There is no need to compete with utility solar. Rooftop solar is not going to replace utility solar but it will compliment it. Benefit to residential solar is battery backup/green energy for homeowner and power storage for utility at reduced cost.
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There is no need to compete with utility solar. Rooftop solar is not going to replace utility solar but it will compliment it. Benefit to residential solar is battery backup/green energy for homeowner and power storage for utility at reduced cost.
Perfectlogic
Member
You could power the entire US using only a small part of the Nevada desert.
Utility scale solar and residential solar is in the same market, the market for electricity. You can read my previous posts for a thorough explanation for why this is the case.
Perhaps they could...yet they are clearing land in Minessota.
Rooftop solar offers more benefit to the homeowner than utility solar such as battery backup, guaranteed green energy and price stability (with utilities owner is exposed to fossil fuel investments, costly mistakes and profit taking).
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TheTalkingMule
Distributed Energy Enthusiast
People are having a real tough time with the concept of utilities as servants to the masses, not the other way around. Residential solar doesn't have to "compete" within anything, the dynamic has permanently flipped and it's the world on the other side of the meter than now needs to adapt.
Anyone who not standing directly next to customers providing services they desire will make no money moving forward. There's no way around it.
Don't know how many times I have to correct plogic:
Utility solar does not compete with residential solar.
Utility = not retail, not delivered energy to retail customer
Rooftop = retail, delivered energy to retail customer
Utiltiy solar services the utility, the utility pays them whole sale for the energy, then retail to its hostage rate payers. The utilities use their infrastructure to get that energy to the end user.
Rooftop services the end user. The infrastructure for that solar is on their roof. It's delivered energy. The rooftop solar customer's infrastructure is used by the utiltiy to deliver the rooftop solar *retail value delivered energy* to their other rate payer without the need to use the same entire infrastructure traditional energy has to to get to the same customer.
Utility level solar offers no infrastructure advantages, rooftop does.
Utiltiy solar does not directly benefit a ratepayer, rooftop solar directly benefits a ratepayer.
Utility solar works for the monopoly utility, rooftop solar works for the ratepayer.
Shampoo is different from conditioner...
Utility solar does not compete with residential solar.
Utility = not retail, not delivered energy to retail customer
Rooftop = retail, delivered energy to retail customer
Utiltiy solar services the utility, the utility pays them whole sale for the energy, then retail to its hostage rate payers. The utilities use their infrastructure to get that energy to the end user.
Rooftop services the end user. The infrastructure for that solar is on their roof. It's delivered energy. The rooftop solar customer's infrastructure is used by the utiltiy to deliver the rooftop solar *retail value delivered energy* to their other rate payer without the need to use the same entire infrastructure traditional energy has to to get to the same customer.
Utility level solar offers no infrastructure advantages, rooftop does.
Utiltiy solar does not directly benefit a ratepayer, rooftop solar directly benefits a ratepayer.
Utility solar works for the monopoly utility, rooftop solar works for the ratepayer.
Shampoo is different from conditioner...
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Perfectlogic
Member
If utility scale solar isn't delivered to consumers, then who is it delivered to?
Lets slow things down a bit. Take this step by step. Remember that the truth is based on facts, not emotion. Do you acknowledge that there are 3 parts, 3 different things that costs money, to delivering power on demand to the consumer? The 3 things being generation of electricity, distribution (which residential solar also needs as it can't function without net metering as we saw in Nevada) and balancing demand and production, which can be either tweaking production so it matches demand or saving power till its needed using batteries for example. Can you agree that these 3 things are needed whether the electricity is generated from rooftop solar or utility scale solar?
If you agree to these 3 things, I would like to know how much each of the 3 parts of the cost structure is for the residential solar model. I would also like to hear from any other who believe the residential solar model is financially viable today.
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This thread's discussion of the complexities of solar and its economics are a good illustration of the distraction that Solar City could present to Tesla management. I just don't see Tesla's being able to manage expansion for Model 3 simultaneously with acquiring and "fixing" SolarCity as well as running their current business (which by itself has plenty of problems).
TheTalkingMule
Distributed Energy Enthusiast
I've been quietly following these discussions so far - while I think that utility Solar is a good thing, that hopefully will be widely implemented, for me, rooftop has a much more personal impact.
For utility I pay whatever the utility can get away with, and I get the 'satisfaction' that it isn't killing the planet so fast. For rooftop I know exactly what I paid (I have both a system I have owned for 9 years, and an additional SCTY leased system) and I know exactly how much less power I have bought from the utility over the years and hence how much I have saved. In both cases the savings more than compensate for the cost - the owned system is easily paid off now, and the leased system saves me approx $60 a month going into the future.
So, for me, they are both attractive options, but a very distinctively different financial model
It is telling that people have bought into the echo chamber that Solarcity needs "fixing" or needs a "bailout." It is far from the reality.
