SolarCity (SCTY)

[jhm]

Latin America Moving Quickly On Renewable Energy | OilPrice.com

Tip of the hat to these Latin American countries that are making the transition to renewable energy look easy. They are saving money doing it. I would expect countries that move ahead like that to grow their economies at a faster rate. Low energy costs are key to enhancing productivity which is what really drives an economy forward.

Note that in the recent auction in Chile solar came in at $65/MWh while coal was at $85/MWh. And this does not even consider the health and medical costs of coal. If I remember this correctly some of the solar included storage.

 

[Foghat]

Gov Brian Sandoval is a climate change denier.

Brian Sandavol is a climate change denier.

Brian Sandavol was legal council for the Utility Shareholders of Nevada. His top advisors are NV Energy lobbyists.

Each of the PUCN commissioners were appointed, and then re-appointed to their posts by none other then one Brian Sandavol. Not elected, but hand picked and appointed. You know what that means? Brian Sandavol gave them their jobs, he hired them.

These same three individuals made the ruling on roof top solar yesterday.

And some out there want to think this was an impartial decision by an "independent body"?

lets get real here...

remember, they love electric cars because that adds new revenue stream to nv energy. They love utiltiy solar because they acquire cheaper whole sale(because of 30% ITC) while maintaining "renewable standards" goals; however they do not reduce retail rates to rate payers... Only roof top does that...

update:
maybe Brian Sandavol is affraid something will be found on a text message or two with his contacts at NV energy... It's funny, the same text message situation is happening in Arizona with a PUC commissioner there. Funny both individuals say roof top solar are "bullying" them. Let's see how this shakes out...
Sandoval’s text messages to NV Energy should be made public, experts say - Thursday, Dec. 10, 2015 | 2 a.m. - Las Vegas Sun Mobile

update2:
NPR interview with Lyndon rive on Nevada PUC decision and Brian Sandavol's unprecedented pre PUC decision press release as well as text messages to nv energy over net metering decision.
Nevada Public Radio

 

[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.

revisted conversation on nv energy/buffet

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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.

more revisited conversation on nv energy/buffet actions

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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.

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Look at the strong interest in fuel cells as well... Buffet's endgame is natural gas for his utility grid system... Every big moves he's making is going in that direction.

He wants everything centralized power. He can control centralized solar and wind because they are just another plant in his mind... Really more of a compliance in my eyes because nat gas will be the base line load as well primary peaker for the grid infrastructure. Still, he has complete control at the utiltiy level solar/wind so he's good with it. But not the case with DG and micro grids.

he loves electric cars. He loves fuel cell electric cars even better. Electric vehicles bring cars onto his grid so he sees massive $$ with supporting and promoting electric cars. He says Tesla is not a threat because he only profits from tesla bringing cars into his grid. The more demand, the more nat gas generators needed to be developed to expand capacity. It's why he is a big supporter of electric charging stations incentives as well.

massive untapped nat gas field near Israel and around the world(also notably in northern Russia now). So, buffers investments in nat gas generator tech will also be procured world wide and at 800mln a pop to develop the capacity, there's tremendous interest in tapping nat gas all over the world for decades to come. And all buffet has to do is switch from coal to nat gas since he has all the required infrastructure in place(vertically integrated ownership top to bottom).

Bottomline, viva la natural gas, down with distributed solar and storage. I think as we move forward, we need to take note of buffet's strategy and understand what his future moves will be. It's not a mystery, it's just being one step ahead on where he's going and how he's going to get there.

he has expressed a disinterest in selling domestic oil as for the reason of limiting oil investment and further guiding policy toward nat gas. He always brings up how precious domestic oil is that it would be like "shipping off the top soil of Iowa" if we were to export it. He's saying let's not develop oil in the United States because nat gas is the future we need all investment going that direction... My direction.

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Its funny when watching the NV legislature video (in may) over the Nevada cap issue, the key proponent of the bill said they picked dec 31 date because the rooftop solar people they would hit the cap BY September and NV Energy said solar would hit the cap by March 2016. She she split the difference and chose dec 31. It is mind boggling how incompetent they are in Nevada. They just decided to split the difference instead of hearing the reasons why solar said BY September they will hit the cap(which has clearly happened). More deviously, NV energy said March 2016, when clearly that was massively way off. That's the fundamental problem of one company controlling the energy business of a state. They can say and do whatever they want and no one can challenge the validity, now they've purposely put local jobs at stake for their unlawful gain. The cap is now set to be hit on Saturday, which I'm betting it will be hit Friday or maybe even today. They are supposed to come up with an interim solution on Friday, so will be a very significant decision in a very real immediate way with significant consequences literally the moment the decision happens. If they continue with the current net metering rate, then solar sales continues as normal right away. If not, immediate layoffs will happen on Friday... You just can't support a sales infrastructure for current growth rates with no sales happening anymore, so the lay offs will come rapid fire. This entire conflict and crisis was manfuctured and supported by the NV legislature and including the Governor for not stepping A LONG time ago. This has antitrust written all over it. Not just that, it also has interstate commerce written all over it. The state of Nevada could see federal funds being frozen and or discontinued as a result in my opinion.

