SolarCity (SCTY)

[electracity]

I like this Chanos guy. The subprime analogy does seem false, but he does get the liability most solarcity customers create by attaching an expensive solar contract to their house.

I didn't see anyone mentioning Brad Buss CFO selling 10,000 @ 48 a couple days ago. While that is not a lot of money for him, it probably contributed to the drop.

 

[Foghat]

Warren Buffet's Utility Will Make Nevadan's Pay More | The Daily Caller

Wow, it's really making sense now with NV Energy and Buffet. They are creating a short fall in energy in order to get a massive new nat gas plant built. They are refusing to buy an already existing plant at lower cost in order to charge rate payers for higher cost new plant. Buffet just did aquire nat gas turbine company for over $20bln so makes sense to do this. (He owns rail company that transports gas/coal/etc. around the country as well.)

If Rooftop solar booms across the state and when solar+storage starts accelerating the advent of aggregation grid services, the requirement of new gas fire plants, peaked or otherwise, will be less necessary over the next 5-10 years. This is absolutely the opposite of Buffett and his investors interests.

roof top solar also puts pressure on buffet's utilities credit ratings. Since they have a guaranteed captive rate base within the legal monopoly system, they get the lowest cost capital on the planet(which is another subsidy in my mind of utility monopoly). If rooftop solar eats into that guaranteed rate base concept, more risk is attached to the big utitliy and thus upward pressure on interest rates. Buffet does not like added risk. Rooftop solar instantly adds risk to his credit ratings.

 

[Foghat]

Nevada reaches cap on net metering; solar fight continues - FOX5 Vegas - KVVU

this video pretty much says it all. I hate to say it, but roof top solar is done in Nevada. The NV Energy proposal is bad, but the actual PUCN staff proposal is even worse. It's as if their own independent NEM study doesn't exist. This is really bad stuff in Nevada.

I'm expecting a lot of lay off announcements from many rooftop solar companies late next week, save only some very slim chance of a reversal of PUCN sentiment between now and Wednesday.

Mind you, Nevada was only a 235MW capped market, but it had potential to be a multi 1000MW market if rooftop had its chance.

The disgusting thing about this is rooftop customers have to be connected to the grid. Even if they wanted, they couldn't remove themselves, so they have to take whatever they get from NV Energy. Secondly, NV Energy made over $719mln in profit last year, up 27% over 2013. They made more profit then then entire Las Vegas Strip! How it is that they say solar is shifting costs and causing NV energy to raise rates is beyond laughable. Extortion actually comes to mind.

im wondering how the tesla gigafactory renewable plan is going to pencil out now? Buffet is also owns electric vehicle manufacturer, BYD... Could he trying to make problems for Tesla here as well? Governor Sandoval is going to have to step up here if he intends to be around much longer.

 

[gene]

On the above articles, there are comments sections that any of you can make your points on.

 

[blakegallagher]

Nevada reaches cap on net metering; solar fight continues - FOX5 Vegas - KVVU

this video pretty much says it all. I hate to say it, but roof top solar is done in Nevada. The NV Energy proposal is bad, but the actual PUCN staff proposal is even worse. It's as if their own independent NEM study doesn't exist. This is really bad stuff in Nevada.

I'm expecting a lot of lay off announcements from many rooftop solar companies late next week, save only some very slim chance of a reversal of PUCN sentiment between now and Wednesday.

Mind you, Nevada was only a 235MW capped market, but it had potential to be a multi 1000MW market if rooftop had its chance.

The disgusting thing about this is rooftop customers have to be connected to the grid. Even if they wanted, they couldn't remove themselves, so they have to take whatever they get from NV Energy. Secondly, NV Energy made over $719mln in profit last year, up 27% over 2013. They made more profit then then entire Las Vegas Strip! How it is that they say solar is shifting costs and causing NV energy to raise rates is beyond laughable. Extortion actually comes to mind.

im wondering how the tesla gigafactory renewable plan is going to pencil out now? Buffet is also owns electric vehicle manufacturer, BYD... Could he trying to make problems for Tesla here as well? Governor Sandoval is going to have to step up here if he intends to be around much longer.

I saw an article that mentioned Solar City has around 1100 employees in Nevada. While not game changing It would be a huge disappointment for them to shut down solar in the state. 2 of their operations centers are also there.

- - - Updated - - -

I like this Chanos guy. The subprime analogy does seem false, but he does get the liability most solarcity customers create by attaching an expensive solar contract to their house.

