SCTY Acquisition makes no strategic, financial or operational sense!

[TheTalkingMule]

Why should anyone want to or have to go off grid? Utilities are supposed to provide services that people can't provide for themselves. People can now power themselves, utilities will need to adapt in the most efficient mane possible. That is their mandate.

 

[RichardL]

The problem is that your savings are being subsidized by everyone else using your utility.

So by your reasoning, if I turn off my lights and don't use that power, then I am costing all my neighbors money? By adding solar, at my expense, I am using less power from the utility (note, I am not off the grid - simply buying less from them) and that is costing them more somehow, than if I simply never used it - does that mean that if I increase my power usage, everyone saves?

 

[Foghat]

So by your reasoning, if I turn off my lights and don't use that power, then I am costing all my neighbors money? By adding solar, at my expense, I am using less power from the utility (note, I am not off the grid - simply buying less from them) and that is costing them more somehow, than if I simply never used it - does that mean that if I increase my power usage, everyone saves?

Your Led lighting is being subsidized by non led lighting neighbors... If you don't switch back to non led, Expect a higher bill next month to compensate your neighbors....

 

[Vitold]

So by your reasoning, if I turn off my lights and don't use that power, then I am costing all my neighbors money? By adding solar, at my expense, I am using less power from the utility (note, I am not off the grid - simply buying less from them) and that is costing them more somehow, than if I simply never used it - does that mean that if I increase my power usage, everyone saves?

Did you pay for materials and labor to bring electricity to your house, maintenance, tree pruning etc? How about billing system or technical support department? All that is being paid for through electricity fees therefore person in your example - one who uses electricity below certain amount - is being subsidized by those who use more.

 

[ggnykk]

Far from 20%. I am well aware that the panel is a small part of SCTY's cost, it is still significant though. The fact that is is such a small part is the whole problem, they need to cut their soft cost tremendously in order to survive in a level playing field environment.

You were the one that brought up the low cost Chinese solar panel are super cheap now and SCTY panel are too expensive or whatever. And SCTY will fail coz of that etc. But now, you seems to suggests that's not the real problem, it is the soft costs...

 

[ecarfan]

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.

I think that is an over-simplification. By modifying slightly your usage pattern, moving your higher demand to midday, many people could power a small home off PV and one Powerwall as long as they do not need to run AC at night. Those with large houses would need more than one Powerwall, and many of them could afford such a purchase.

It's largely a matter of modifying your power usage habits. Some people never give a thought to when they turn on their dryer, for example.

 

[Perfectlogic]

So by your reasoning, if I turn off my lights and don't use that power, then I am costing all my neighbors money? By adding solar, at my expense, I am using less power from the utility (note, I am not off the grid - simply buying less from them) and that is costing them more somehow, than if I simply never used it - does that mean that if I increase my power usage, everyone saves?

No, that is not what I'm saying, I don't know why this is so hard for you guys to understand. You should read my response to you in post #211 on the last page again, where I explain the 3 part cost structure of delivering electricity to consumers on demand. If you went completely off grid you wouldn't cost anyone anything. But right now the utility is taking all the excess power you produce at mid day and giving it back to you when you need it. This is called net metering. This costs the utility money but you are getting the service for free. This expense is then paid for by the rest of the utility's customers.

 

[Perfectlogic]

You were the one that brought up the low cost Chinese solar panel are super cheap now and SCTY panel are too expensive or whatever. And SCTY will fail coz of that etc. But now, you seems to suggests that's not the real problem, it is the soft costs...

Soft costs is the biggest problem in terms of residential solar vs utility scale solar. For SCTY panel cost is something like 20% of their cost, significant but not a huge percentage. If SCTY was on their own (not acquired) and they invest heavily in the Buffalo plant which turns out to not being able to compete with the Chinese they will take a massive loss on the venture which could be a big problem for the business as they are already in a dire financial situation.

 

[Drivin]

many people could power a small home off PV and one Powerwall as long as they do not need to run AC at night.

Is that true?

The average residential monthly usage in California in 2014 was 911kwh.
(which seems much less than average in the U.S.)
According to one online system sizing, that is around 44 panels. That seems to require a lot of roof space with the proper orientation/flatness (vs.tiered roofing that is popular here) for a small home.

 

[Foghat]

Fundamentally, Solarcity uses less of everything to install mass produced high efficiency modules. It's just plan math here. They use approx 1/3 less of everything, compared to a standard efficiency panels of lower panel cost. As we know, at a scale with automation advances Solarcity has put in place (Elon influence here), you can see how overall cost will go down.

Soft costs revolve around permitting and inspection times and specifically in California,(which is 50% of all installs) they enacted legislation that significantly reduces permitting time.

In addition, Solarcity will continue to buy current demand of Chinese panels and is expected to only increase its orders, so Chinese manufacturers will continue to produce at capacity. Also, Solarcity buys tarring free panels in Mexico for operations there so I expect non stop demand for Chinese panels. Bottomline, Solarcity is ordering from all its suppliers in addition to its own module manufacturing self consumption.

