The question you should be asking is, if utilities can install solar more cheaply than SolarCity, why don't they offer retail rates lower than SolarCity?
I must admit I don't know much about this whole thing, but does the utility pay for the infrastructure, or some of it? That would make for an uneven playing field. Every source I have found says utility scale solar is much cheaper than residental.
"Strengthens grid- Having distributed solar helps lower peak demand all over, When combined with small batteries it will alter peak demand dramatically as solar reaches higher penetrations."
This peak demand argument works for both resi and utility.
"No transmission losses - Land is rarely free and sometimes very expensive for a utility solar farm and sometimes they must be placed pretty far from where the power is used. This requires expensive Transmission lines and losses. So you already lose some of that advantage."
This might be true, but according to the articles I've found utility is still significantly cheaper.
"The main reason I am excited about residential over Utility is it so much easier to execute. Each Utility Project is unique and requires extensive engineering work and paperwork. Their is a high likelihood that there will be delays with utility projects because there are so many actors at play."
Utility scale can be huge projects though, last year First Solar built a single project bigger than the whole of SCTYs installations for the year put together.
"Solar City Management has found a way to double every year and it looks like they will continue to do that which is going to result in some staggering wealth generation"
Like I pointed out before they are still a relatively small player, growing this fast will soon be a lot harder, if utility scale really is significantly cheaper it could put a stop to the rampant growth.
I don't see why utility should have a harder time with legislation than residental, I would argue the opposite would seem more likely given who has the money muscle.