I didn't see anyone mentioning Brad Buss CFO selling 10,000 @ 48 a couple days ago. While that is not a lot of money for him, it probably contributed to the drop.

I did not like to see Brad selling those shares but was glad to hear Lyndon confirm the business is running ahead full steam in all areas

 

[SBenson]

I saw an article that mentioned Solar City has around 1100 employees in Nevada. While not game changing It would be a huge disappointment for them to shut down solar in the state. 2 of their operations centers are also there.

I'm pretty sure that 1100 includes the call-center/administrative-office in Las Vegas.

Actually SolarCity started installing panels in Nevada only recently in May 2014 - here is the launch blog post.

I vividly remember that around the time, some controversy was already going on against residential solar. Some analyst or reporter asked Lyndon if going into Nevada makes sense for which he said, yes there is risk but the economics are still compelling. Will dig up the stuff when I get a chance.

I would be very surprised if SolarCity will be waiting for a last minute decision to figure out contingency plans. There would be a plan A, plan B, plan C and a plan D.

It's a loss. But I bet it is not monumental. The stock-price way overreacted. I voted with my wallet on Friday and I stand by my decision.

 

[jhm]

Warren Buffet's Utility Will Make Nevadan's Pay More | The Daily Caller

Wow, it's really making sense now with NV Energy and Buffet. They are creating a short fall in energy in order to get a massive new nat gas plant built. They are refusing to buy an already existing plant at lower cost in order to charge rate payers for higher cost new plant. Buffet just did aquire nat gas turbine company for over $20bln so makes sense to do this. (He owns rail company that transports gas/coal/etc. around the country as well.)

If Rooftop solar booms across the state and when solar+storage starts accelerating the advent of aggregation grid services, the requirement of new gas fire plants, peaked or otherwise, will be less necessary over the next 5-10 years. This is absolutely the opposite of Buffett and his investors interests.

roof top solar also puts pressure on buffet's utilities credit ratings. Since they have a guaranteed captive rate base within the legal monopoly system, they get the lowest cost capital on the planet(which is another subsidy in my mind of utility monopoly). If rooftop solar eats into that guaranteed rate base concept, more risk is attached to the big utitliy and thus upward pressure on interest rates. Buffet does not like added risk. Rooftop solar instantly adds risk to his credit ratings.

Wow, this really posses me off. A 10% guaranteed rate of return is outrageous. A 10 year Treasury has a risk free yeild of about 2.1% A government guaranteed rate of return is a virtual license to issue US Treasuries, tax the people, and pocket the difference.

You can also see a significant difference in how utilities and ratepayers value investments in solar differently. A ratepayer is happy to finance rooftop solar at 4% to 6% financing just to get some relief from inflation. But utilities expect to get a 10% rate of return, if not, they raise rates. So SolarCity is really giving ratepayers much better financing, 4.5% to 6%, while the utilities are making investment decisions for the ratepayer at 10% financing.

No wonder the utilities don't want any competition from solar installers. It cuts into their racket.

 

[jhm]

I think SolarCity should continue to install systems in Nevada. They need to frame a marketing campaign around holding the NV Energy monopoly in check. NV will raise rates. Even if net metering has a low feed in tariff, ratepayers will want to protect themselves against an aggressive monopolist. It's time to fan the flames of revolution. Remember that people are willing to spend an extra $1000 or so for backup generators so that they don't feel helpless when the utility fails them. There are plenty of redblooded Nevadans who are ready to give Warren Buffet the middle finger. It's not about saving a couple of bucks, it's about economic liberty.

BTW, demand charges could backfire on NV Energy. Demand charges create an opportunity for Powerwalls to perform peak shaving, which creates much more value than rate arbitrage. Specifically you want the demand charges to be high for this to work. Suppose the demand charge is $8/peakKW/month. A Powerwall can shave 3 kW off the peak, or $24/month, $3000 in 125 months on a battery that can last 180 months. In combination with solar, smart A/C and other household demand management, 5kW or more could be shaved. So long as the combination of demand charges and power rates are set fairly, demand charges create battery arbitrage opportunities. There are limits to how far NV Energy can push rates. Once they exceed the cost of solar and batteries combined, they will face mass defections. In the short run we can hope that NV and the PUC are dumb enough to push through a rate plan that batteries can arb.