I know those that have invested in Chinese stocks are hurting too right now, but it's not Solarcity's fault. Makes no sense to troll it to pump your own.

 

[Foghat]

Did you pay for materials and labor to bring electricity to your house, maintenance, tree pruning etc? How about billing system or technical support department? All that is being paid for through electricity fees therefore person in your example - one who uses electricity below certain amount - is being subsidized by those who use more.

If I use 1kwh per day, am I not paying for that kWh in the price/kWh my utility charges?

I have no obligation to pay more money to the utility because I use less electricity then they want.

If they have a problem with their pricing of services, they need to change how they do it. not me the consumer.
In addition, the grid as it stands has been paid for over and over again already through previous rate payer payments.

The cost of maintenance, billing, and delivery is just but a portion of the price/kWh. They also are charging for future investments in peaker plants, among other future generation and transmission/distribution increases. Commissions plan these "investments" 20 years out and utilities include them in the price/kWh rates.

If your utiltiy could invest in using home owner solar instslls (DER assets) today to lower your price/kWh in the future, would you do it, or would you sign off on new generation that will increase your price/kWh in perpetuity as now you have to pay for a stranded asset in 10 years time?

Ask Californians about San onofre nuclear closure, or the nat gas peaker plant early closure at Morrow bay... how have those stranded assets been on their utility rates?

 

[Perfectlogic]

Fundamentally, Solarcity uses less of everything to install mass produced high efficiency modules. It's just plan math here. They use approx 1/3 less of everything, compared to a standard efficiency panels of lower panel cost. As we know, at a scale with automation advances Solarcity has put in place (Elon influence here), you can see how overall cost will go down.

Soft costs revolve around permitting and inspection times and specifically in California,(which is 50% of all installs) they enacted legislation that significantly reduces permitting time.

In addition, Solarcity will continue to buy current demand of Chinese panels and is expected to only increase its orders, so Chinese manufacturers will continue to produce at capacity. Also, Solarcity buys tarring free panels in Mexico for operations there so I expect non stop demand for Chinese panels. Bottomline, Solarcity is ordering from all its suppliers in addition to its own module manufacturing self consumption.

I know those that have invested in Chinese stocks are hurting too right now, but it's not Solarcity's fault. Makes no sense to troll it to pump your own.

Not hurting as much as those invested in SCTY. Why would I "troll" SCTY to "pump" my investment in Chinese solar companies? I haven't pumped Chinese solar companies at all. And why wouldn't I want SCTY to succeed when they are a customer of the company I invest in? Do you ever stop to think about if what you are writing even makes sense, or do you just write posts in order to make yourself feel better?

 

[RichardL]

No, that is not what I'm saying, I don't know why this is so hard for you guys to understand. You should read my response to you in post #211 on the last page again, where I explain the 3 part cost structure of delivering electricity to consumers on demand. If you went completely off grid you wouldn't cost anyone anything. But right now the utility is taking all the excess power you produce at mid day and giving it back to you when you need it. This is called net metering. This costs the utility money but you are getting the service for free. This expense is then paid for by the rest of the utility's customers.

You are assuming I am generating more than I am consuming at any time - I never mentioned that. I am running A/C during the peak hours and generating power as well - I am still consuming power during peak hours, just not so much. So I cannot see (even after reading your posts) why that is costing the utility - is it because the 'threat' that I might in some way, or is there some kind of required minimum consumption law that I am unaware of?

 

[Perfectlogic]

You are assuming I am generating more than I am consuming at any time - I never mentioned that. I am running A/C during the peak hours and generating power as well - I am still consuming power during peak hours, just not so much. So I cannot see (even after reading your posts) why that is costing the utility - is it because the 'threat' that I might in some way, or is there some kind of required minimum consumption law that I am unaware of?

I thought it was pretty safe to assume your system produced excess power during peak production as you mentioned you had both an old system and a new one from SCTY. If you really doesn't use net metering at all which would mean you only produce half your energy consumption or perhaps even a bit less, then sure you probably aren't costing the rest anything. I think far most of the installs SCTY make is for most of the residents energy needs, otherwise they wouldn't pull the plug on Nevada the day after they got rid of net metering.

 

[Vitold]

If I use 1kwh per day, am I not paying for that kWh in the price/kWh my utility charges?

I have no obligation to pay more money to the utility because I use less electricity then they want.

If they have a problem with their pricing of services, they need to change how they do it. not me the consumer.
In addition, the grid as it stands has been paid for over and over again already through previous rate payer payments.

The cost of maintenance, billing, and delivery is just but a portion of the price/kWh. They also are charging for future investments in peaker plants, among other future generation and transmission/distribution increases. Commissions plan these "investments" 20 years out and utilities include them in the price/kWh rates.

If your utiltiy could invest in using home owner solar instslls (DER assets) today to lower your price/kWh in the future, would you do it, or would you sign off on new generation that will increase your price/kWh in perpetuity as now you have to pay for a stranded asset in 10 years time?

