More Bad News For SolarCity

Axiom Capital Research’s Gordon L. Johnson II maintained a Sell rating for SolarCity Corp (NASDAQ: SCTY), saying that a Nevada Judge had ruled against the petition to reverse the adverse rooftop solar ruling.

A Carson City judge had ruled against a petition to reverse Nevada's rooftop solar rate hike. The judge ruled that the petition did not “qualify as a referendum,” rather should be classified as an initiative petition, which requires legislative review before becoming law.

“The proposed measure would return Nevada to old, lower rates and remove any cap on the number of solar users statewide,” analyst Gordon Johnson wrote. He mentioned that a coalition, including NV Energy, had challenged the petition in court. Referendum supporters could appeal Judge James Russell's decision.

Regulators had approved higher rates for rooftop solar customers last year. “Commissioners say it phases out subsidies, while rooftop solar companies say it's forced layoffs,” Johnson stated. He termed the latest ruling as yet another “blow” to the rooftop solar industry.