Arizona is now going to start its hearing process. Two of the new commissioners were given $3mln by the utiltiy for their campaigns for election... How perverse is that the utitlity can fund campaigns of the very people that are "elected" to oversee their conduct and protect consumers? Low and behold, both these commissioners voted against the solar supported and logical decision to conduct any rate changes for solar under.... Wait for it... The upcoming rate case review! Arizona has anti trust written all over it just for this reason alone. Ironic that ARizona is supposedly about free markets and free people, but yet is bought and does the bidding of unfree market monopoly that cares only for a few not Arizona's rate payer.

We we ought to see how APS plays this "hearing process." If rooftop solar is able to have an independent study conducted to evaluate the cost/benefit then they will surely win the net metering debate. If the utiltiy is able to control the cost/benefit study then it's a forgone conclusion, solar will be shutdown in he state. TEP has already started intimidating their rate base by sending out messages saying if you go solar, you may not be grandfathered and have to pay the new solar rates of you do(which is absolutely false and untrue). The commission just slapped them on her wrist and said don't do that... This is a clear breach of consumer rights and should have been fined and ordered to message all rate payers on what thy did. But yet nothing. This clearly a hostile environment condoned by he commission, legislature, and governor. Again, antitrust and commerce clause written all over it.

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[Foghat]

NV Energy: We Support Solar, No Solar Jobs Will Be Lost | Nevada Public Radio

2 audio interviews on this page. Both fascinating. Sunrun representative eviscerates the NV energy rep. It is painfully clear buffets position is about to get blown out of the water. If not by the PUC, under federal law of the Sherman act. It will happen.

I can't believe NV energy argues whole sale utiltiy solar is the same as retail roof top solar, so they should pay he same price for net metering. Anyone with a pea brain can see right through that fallacy. There is a whole lot more in the interviews. At one point the nv energy rep says he's just a little old engineer and can't argue as well as the sunrun rep. That says it all....

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Listen to the second audio interview down the page... It doesn't get any better then that.


my goodness ... Nevada state assemblywoman Kirkpatrick sounds like a babbling drunk arguing with Lyndon rive in this following video of nv energy bill covering net metering(scrub to 36:40 minutes from the end of the video):


05/20/15 - Assembly Commerce and Labor (1258) - Room 4100 - May 20th, 2015


Im serious... You tell me if you think she's sober... If so, she doesn't make a lick of sense and is exceedingly hostile(as is the other assemblywoman that attacks and then cuts off Lyndon Rive). She/they are an absolutely is a disgrace to the state of Nevada if this is the way she/they goes about deciding the development of energy policy, complete embarrassment. Especially when she starts talking about selling a pallet of croissants... My mind is thoroughly blown.

This entire thing needs to be settled once and for all on the federal level with serious intent and consideration. Sanity needs to come to the rescue.

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[Jack6591]

Originally Posted by Foghat


I can't believe NV energy argues whole sale utiltiy solar is the same as retail roof top solar, so they should pay he same price for net metering. Anyone with a pea brain can see right through that fallacy. There is a whole lot more in the interviews. At one point the nv energy rep says he's just a little old engineer and can't argue as well as the sunrun rep. That says it all....

Foghat,

i like who grins when he fights. It is time for two things, to start grinning, and start fighting.

 

[SBenson]

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We need to look at the prospectuses for these ABS offerings. I have not been able to find them, just the ones for Solar bonds. If you can find one, let me know.

But looking at the solar bond prospectuses, I note that SolarCity does characterize these as "asset-back" which they are in the sense of cashflow originating from solar assets. But they are "senior unsecured corporate bonds." So there is no collateral, but it is senior to other debt and obligations. Finally,

"SolarCity will be responsible for making all interest and principalpayments on Solar Bonds. We intend to fund interest payments on Solar Bonds with cash payments we receive based on longterm energy contracts for thousands of installed and operating solar energy systems. However, payments on Solar Bonds may be made as necessary from any corporate funds available to SolarCity."

So in the case of Solar Bonds, SolarCity would be in default if they failed to make timely interest and principle payments, regardless of how the solar assets are performing. So the only scenario where the Solar Bondholders is at risk is where SolarCity is defaulting on all junior debt and still cannot make payment. Recent developments Nevada look like a pretty remote trigger for general insolvency.

An ABS is structured difderently. There can be numerous safeguards like traunching and over capitalization to mitigate various risks to investors.There are likely provisions for dealing with nonperforming assets. We need to get our hands on a prospectus to clarify how it is structured.

That makes sense James... I have never seen any prospectus for the ABS. Given that they are all private placements, I assume the prospectus is private as well. I clearly remember S&P note while rating one of the issues. They only talked about the homeowners ability/willingness to pay and regulatory environment was very much listed as one of the risks. I will dig around maybe I can find that.

In any case, even if it wasn’t done in the previous deals, it’s always possible to structure the next round of deals in such a way there are adequate protections for the investors and that should put a lid on the rates. I am all for the firm/shareholders taking the brunt of defaults than tax-equity partners or asset-backed financiers. External financing is the life blood of this company. So long as the system of financing is not ruptured, we can endure any losses and move on. As other have pointed out, Nevada in itself is not a huge market (like CA) that we need to worry about in itself. The issue was repercussions to other things as NV sets precedence. As discussed, I am convinced now management will be able to find ways to contain the damage.

