TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker or making a Paypal contribution here: paypal.me/SupportTMC

Solar City files for $201 million IPO

Discussion in 'News' started by mitch672, Oct 5, 2012.

  1. Fr23shjive

    Fr23shjive Member

    Joined:
    Sep 20, 2010
    Messages:
    235
    Location:
    Southern California
    Anybody investing in this company? I don't know anything about Solar power or the company but anything that Elon is involved with is a good bet imo.
     
  2. CapitalistOppressor

    CapitalistOppressor Active Member

    Joined:
    Jun 18, 2012
    Messages:
    1,621
    It's an interesting company and might be the smartest "solar" investment around right now. Par for the course when it comes to Elon picking winners.

    But there isn't anything transformative about it, at least insofar as it's not doing anything to fundamentally alter the solar marketplace. It's basically a service company and will do well as long as people are installing solar panels. But it is at the mercy of the panel manufacturers who will actually drive R&D and be on the hook for generating economies of scale.

    It's nice that its insulated from that but I wouldn't compare it to companies like SpaceX or Tesla which are poised to upend major industries. If solar electric generation is upended Solar City will be in a strong position to benefit. But if you bet on Solar City that means you are really betting on the solar industry as a whole.

    A big risk is what happens with China. Here is are articles from today that are interesting and (I think) should inform any investment in solar -

    Glut of Solar Panels Is a New Test for China - NYTimes.com

    China may soon stop handing out cheap solar panels for everyone

    Again, there's nothing "end of the world" about China having problems. In fact it makes me cackle with glee (that's another issue :smile:). I think on balance Solar City is as safe of a "solar" investment as is out there, but I don't see the near term upside as being comparable to Elon's personal babies.
     
  3. Zzzz...

    Zzzz... Member

    Joined:
    Aug 19, 2012
    Messages:
    867
    Location:
    East Asia/Canada
    Here is the filing:
    http://sec.gov/Archives/edgar/data/1408356/000119312512416770/d229977ds1.htm

    Generally looks good, especially grows dynamics. But there are some quirks too, how come "other expenses" grown so dramatically in 2012, exceeding 2009+2010+2011 years combined in just 6 months? Maybe some should have been attributed to cost of goods sold? But basics generally looks good.

    SolarCity is by far biggest residential solar installer in US. And growing very fast. That gives them economy of scale(equipment purchase and distribution, installers workload). And they are in fact generally undercut competitors on price.

    But I do not fully understand their business model and have not took time to read whole document(it might have unswered some of my question). You should probably read it before investing.

    CapitalistOppressor: panel producers are competing for SolarCity and alike orders. I mean Chinese companies are not competing with SolarCity, so it is totally different businesses. SolarCity competitors are another American companies like SunRun, Sungevity, REC Solar and alike. But they are are much smaller (actually SunRun claims they are "the nation's #1 home solar company", but that is bs).
     
  4. woof

    woof Model S #P683 Blue 85 kWh

    Joined:
    Apr 30, 2009
    Messages:
    1,149
    I posted this in the other SolarCity thread, but it bears repeating if you haven't seen it.

    Check out this graph:
    oddity.png

    Which is from this blog post (by a California Solar Company CEO):
    http://runonsun.com/~runons5/blogs/blog1.php/stsolar/csi2012/outliers-oddities-state-of-socal

    The jist of the post is it's quite odd that SolarCity's reported price/watt dropped dramatically just before they filed for the IPO. Perhaps this has some correlation with the "other expenses"?
     
  5. neroden

    neroden Happy Model S Owner

    Joined:
    Apr 25, 2011
    Messages:
    3,583
    Location:
    Ithaca, NY, USA
    I haven't analyzed SolarCity at all. I do know that solar efficiency and price per watt are only going to improve, and they will improve fast.

    At the moment, installation costs are actually a large part of the cost. However, installation is both a labor-intensive operation, and one with few economies of scale. So even though I think solar installer is a growth job category, that doesn't necessarily mean that SolarCity is going to make a lot of money on it. They could end up having to repeatedly cut prices to compete with innumerable local small installers, while being unable to cut labor expenses. Their main advantage would be bulk discounts on equipment purchases. It should be a reliable industry, but I wouldn't expect it to be a huge cash generator.

    - - - Updated - - -

    Remember, Elon's first priority is *NOT* to make money. I wouldn't bet against him, but his top priority is changing the world, and if that doesn't make money -- his reaction will be "oh well"!
     
  6. vfx

    vfx Well-Known Member

    Joined:
    Aug 18, 2006
    Messages:
    14,792
    Location:
    CA CA
    More than installs.

    Solar City owns much of the panles they install on homes.
     
  7. woof

    woof Model S #P683 Blue 85 kWh

    Joined:
    Apr 30, 2009
    Messages:
    1,149
    Much more than installation. They are more like a hedge fund, reaping the Solar Renewable Energy Credits (SRECs) from all the panels they own spread out across the country. In addition to that they get the 30% Fed tax credit + whatever the state adds. These they package up and sell. Notice they only do business in states that have SREC and/or solar incentives.

    It's the financing part that makes SolarCity a different type of company than just a solar installation contractor.
     