Ask Californians about San onofre nuclear closure, or the nat gas peaker plant early closure at Morrow bay... how have those stranded assets been on their utility rates?

Here's an example: If support is $100/hour and utility is charging you extra 1c per kWh (to recover the cost) and you use 500kWh per month you can call them every 20 months, 100kWh - every 100 months, 50kWh - every 200 months. At some point your usage is not paying for the services provided.

 

[Johan]

FWIW, my view on this Rooftop solar-utility-grid-net metering-pricing-fairness discussion is:
-Traditionally the grid has supplied all the electricity to all the connected customers. For this reason how the charges are being split when it comes to fixed costs for being attached to the grid v.s. power consumed hasn't been all that important: the utility has been making sure to get paid for their costs + overhead, and have been in a legally protected monopoly position to do so (often without a competing grid alternative and with a legal right to demand a certain percentage of overhead without any pressure to reduce their own cost or to be competitive).
- When a customer stays connected to the grid but install rooftop solar this customer is basically using the grid as their backup battery and as their peak supply.
- As long as the utility is charging "correctly" with regard to fixed charges for being connected to the grid in the first place and for peak power I fail to see how it is a problem that the customer is generating their own power.
- If the utility is hurting over lost business they need to either lower prices to stay competitive, thus dissuading people from installing solar OR
- fix their pricing models to better reflect their costs (in effect often raising fixed fees and peak power costs).
The problem for the utility is that the can likely not lower prices to be more competitive (rooftop solar will soon most places be the absolutely cheapest option) because they will in this case operate at a loss. If they increase prices, to recoup for lost sales, they give people even more incentive to acquire rooftop solar, thus effectively ruining their own business.
So in conclusion: the utilities are screwed either way.

 

[Foghat]

Here's an example: If support is $100/hour and utility is charging you extra 1c per kWh (to recover the cost) and you use 500kWh per month you can call them every 20 months, 100kWh - every 100 months, 50kWh - every 200 months. At some point your usage is not paying for the services provided.

So the consumer is at fault here? If you bought a 100 lollipops one year and then only one next year, should the lollipop company have the right to demand that I buy 99 more?

 

[eloder]

I think that is an over-simplification. By modifying slightly your usage pattern, moving your higher demand to midday, many people could power a small home off PV and one Powerwall as long as they do not need to run AC at night. Those with large houses would need more than one Powerwall, and many of them could afford such a purchase.

It's largely a matter of modifying your power usage habits. Some people never give a thought to when they turn on their dryer, for example.

By slightly modifying habits, a Nissan Leaf is a fully viable car for over 40% of the entire United States. (Some 85%+ commutes in the US are within the Leaf's winter range, much of the US has access to a plug, and a Leaf is cheaper TCO than just about every gasser out there except for smart cars).

People aren't going to spend tons of extra money for a product that offers little advantage over the status quo, that also requires significant modification of habits. It's just not going to happen. This is only where early adopters, bleeding-edge techies, hardcore environmentalists, and the wealthy live. Solar+grid and solar+grid+tiny backup battery are going to be, by far, the most dominant residential products for a very long time. House batteries need a crap-ton more kwh per dollar than EVs do before your average consumer will even think about it--Tesla+SCTY will have no forseeable advantage for a good 10-20 years, at least, in this area.

 

[Perfectlogic]

- As long as the utility is charging "correctly" with regard to fixed charges for being connected to the grid in the first place and for peak power I fail to see how it is a problem that the customer is generating their own power.

- fix their pricing models to better reflect their costs (in effect often raising fixed fees and peak power costs).

Noone is saying that there would be a problem if the utility charges a fair price to the home with rooftop solar, problem is that they don't make the rules. Net metering in some states is forced upon them, and this system is obviously not fair to the utility as you even acknowledge yourself when you say they are using the grid as their backup battery and peak supply. This of course comes at a cost to the utility but they are paid nothing under current net metering rules in states like CA, their biggest market (wonder why).

You are implying that the residential solar model is cheaper than the utility. If you really think this is the case then outline the 3 part cost structure of residential solar to show how they can beat the utility model of which we know the cost. You can read my post #211 if you don't know about the inherent costs in providing electricity to consumers on demand.

 

[TheTalkingMule]

Did you pay for materials and labor to bring electricity to your house, maintenance, tree pruning etc? How about billing system or technical support department? All that is being paid for through electricity fees therefore person in your example - one who uses electricity below certain amount - is being subsidized by those who use more.

It's depressing to see such logic thrown around in a thread where you would think people know better. The FUD has taken hold and in turn has created an environment where it takes $.67/W of sales effort to fight back through it. What a truly American system we have.

NV Energy is planning to charge a residential solar customer $45 per month plus essentially steal and resell all their excess electricity at peak. Does it costs thousands of dollars a year to maintain one single house's grid connection in the middle of the dessert? That is simply absurd.

Solar behind the meter removes chunks of demand and also adds tons of supply at peak when utilities make all their profit. When that peak profit disappears we are under no obligation to replace it.