Whole Foods Reaches Installation Deals With SolarCity, NRG Energy

By Tess Stynes 

Whole Foods Market Inc. reached separate agreements with SolarCity Corp. and NRG Energy Inc. to install rooftop solar-power systems on many of the organic- and natural-foods supermarket chain's stores, giving SolarCity's stock a boost.

SolarCity agreed to install solar-power systems on the rooftops of nearly a quarter of Whole Foods Market Inc.'s locations across the U.S. Under the SolarCity agreement, Whole Foods plans to retrofit 100 of its 434 U.S. stores with rooftop solar systems. SolarCity will design each location's solar-power systems and plans to begin installation this spring.

Whole Foods will receive a discount on solar power purchased from SolarCity, locking in rates for an undisclosed number of years. Financial terms weren't provided.

Separately, NRG Energy plans to install rooftop solar systems at as many as 84 Whole Foods stores and distribution centers across nine states. Financial terms weren't provided.

SolarCity's shares, down 53% this year, rose 9.6% to $26.49 in recent trading. However, NRG Energy fell 4.7% to $13.

Last month, SolarCity posted stronger-than-expected results for the fourth quarter, but acknowledged that it was continuing to fall short of its installation goals.

SolarCity, whose chairman is billionaire entrepreneur Elon Musk, said it has seen strong residential installations, but it continues to underperform in commercial installations as big projects often miss construction deadlines.

The company had forecast that its first-quarter installations will increase 18% year-to-year but decline 34% from the fourth quarter. The company cited its decision to shut down its Nevada business after the state's public utilities commission recently said that solar-panel users would get paid for their energy at lower rates.

Princeton, N.J.-based NRG Energy, which last year had unveiled plans to split off its renewable energy business under then-chief executive David Crane, recently said that it was reintegrating its renewable energy business that focuses on commercial and industrial customers back into NRG. Decisions are expected in the second quarter on other parts of the renewables business, including its residential rooftop solar business.

Mr. Crane, who stepped down in December, was the architect of the company's strategy to expand NRG's fleet of gas- and coal-burning power plants and build a presence in solar and wind power. But a billion-dollar investment in renewable energy failed to generate the profits that Mr. Crane had anticipated and became a drag on earnings and the company's stock. In September, Mr. Crane announced a new strategy to split off NRG's renewable-energy enterprises and find investors willing to sustain them until they become profitable.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

March 08, 2016 10:47 ET (15:47 GMT)

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