Alternative energy is an emerging powerhouse industry within the United States. Although there are many variants of renewable energy, like wind, geothermal, hydroelectric, and oceanic, the leader is clearly solar. Solar power is attractive because it harnesses energy from an abundant, and natural source, the sun. Since the sun isn’t going anywhere for quite some time, solar energy offers promising prospects.

A Silicon Valley company, SolarCity (SCTY), is at the forefront of the solar power revolution. SolarCity’s unique approach is to provide solar power to its customers on a subscription basis. SolarCity claims that, by utilizing this business model, its customers can save money (a monthly fee is far less costly than aggregate utility costs). Thus, SolarCity utilizes a service-based strategy; it does not sell solar panels. SolarCity specializes in leasing, distributing, and installing solar panels to individuals and commercial entities. This approach makes it desirable for customers to sign a SolarCity lease, as there are no upfront costs.

This business model has resulted in astronomical growth. The company’s stock appreciated from $10.73 per share in January 2013 to $84.96 per share a year later. However, in the last month, SolarCity has encountered significant problems. From February to March, SolarCity’s stock price dropped to $60 per share, thus prompting investors to ask, “is SolarCity still a buy?” In short, yes.

The first promising sign for investors is that the solar industry is rapidly expanding. The alternative energy market will continue to experience massive growth over the next decade. Some analysts predict solar energy could produce up to 100 gigawatts of energy annually by 2018 (nearly a threefold increase from 2013). For such a hefty goal to be met, companies like SolarCity will have to expand in order to meet demand. This directly affects revenue pipelines, and will increase SolarCity’s bottom line.

Secondly, SolarCity is working to streamline its operations so as to increase profits. In late 2013 they purchased Zep Solar, a company that specializes in the installation of solar panels. By acquiring Zep, SolarCity now owns an experienced division that can accomplish efficient and timely solar panel installations. In an interview with PV-Tech, SolarCity’s executive vice president of operations, Tanguy Serra, stated “by acquiring Zep Solar, we can [now] deliver solar electricity at a lower cost than was previously possible.” This acquisition, and new business model, gives SolarCity a huge comparative advantage in that it has become a vertically integrated residential and commercial solar company.

Possibly the most significant reason as to why SolarCity’s stock will recover is the simple fact that its chairman and owner is Elon Musk, an entrepreneur who also founded SpaceX, Tesla Motors (TSLA), and PayPal. Musk is an experienced businessman whose past ventures have proven extremely successful; this is reassuring in that Tesla and SolarCity both offer alternative energy products, and market to similar consumers. Therefore, given Tesla’s recent string of successes under Musk, it appears that SolarCity is poised for a recovery as well.

Furthermore, in December of 2013, Tesla and SolarCity established a partnership that allows SolarCity to use Tesla’s battery technology. The batteries can collect and store solar energy for cloudy days, or for periods of high energy demand. Such technological partnerships, as of now, greatly aid SolarCity’s recovery. Additionally, because of Tesla’s new dependence on SolarCity for battery sales, it is in Musk’s interest to help SolarCity succeed so that both companies don’t face further problems.

However, despite these promising circumstances, SolarCity remains a highly volatile stock. Yet, its recent price decline presents an opportunity to investors. Analysts predict that SolarCity’s stock price could grow to $95 by the end of 2014 (from the ~$60 current trading level). Couple this with the increasing popularity and promise of renewable energy, and SolarCity is poised to experience high growth. Additionally, its partnership with Tesla, and relationship with Elon Musk, makes SolarCity a difficult company to bet against in the long-run.