State says SolarCity contractors being paid Wednesday
I can't imagine this would affect price action.
I can't imagine this would affect price action.
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Benzinga - Actionable Trading Ideas, Real Time News, Financial Insight
"The ABS offering has enabled SolarCity to generate $3.10/W of upfront cash flow, including $1.61/W via securitization and $1.50/W via tax equity. This implies an operating margin of $0.40/W, while retaining ownership of the residual cash flows and the customer relationship via future upsell opportunities like storage and home energy management.
Moros also pointed out that the advance rate of 75 percent was the highest for any PPA or lease offering to date. He added that the company’s ability to complete a deal in the tightest financial market conditions is a testament of investor confidence in its asset base."
An analyst who clearly gets it!
"The ABS offering has enabled SolarCity to generate $3.10/W of upfront cash flow, including $1.61/W via securitization and $1.50/W via tax equity. This implies an operating margin of $0.40/W, while retaining ownership of the residual cash flows and the customer relationship via future upsell opportunities like storage and home energy management.
Moros also pointed out that the advance rate of 75 percent was the highest for any PPA or lease offering to date. He added that the company’s ability to complete a deal in the tightest financial market conditions is a testament of investor confidence in its asset base."
An analyst who clearly gets it!
Is Retained Value of $33/share at end of Q3 not deceptive enough for you? If SC can lie about the very core premise of long valuation, why should one trust that management has good intent with what they say?
Sorry if it bothers. I provide clear evidence when I come negative like this. So one should take it up to IR or someone at SC if facts bother.
Nope, there is not one bit of evidence showing that except for the clearly deceptive language formed to deflect the attention from the actual pricing of the deal.
Here is the related SEC filing - there is no indication of TE being part of it what so ever: http://www.sec.gov/Archives/edgar/data/1659428/000119312516452117/d49288dabs15g.htm
Yes, agreed.
If one wants to trust, you still must verify. Especially so with SC given the track record.
TheTalkingMule
Distributed Energy Enthusiast
Hoping this is Radford Small taking control and pushing for as much financing as possible, illustrating more clearly the model's value to the investment/finance world.
Imagine what these press releases will look like when sales cost are down to $.20/W and solar is no longer a fringe product. They'll be printing money and untouchable at 35% marketshare.
Imagine what these press releases will look like when sales cost are down to $.20/W and solar is no longer a fringe product. They'll be printing money and untouchable at 35% marketshare.
jhm
Well-Known Member
Kroll Bond Rating Agency Assigns Preliminary Ratings to SolarCity LMC Series V, LLC, Series 2016-1 | Business Wire
Ok, let's see we can make sense of the numbers in this link. 5645 residential systems with "aggregate discounted solar asset balance (“ADSAB”), consisting of the discounted payments of the leases and PPAs... approximately $76.4 million. The original term of each PPA or lease is 20 years."
The total value of the 5645 systems is the ADSAB plus 30% ITC, about 7c/W in state incentives and renewal term worth about 35c/W. The total value is about $3.62/W. Subtracting off state incentives and renewal term the value available to TE and ABS investors is $3.20/W. So let's divide this into the ADSAB grossed up for ITC, thus $76.4M ÷ 0.70 ÷ 3.20/W = 34.24 MW. Divided by 5645 customers, this is 6.07 kW per customer.
So this all looks quite ordinary, 5645 customers, 34.24 MW, with $3.20/W available for TE and ABS financing. The combined value financing is 34.24 MW × $3.13/W = $107.2M. The ABS is $49.6M leaving $57.6M for TE. Thus, TE contribution is $1.68/W, and ABS $1.45/W.
These numbers all seem reasonable. TE is about $1.7/W and the ABS is about $0.50/W more than the typical $0.95/W as seen last quarter. Boosting the ABS to $1.45/W does not appear problematic because there is more than $3.20/W available from customer cash flows and ITC within the first 20 years of the system. Actually we are underestimating the total tax credits because ITC is based on the whole value of the system not just the first 20 years, and accelerated depreciation yields more tax benefits to the TE investor.
Suppose the full cost is now $2.60/W. On financing SolarCity nets $0.53/W plus $0.07 incentives and another $0.07 or more of unfinanced value in first 20 years. That's $0.53/W on day one, $0.14/W or more within 20 years and $0.35/W in renewal term. This is a net retained value of $1.02/W with the majority of it realized once TE and ABS transactions are complete. Notice that with most of the cash in on day one, it is simply not necessary for investors to be all that concerned with retained value. About $0.60/W of cash shows up in the first year, so if that is sufficient to grow the business, the other $0.40 or so is just gravy. In two decades, shareholders will really like having those renewal terms on the books. Their future value in 20 years will be nominally $1.12/W, but by that point in time investors will be in a much better position to understand the uptake of renewals. In our present day, we are at a great disadvantage even to imagine what home energy services will look like in 20 years. It's a bit like investing in PCs in 1990, trying to figure out what home computing would look like in 2010. Que sera sera. For now, $0.60/W first year cash is a pretty good deal. This is a new business model for SolarCity.
