Peak Demand - Lowers Energy Bills

The less energy that a residential customer uses during peak heating and cooling months, the greater the savings from not needing to buy energy from the electric utility during peak times.

This is also a win for the environment as less efficient, (and potentially higher carbon emitting power plants), may not be required to be fired up to help meet peak demand. Demand reduction programs also reduce stress on the utility distribution grid at times of peak demand for power.

SolarCity - Consumer Offering

SolarCity will integrate Nest data into its "MySolarCity" app to help homeowners visualize and understand energy consumption and offer "seasonal savings" to customers willing to let the Nest thermostat bump the set-point up or down a couple of degrees to save energy. The next level of savings will come from the SolarCity "Works With Nest" initiative to further reduce energy consumption by monitoring or controlling appliances, lighting, pool equipment and ultimately energy usage across the entire home.

The Bigger Picture

Brian Farhi, channel partner lead at Nest, was quoted in greentechmedia: "This creates the ability to combine information from the thermostat with other devices and link it up to the solar system."

The ability to offer home-wide energy management to customers will help SolarCity to stay competitive in the future.

The combination of distributed roof-top photovoltaic energy generation, bundled with improved battery technology and comprehensive home energy management, could become a game-changing offering for SolarCity customers in the future.