Deutsche Bank Sees Plus For SolarCity In California Rate Case

Newly proposed electricity rates in California will help

substantially expand its potential market there, an analyst said Monday. Deutsche Bank's Vishal Shah reiterated a Buy rating and $90 target on SolarCity, where Shah said bookings will improve as a result of the preliminary rate proposal in California. The proposal, up for a vote by regulators later this year, would reduce the number of pricing tiers for electricity from the current four to two, as noted in the

. As rates flatten and rates paid by lower tiers are increased, Shah said SolarCity's potential market will grow in California. The new rates provide SolarCity with the "optionality" to boost its prices, according to Shah. Moreover, by 2019 California regulators want utilities to charge for electricity at a variable rate based on time of use. SolarCity's increasing emphasis on storage products, including the addition of

batteries into its product lineup, is a "significant step toward a future value stream," according to Shah. Analysts on average maintain an Overweight rating and $80.38 target on SolarCity according to data compiled by FactSet.