The power of main steam media influence is significant. All you have to do is find out who owns them and who are their biggest advertisers and you'll see why...
Perfectlogic
Member
The problem is that your savings are being subsidized by everyone else using your utility. If you have followed the discussion you would know that the power generated on your roof is 4 times as expensive as solar power generated from large projects. The utility isn't earning a 75% profit margin, but a 10% profit margin, less than SCTY will earn if they recieve money for the duration of the contract. SCTY is able to undercut the utility in states where they recieve free service from them through net metering. In states where there is no net metering they would lose a lot of money if they tried to offer the same deal.
If everyone had solar on their roof they would have to pay the actual price, and then you would end up paying much more than you do now through the utility. An easy way to understand it is by the thought experiment of say California was 100% residential solar, would electricity be cheaper or more expensive?
The answer to that question is very simple. As I have explained before there are 3 costs to delivering power to the consumer on demand. Electricity generation, load balancing and distribution. Already when looking at electricity generation the winner becomes very obvious as large scale projects are able to sell power for 3.7c/kwh, while SCTY is selling rooftop solar power for 15c/kwh (with an escalator making it even more expensive).
Distribution is around 16% of the cost, so perhaps 2c/kwh. Lets say with rooftop solar it is half the price because we don't need the extra bit of reach of the grid to the large projects. This is very generous but it won't make a difference anyway, even if it was free.
Balancing demand and production is clearly expensive as there is still a significant gap between the costs we know utilities have and the 2 parts we have gone over. This might be around 5c/kwh at present for the utility. Now for the residential solar model where 100% of the power is from solar, the production is much more concentrated, fast most power will be generated during a 6 hour window during the day, this will add cost to this part of the cost structure as we want the production to match the consumption.
All in all the residential solar model is 15c/kwh for generation, 1c/kwh for distribution and more than 5c/kwh for load balancing, that is more than 21c/kwh, probably around 25c/kwh, so double the current utility cost.
These are all facts, you can look everything up from SCTY's PPAs to the cost structure of utilities.
@Foghat
Are you not going to give an answer to my last post? Is it because it's harder to beat around the bush when talking tangible cost?
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There is one point to be made crystal clear, is that if Solarcity execs and shareholder advocates remain silent, then complete utter bias has taken over the aquisition process and the deal will go through as is.
It would be telling to see Solarcity executives argue this pricing is how they value their growth over the next 5-10 years. It would be truely interesting how Lyndon Rive will explain his media statements that solar will reach a "tipping point in 5 years" in all energy consumption, if he meant it was going to slow down not speed up.
A clean assessment by executives of the value in the offer as equivalent to the value they see in this company 5-10 years from now on their own would be very helpful to me. I bet you they can't do with a straight face.
It would be telling to see Solarcity executives argue this pricing is how they value their growth over the next 5-10 years. It would be truely interesting how Lyndon Rive will explain his media statements that solar will reach a "tipping point in 5 years" in all energy consumption, if he meant it was going to slow down not speed up.
A clean assessment by executives of the value in the offer as equivalent to the value they see in this company 5-10 years from now on their own would be very helpful to me. I bet you they can't do with a straight face.
I thought the consensus was that SolarCity has no idea how their business will grow after MyPower did not pan out? I believe that uncertainty and regulations are killing it's valuation. As far as Mr Rive's statements, they are forward looking and subject to known and un-known risks.
No, mypower did not kill the business, it was less then a year long and generated a small portion of revenue.
Lease/ppa are still the majority (80%)of business of *all* solar(r,c&i,util) industry wide.
They also have a new loan product that's 10 year and 20 year now.
The regulatory certainty in key states has been locked. For example, any install in California (which is 50% of Solarcity market) into 2019 will have no change in net metering and will grandfathered under those terms. Consumers now what they are going to get now and into the future. This also gives incentive to current California customers to get in now before the old net metering cap expires where they get a modest better deal before the switch over. Solarcity could live in California alone and have compound growth from today's numbers. They just opened an operations center in Houston and have expanded operations centers on east coast as well. They now employ just as much or more people then tesla at 15-16k people and have well over 300k customers of which the vast majority are paying customers into the 2030's at 11bln in nominal contracted payments.
The future is the single greatest part of valuation. You don't buy what they are today, you buy what value they bring to the table from now and into the future. Solarcity's value tomorrow, 2 years, 5 years, 10 years from now is *significantly* greater then what the offer from tesla suggests. Not even close.
Actually, this is a great time for the purchase of both vivint and sunrun (#2 behind scty) for a $1bln in stock swap to Solarcity. If the assets are good, which I suspect they are, Solarcity could boost market share to over *50%* of the entire residential market in the United States.
Now that is wild given the super high quality 20 year reoocurring payment assets both these companies have right now...