By my calculations, I think that SolarCity can add a 7kWh Powerpack to a 6 kW system by adding 0.7 to 1.6 c/kWh to a PPA starting at 13 c/kWh with a 2.2% escalator. The range here depends on whether 1500 or 1400 production hours are expected per years, respectively. For Nevada, I rather suspect that 1500 is more likely. But let's just assumed the customer is offered 13 c/kWh base or 14 c/kWh with Powerwall. The Powerwall option is attractive because in minimizes use of net metering, cuts demand chages, and provides back up. So if NV Energy is aggressive about raising rates 14c/kWh plus 2.2% escalator is not a bad deal at all.

 

[blakegallagher]

I think SolarCity should continue to install systems in Nevada. They need to frame a marketing campaign around holding the NV Energy monopoly in check. NV will raise rates. Even if net metering has a low feed in tariff, ratepayers will want to protect themselves against an aggressive monopolist. It's time to fan the flames of revolution. Remember that people are willing to spend an extra $1000 or so for backup generators so that they don't feel helpless when the utility fails them. There are plenty of redblooded Nevadans who are ready to give Warren Buffet the middle finger. It's not about saving a couple of bucks, it's about economic liberty.

BTW, demand charges could backfire on NV Energy. Demand charges create an opportunity for Powerwalls to perform peak shaving, which creates much more value than rate arbitrage. Specifically you want the demand charges to be high for this to work. Suppose the demand charge is $8/peakKW/month. A Powerwall can shave 3 kW off the peak, or $24/month, $3000 in 125 months on a battery that can last 180 months. In combination with solar, smart A/C and other household demand management, 5kW or more could be shaved. So long as the combination of demand charges and power rates are set fairly, demand charges create battery arbitrage opportunities. There are limits to how far NV Energy can push rates. Once they exceed the cost of solar and batteries combined, they will face mass defections. In the short run we can hope that NV and the PUC are dumb enough to push through a rate plan that batteries can arb.

By my calculations, I think that SolarCity can add a 7kWh Powerpack to a 6 kW system by adding 0.7 to 1.6 c/kWh to a PPA starting at 13 c/kWh with a 2.2% escalator. The range here depends on whether 1500 or 1400 production hours are expected per years, respectively. For Nevada, I rather suspect that 1500 is more likely. But let's just assumed the customer is offered 13 c/kWh base or 14 c/kWh with Powerwall. The Powerwall option is attractive because in minimizes use of net metering, cuts demand chages, and provides back up. So if NV Energy is aggressive about raising rates 14c/kWh plus 2.2% escalator is not a bad deal at all.

I am sure this would/will change but I believe the current law in NV prevents any defections. And I believe in the NV energy plan in some instances people would actually have to pay extra each month if they install solar. I doubt people will pay out of pocket to put solar up if it will actually raise their electric bill. That being said I can not believe these laws will stand if NV energy continues down this war path.

 

[winfield100]

A clarification and comment (if discussed before apologies, there are 200 pages) There is a difference between “grid defection” and “Load defection” grid defection pretty much means a monster PV array to cover maximum usage (and possibly low use generator) and cutting the connection. Load defection seems to mean gradually to radically lowering the amount of electricity purchased. I doubt it is illegal (yet) to lower the amount purchased from a utility so if you generate say 90% of your electricity, storing some of it in batteries (excess) and having what is essentially a “thin client” grid connection with a not quite islanded “micro grid” or a group of folks with a “mini-micro grid”, all with batteries forming a small virtual power plant (VPP). I presently have no problem with nominal grid connection fee. The lines need maintaining. (own SCTY,TSLA, small PV array since 1999) my net metering up till a year ago consisted of my non-racheting meter running backwards)
I would also point out (again) the last 6 years of PV (photovoltaic) consumption in the US and Mexico and Canada. This is in àTerawatt hours. Note the more than doubling every year in the last 4 in the US and also the potential in Mexico and Canada.

	2009	2010	2011	2012	2013	2014
US	0.9	1.2	1.8	4.4	9.1	18.5
Mexico	^	^	^	0.1	0.1	0.1
Canada	0.1	0.1	0.3	0.3	0.5	0.7

- - - Updated - - -

Yes, it is remarkable how Chanos seems to pick up on the same distortions that Electracity was pushing here (and on SeekingAlpha as Rogier). .

