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On Wednesday, recently publicly traded Solar City (NASDAQ:SCTY) announced a partnership with Honda Motor (NYSE:HMC). With new access to funds and a large base of millions of customers, the joint venture could be a huge turning point for Solar City into the future.

Solar City is the largest full service solar provider. The company provides cheaper energy to residential and commercial customers. The company's website states "every 5 minutes someone switches to clean, more affordable energy, with Solar City" referring to the company's competition against regular utilities.

The new deal with Honda will allow Solar City to provide Honda and Acura customers and dealerships with lower cost energy options. Honda will shell out $65 million in financing to help over 3,000 homes and dealerships convert to solar energy. Honda helps customers by removing "the high initial investment associated with installing solar power." Customers who take advantage of the new joint venture will be able to pre-pay their bills or pay a monthly amount that rises slightly every year.

Solar City offers full service solar energy options through this timeline:

· Consultation

· Design

· Installation

· Monitoring

· Maintenance

· Guaranteed performance

Customers in several states have access to Solar City's programs and can have a consultation to see if the company can save them money. The states include:

· Arizona, California, Colorado, Delaware, Hawaii, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Texas, Washington and Washington D.C.

Solar City already has strong relationships across its four customer bases of government, education, commercial and military. Large customers include the City of Sacramento, City of San Jose, Lancaster School District, Scottsdale School District, Wal-Mart (over 100 stores), Intel (NASDAQ:INTC), Toyota (NYSE:TM) and eBay (NASDAQ:EBAY).

The new relationship will hopefully translate to many Honda dealerships in the 14 covered states switching to solar energy. Honda will use incentives and financing to help make the switches.

In 2012, Solar City installed 156 MW worth of solar panels after plans called for 146 MW. This marked an increase of over 100% from the 72 MW in 2011. In the fourth quarter alone, Solar City saw 72 MW added to its base. In 2013, Solar City expects to install 250 MW of solar panels (190 MW residential, 60 MW commercial), marking a 60% increase from the 2012 sales figures. This guidance was announced on January 3rd, prior to the new Honda joint venture. Solar City will report fourth quarter and full fiscal year figures on March 6th. My guess is guidance should be upped to much larger numbers at that time, which will send shares higher.

The risks from an investment in Solar City are present and have been similar in other solar companies. The company faces expansion from many other small players present in one or more states. However, Solar City has the most comprehensive full service coverage. Solar City may face trouble expanding from its current base of 14 states and could be capped on its expansion. Solar City is not yet profitable and is not expected to turn a profit in earnings per share next year.

Shares of Solar City shot up 4% to over $19, setting a new 52-week high after briefly touching $20.38. Shares are now up over 50% since the company's first day on the public markets. Shares went public at $8, pricing at a range below guidance of $13 to $15. Shares are now up over double since that time, but now appeared headed for a breakout.

Source: Solar City Partnership With Honda A Game Changer