  8. vfx

    vfx Well-Known Member

    Joined:
    Aug 18, 2006
    Messages:
    14,792
    Location:
    CA CA

    So when the Goverment cash dries up?
     
  9. Zzzz...

    Zzzz... Member

    Joined:
    Aug 19, 2012
    Messages:
    867
    Location:
    East Asia/Canada
    For residential installs that would mean that price basically doubles. That would have devastating effect on the industry, but wont kill it completely.

    Anyhow, I wont expect incentives to go away before 2016. And even then, most likely incentives will be just partially cut.

    As for SolarCity, they need time to expand to get profitable. They might not get there in time. But what woof is posting, what blog he links implying is more immediate threat to SolarCity business. As much as I hate what they are talking about, and while I would love SolarCity to succeed, I had to admit, that blog do have what looks like a valid point.
     
  10. mitch672

    mitch672 Active Member

    Joined:
    Jul 1, 2012
    Messages:
    1,868
    Location:
    Stoughton, MA
  11. rdunniii

    rdunniii Member

    Joined:
    Jun 27, 2012
    Messages:
    25
    Location:
    San Jose CA
    They are getting tax credits not loans or other government outflows. Just like the $7500 credit for EVs.

    Besides,

    There will be other ways of not paying taxes. Just like GE.
     
  12. ggies07

    ggies07 Active Member

    Joined:
    Nov 8, 2012
    Messages:
    2,263
    Location:
    Ft. Worth, TX
    So this is suppose to happen next week eh? Do you think now that Tesla is using their product for the Superchargers and future business, that this company has a better chance? Wondering if it's worth putting in a little money now......
     
  13. ItsNotAboutTheMoney

    ItsNotAboutTheMoney Active Member

    Joined:
    Jul 12, 2012
    Messages:
    4,503
    Location:
    Maine
    I don't think that'd make that much difference. They won't be installing that many panels and they'll be spread around the country. How many "houses"?

    However, the basic plan for Solar City is a good one, I think, but depends on continued falling panel prices. If I were to invest I'd be in for the long haul, defering some in expectation of a price drop as subsidies and FITs shrink and then forgetting about it for 10 years.

    (I'll have no investment in it, but then, I don't really have investments.)
     
  14. mibaro2

    mibaro2 Member

    Joined:
    Dec 2, 2012
    Messages:
    958
    Location:
    Georgetown, ON
    I think that Tesla will help this company succeed by using Solar City's Superchargers across the country(s). Both of them make a good fit for each other. I would probably invest a little. ( disclaimer: I have no affiliation with Solar City).
     
  15. UMD86

    UMD86 Member

    Joined:
    Oct 20, 2012
    Messages:
    269
    Location:
    USA
    The IPO is Tuesday. There's a glut of solar panels (PV) on the market (thanks to the Chinese) which means they are more affordable than before. SCTY's business model is to finance the installations with their customers so they don't have to pay a huge outlay of cash for the panels and installation. Solar City will own the installation and charge the end user a monthly fee. They also get to keep the Federal and State Gov't tax credits. It could a good long term investment. I believe they are the first "installation" company to go public so there's no real history on their specific industry. I plan to own a few shares and see with happens. Musk is the Chairman and his cousins own the company. They're in expansion mode throughout the US which means they will be burning a lot of cash. One thing for sure is that Elon will not let this company go down. He has too much smarts and pride and will guide this company.
     
  16. DaveT

    DaveT Searcher of green pastures

    Joined:
    Nov 15, 2012
    Messages:
    2,564
    Location:
    San Diego
    For those interested, the SolarCity road show video is posted here: RetailRoadshow .

    It's a really good 30 minute presentation by SolarCity's leadership. The video will likely be taken down after the IPO so I'd suggest watching it while it's still up. Also, I found their S-1 filing helpful to read as well. Long, but helpful.
     
  17. Teslawisher

    Teslawisher Member

    Joined:
    Jan 4, 2012
    Messages:
    320
    Location:
    Peoria, IL
    Probably sounds like a very dumb question... but how do you invest in an IPO? On TDAmeritrade, it shows the SCTY symbol, but you can't click on buy, doesn't show a price, etc. Do I just have to catch it tomorrow to buy? Can't set anything up now to buy tomorrow?
     
  18. DaveT

    DaveT Searcher of green pastures

    Joined:
    Nov 15, 2012
    Messages:
    2,564
    Location:
    San Diego
    At this point, you'll need to wait till it goes on the open market. Typically for IPOs you can get in before it hits market if you have a relationship with one of the brokering banks (ie., this means you're a preferred customer with them).
     
  19. Brian H

    Brian H Banned

    Joined:
    May 11, 2008
    Messages:
    898
    Just to put a dark horse in the race, there's a company called Lawrenceville Plasma Physics which is leveraging a cash-starved private research project to come up with a small DPF fusion generator. In about the footprint of a suburban 1-car garage, it would house a small generator, whose core you could hold in your hand, putting out 5+MW, continuously. It's projected (4-yr?) engineered production cost would be around a nickel a Watt (5-6¢) FOB factory door, and produce power at about 1/20th of that per kWh. I.e., it would undercut the entire market, including solar, by so much they'd be financial roadkill in no time.

    LPPhysics.com if you want to check it out.
     

Share This Page