The current value of a complete asset sale is 3.25/watt, so Solarcity has over $ 6.5billion in asset value in today's dollars right now on their books. Add another GW for YE 2016, you have $9.75 billion in asset value in today's dollars.
And tesla wants to offer $2.7bln to Solarcity investors?
Come on, Elon, the actual market for assets is worth almost 4x more just going off year end numbers...
Again, stock offer is dog****. I would, however be open to a substantially better convertible bond option over a long time period equal to $90-100 per scty share...
Now that is wild given the super high quality 20 year reoocurring payment assets both these companies have right now...
The current value of a complete asset sale is 3.25/watt, so Solarcity has over $ 6.5billion in asset value in today's dollars right now on their books. Add another GW for YE 2016, you have $9.75 billion in asset value in today's dollars.
And tesla wants to offer $2.7bln to Solarcity investors?
Come on, Elon, the actual market for assets is worth almost 4x more just going off year end numbers...
Again, stock offer is dog****. I would, however be open to a substantially better convertible bond option over a long time period equal to $90-100 per scty share...
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The Top 10 Advertisers, who represent about 40% of the entire ad spend are:
PG&E, AT&T, GM, Comcast, Verizon, Ford, American Express, Fiat, L'Oreal, Disney
Which one of them are anti-solar trying to suppress the progress of SolarCity through their "control" of the main stream media?
Oh, and before you say GM, you may want to know that GM ranks #20 in the list of largest use of solar power in the U.S with 11MW across 16 facilities (as of 2014).
Perfectlogic
Member
Seems like you are the only one in the world who knows the true value of SCTY, even the management of the company is completely clueless and about to sell it off for peanuts compared to what it is really worth. How crazy is that? Only you know the real truth, and 1 or 2 other valuation experts on this forum. If only it was the other way around and you had it wrong and didn't know better than the company's management and everyone else, but that can't be it, impossible.
A few weeks ago John Hancock bought complete systems revenue streams for 3.25/watt. That's fact. Currently Solarcity has over 2Gws under management, projected 3GWs by year end. If I was tesla, I would be extremely happy if Solarcity accepted my offer.
As a matter of fact, as tesla I would monetize the entire revenue stream of the assets for all of them since Solarcity expects to do well over 1.1gws in 2017, which could pull in $3.575bln in upfront cash to tesla next year alone and at 2.25/watt all in cost, they will net $1.1 bln in *profit*
In addition, Solarcity currently has pilot programs with major utilties to prove out their software operating system (OS) within the distribution system for aggregation. In effect, Solarcity will become the MS Windows or OSX of energy aggregation on the distribution system, which would control *all* DERs not just Solarcity's assets.
They will be performing functions traditionally done by utility transformers and capacitor banks... through
*customer sided inverters*
....which provides a totally separate revenue stream outside of energy sales. This market is valued at:
$50 billion per year.
I say again, $50 billion per year *in addition* to energy sales.
Who's getting the deal of the century at $2.7bln?
Not Solarcity investors.
As a matter of fact, as tesla I would monetize the entire revenue stream of the assets for all of them since Solarcity expects to do well over 1.1gws in 2017, which could pull in $3.575bln in upfront cash to tesla next year alone and at 2.25/watt all in cost, they will net $1.1 bln in *profit*
In addition, Solarcity currently has pilot programs with major utilties to prove out their software operating system (OS) within the distribution system for aggregation. In effect, Solarcity will become the MS Windows or OSX of energy aggregation on the distribution system, which would control *all* DERs not just Solarcity's assets.
They will be performing functions traditionally done by utility transformers and capacitor banks... through
*customer sided inverters*
....which provides a totally separate revenue stream outside of energy sales. This market is valued at:
$50 billion per year.
I say again, $50 billion per year *in addition* to energy sales.
Who's getting the deal of the century at $2.7bln?
Not Solarcity investors.
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I could start selling flying hats, but just because no other company has a product like flying hats doesn't mean my product will automatically become successful.
I think people are forgetting about how much Powerwalls still cost right now. You'd need $10-20k+ worth of batteries, or far more, to help power the average US home solely on solar. One Powerwall isn't going to do crap for someone going off-grid--it's purely for short-term backup power only. Or you can over-install on solar, in which case you're spending a ton extra on panels.
One Powerwall will run the average US home for a few hours at most, let alone through a winter overnight followed by a couple gloomy, outcast days if you plan to keep using everything like normal. (Oh and of course, an off-grid solar user will have to waste tons of money on panels that are only useful during winter months--this is far less an issue for utility installations).
There are very few people rich enough to go off grid without compromise. Grids benefit from economies of scale and--most importantly--are improved by the best of all companies. Cheaper Tesla Powerpacks can be combined with cheaper Chinese solar panels. It's a lot easier to "right-size" a utility-based solar+battery installation when you're averaging use over several thousand homes.
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