I found Rogier's articles on seeking alpha to be moderately incomprehensible. He seems to be a European who is pushing the "Passiv Haus" standard where buildings use 90% less energy by design. where we differ is I am and have been a firm believer in PV since the early 1960's, when they were too damn expensive except for satelites. there are off gridders who have been using then for over 40 years and they just work. they seem to be in the log phase growth curve, finally. (also a shout out for the upcoming movie, "The Martian" and what it will spawn)

 

[Foghat]

Obama coming to Las Vegas for Clean Energy Summit | Las Vegas Review-Journal

President Obama and Senator Reid will both be at the Clean Energy Summit in Las Vegas tomorrow. In the midst of this rooftop solar crisis in Nevada, this could get very interesting. I imagine a lot of roof top workers will be there to protest all that is happening. A lot of sales reps probably since they are selling not a single thing right now.

 

[gene]

Obama coming to Las Vegas for Clean Energy Summit | Las Vegas Review-Journal

President Obama and Senator Reid will both be at the Clean Energy Summit in Las Vegas tomorrow. In the midst of this rooftop solar crisis in Nevada, this could get very interesting. I imagine a lot of roof top workers will be there to protest all that is happening. A lot of sales reps probably since they are selling not a single thing right now.

Geez! The comments at the bottom of the article are, well......nasty stuff! If I ever think to move to Nevada, shoot me, please.

 

[atang]

Obama coming to Las Vegas for Clean Energy Summit | Las Vegas Review-Journal

President Obama and Senator Reid will both be at the Clean Energy Summit in Las Vegas tomorrow. In the midst of this rooftop solar crisis in Nevada, this could get very interesting. I imagine a lot of roof top workers will be there to protest all that is happening. A lot of sales reps probably since they are selling not a single thing right now.

This is also interesting:

Other summit speakers will include Energy Secretary Ernest Moniz; Diarmuid O'Connell, vice president of business development at Tesla Motors; and John Podesta, a former counselor to Obama.

 

[drinkerofkoolaid]

National Clean Energy Summit Tackles Net Metering Debate | Nevada Public Radio

Republican Argument : Clean Energy will hurt oil companies and will convince more people towards the agenda of convincing more people to use Solar. Obama wants oil jobs to disappear. Oh, and climate change isn't a problem, let alone something worth mentioning so why is Obama wasting time and money on an issue that we don't have all the facts on?

Democrat Argument : It is essential that we use more Solar Power, Wind Power, and other methods that will address climate change. Clean Air and a reduction in asthma and cancer deaths is a good thing. Solar jobs are rapidly increasing and pay more than oil jobs. Subsidizing something (oil) that is bad for us (the world) does not make sense. Rather than expecting an omnipotent being to jump in and force us to stop this madness, let's get with reality and do something good for the economy, the air, and the world. Okay?

Footnote: Anyone who thinks we shouldn't reduce the amount of chemicals we are releasing into the atmosphere, or who believes these chemicals are harmless should be forced to spend one day inside of a room (without windows or ventilation) that replicates the air quality of the most polluted cities in the world.

 

[Foghat]

NV Energy fights to keep rooftop solar from cutting into its profit - Monday, May 25, 2015 | 2:01 a.m. - Las Vegas Sun

i keep hearing the press say "no one expected to reach the cap this early." That's a bunch of baloney. Check all the records, the solar industry said the would hit it by summer as the article states. This article states by summer and the legislative video I posted earlier said by September. NV Energy said March 2016 was when the cap was to be hit. The solar industry was spot on in their estimates, NV Energy was grossly wrong on their estimates.

Nevada legislature clearly sided with NV Energy and completely disregarded the solar industry. Not only that, the legislature has allowed NV energy to blatantly lie about their numbers and estimates and then set up the most bias PUC in the nation to have free reign over cutting net metering by potentially 80% while adding unprecedented demand charges never assessed on home solar in utility history. Even governor Sandoval, the person that appoints the commission says he has no control over the PUC, that he's completely hands off on their decisions. This is a massive sham job and it's all on record too, which is absolutely brazen and pretty stupid. This will all come back to haunt them sooner or later.

 

[jhm]

Here's what they've got going on in Australia.
RottnestWindTurbine on Twitter:

 

[MartinAustin]

Amazing rally going on today from that gut-wrenching low. $34 up to $41 in one hour.

 

[Johan]

I'm happy to say that after sitting on the sidelines for way too long I'm back in today as a SCTY stock holder for a substantial amount at $37.

 

[gene]

Amazing rally going on today from that gut-wrenching low. $34 up to $41 in one hour.

Who's Warren Buffet?

 

[jhm]

I'm happy to say that after sitting on the sidelines for way too long I'm back in today as a SCTY stock holder for a substantial amount at $37.

Very nice catch! Best of luck.