I think the next big potential trigger for a massive squeeze is an ABS pricing/placement announcement. I actually hope two deals happen back to back. One for MyPower and another for the usual lease/PPAs. If these deals come out at 4 to 4.5% coupons. Man, I can only imagine the frantic short covering, as that puts a massive hole in short thesis (that financing costs are higher than ROIs).

Here’s to a massive short squeeze shortly!!

 

[tftf]

Dieselgate, BEV incentives and market penetration.

Germany probably is one of the markets with the most incentives for alternative energy (aside from BEVs, and subsidies for BEVs are still being discussed). There's a reason why German's Sonnenbatterie (now branded Sonnen) was a pioneer in this sector. Sonnen is expanding into the U.S. and other markets...

Germanys Top Residential Battery Company Ramps Up Its US Strategy to Rival Tesla | Greentech Media

Coming back to SCTY, these business models are more of consumer finance operation with a solar installation/service arm attached imho. Just another recent example on the low barriers to entry...

Sungevity Raises Giant $600M Fund From Apollo to Finance Residential Solar | Greentech Media

This looks all about who is able to raise the most money at low rates to somehow finance operations / installations and then hope for a decent payback/ROI within 10-20 years.

I don't see SCTY and rivals like RUN, VSLR or Sungevity primarily as solar companies, but rather sector-specific consumer banks / leasing operations - and therein lies a lot of risk for investors (lots of complex, long-term models and assumptions).

Like traditional consumer banking/lending, the sector has tight regulation attached which can greatly impact these long-term model (the discussed Nevada decision is just the latest example, more to follow...).

 

[SBenson]

I hope people appreciate the detail in the picture I posted just above.

The rebate rate to short SCTY reached 90%

 

[colettimj]

I hope people appreciate the detail in the picture I posted just above.

The rebate rate to short SCTY reached 90%

Isn't trading from now until year end typically low volume? If so, I think that will also hurt shorts as it will be very painful if they try to cover with low volume.

 

[blakegallagher]

I hope people appreciate the detail in the picture I posted just above.

The rebate rate to short SCTY reached 90%

That is amazing, I love hearing Lyndon speak I got goosebumps hearing his emotion about fighting Nevada's terrible decision here with everything they have. And I'm glad a separate solar company is pushing to get the text messages released between Sandoval and NV Energy this whole thing smells dirty and SolarCity will come out clean as a whistle

 

[CaptainKirk]

I hope people appreciate the detail in the picture I posted just above.

The rebate rate to short SCTY reached 90%

I've been trying to figure out exactly this means but I can't wrap my head around the significance. Can you explain to me simply what this means? Is it equivalent to a 90% dividend on an annualized basis the lender of the shares earns?


Thanks in advance.

 

[blakegallagher]

I've been trying to figure out exactly this means but I can't wrap my head around the significance. Can you explain to me simply what this means? Is it equivalent to a 90% dividend on an annualized basis the lender of the shares earns?


Thanks in advance.

It is the fee short sellers must pay to hold shares of solar city short. It varies with the amount of shares available to short but if it stays at this rate(which it won't) it means if you had a million dollars of SolarCity shares that you were selling short it would cost you $900,000 in fees to hold it for the Year

 

[jhm]

This €1 Billion Power Plant May Never Be Switched on - Bloomberg Business

Generator glut, anyone?

 

[SW2Fiddler]

get the text messages released between Sandoval and NV Energy

Call up Leilani. Let's get the texts projected by the Racing Extinction Model S.
(if we can't find the texts, I'll make some up)

 

[gavine]

This €1 Billion Power Plant May Never Be Switched on - Bloomberg Business

Generator glut, anyone?

The video in your link was very well-done. Nothing compelling in terms of information, but still worth a watch. I like the way they mentioned electric cars eventually knocking-out oil

 

[TheTalkingMule]

Should we start a "Cost to Borrow SolarCity Shares for Shorting Hits 90%" thread specifically for shorts commentary? That might be fun.

Reading the Seeking Alpha and other nonsense in the Tesla thread is a good time.

 

[Foghat]

Nevada Bureau of Consumer Protection files for immediate stay on PUCN decision.

Strikes right back at Sandavol and gang...

Nevada agency seeks to block new rates for rooftop-solar customers | Las Vegas Review-Journal

"Further, the Commission's Order does not recognize or acknowledge there could be significant value of a robust roof-top solar program that could negate the need for a $900 million investment (in a) natural gas plant in the near future; a plant that would likely only be needed for a few months out of the year," the filing says.

 

[blakegallagher]

Merry Christmas all! I hope saint nick brings us all a short squeeze of epic proportions.

 

[Jack6591]

Merry Christmas all! I hope saint nick brings us all a short squeeze of epic proportions.

Happy Holidays, my very best to all and all your families.

 

[jhm]

Welcoming the Bright Daystar this Christmas. Wishing you light and energy all year through!