Ok, let's see we can make sense of the numbers in this link. 5645 residential systems with "aggregate discounted solar asset balance (“ADSAB”), consisting of the discounted payments of the leases and PPAs... approximately $76.4 million. The original term of each PPA or lease is 20 years."
The total value of the 5645 systems is the ADSAB plus 30% ITC, about 7c/W in state incentives and renewal term worth about 35c/W. The total value is about $3.62/W. Subtracting off state incentives and renewal term the value available to TE and ABS investors is $3.20/W. So let's divide this into the ADSAB grossed up for ITC, thus $76.4M ÷ 0.70 ÷ 3.20/W = 34.24 MW. Divided by 5645 customers, this is 6.07 kW per customer.
So this all looks quite ordinary, 5645 customers, 34.24 MW, with $3.20/W available for TE and ABS financing. The combined value financing is 34.24 MW × $3.13/W = $107.2M. The ABS is $49.6M leaving $57.6M for TE. Thus, TE contribution is $1.68/W, and ABS $1.45/W.
These numbers all seem reasonable. TE is about $1.7/W and the ABS is about $0.50/W more than the typical $0.95/W as seen last quarter. Boosting the ABS to $1.45/W does not appear problematic because there is more than $3.20/W available from customer cash flows and ITC within the first 20 years of the system. Actually we are underestimating the total tax credits because ITC is based on the whole value of the system not just the first 20 years, and accelerated depreciation yields more tax benefits to the TE investor.
Suppose the full cost is now $2.60/W. On financing SolarCity nets $0.53/W plus $0.07 incentives and another $0.07 or more of unfinanced value in first 20 years. That's $0.53/W on day one, $0.14/W or more within 20 years and $0.35/W in renewal term. This is a net retained value of $1.02/W with the majority of it realized once TE and ABS transactions are complete. Notice that with most of the cash in on day one, it is simply not necessary for investors to be all that concerned with retained value. About $0.60/W of cash shows up in the first year, so if that is sufficient to grow the business, the other $0.40 or so is just gravy. In two decades, shareholders will really like having those renewal terms on the books. Their future value in 20 years will be nominally $1.12/W, but by that point in time investors will be in a much better position to understand the uptake of renewals. In our present day, we are at a great disadvantage even to imagine what home energy services will look like in 20 years. It's a bit like investing in PCs in 1990, trying to figure out what home computing would look like in 2010. Que sera sera. For now, $0.60/W first year cash is a pretty good deal. This is a new business model for SolarCity.
dandurston
Member
So simplistically, if SCTY can install a system for ~$2.70 and turn around and sell the installed system for $3.13 (16% gain) how is this not great and just getting better as costs drop? I don't have a good grasp of all the math and accounting, but it seems like this shows they can be profitable without the dark cloud of worries about renewals, house selling etc. No?
TheTalkingMule
Distributed Energy Enthusiast
dandurston
Member
Oh so they didn't sell the stream of payments? They just used the stream of payments to secure a loan?
Why wouldn't they sell the stream of payments for it's net present value? Because no one wants the risk?
Why wouldn't they sell the stream of payments for it's net present value? Because no one wants the risk?
jhm
Well-Known Member
SolarCity still holds equity interest in the solar system. A big chunk of this is the renewal term, but also they have service and warranty liabilities. So they are only selling a portion of the customer's payment stream. What is being advanced here is just how much of that stream can be monetized. They were doing $0.95/W in an ABS, but now they are experimenting with pushing that out to $1.45/W. As ABS investors become comfortable with that, we may see the yield come down.
jhm
Well-Known Member
Study says rooftop solar good for all utility customers
It is good to note that west facing panels may be worth 6c/W more than south facing. This seems an important dimension for the net metering debate.
It is good to note that west facing panels may be worth 6c/W more than south facing. This seems an important dimension for the net metering debate.
jhm
Well-Known Member
Base load†power: a myth used to defend the fossil fuel industry : Renew Economy
A lot of good stuff in this one. Baseload is bunk. Utilitization of coal plants in China and India is moving to 50% and lower. Coal is now a marginal producer.
A lot of good stuff in this one. Baseload is bunk. Utilitization of coal plants in China and India is moving to 50% and lower. Coal is now a marginal producer.
jhm
Well-Known Member
Australian pro-CCS institute one of many lobby groups hit by Arch Coal bankruptcy : Renew Economy
Ok, on the more political side, the bankruptcy of Arch coal leaves lobbyists as unpaid creditors. Bankruptcy of fossil fuel benefactors is becoming a serious risk to the lobby industry. Thus, a political shift could result from renewables outcompeting fossils in the marketplace.
Ok, on the more political side, the bankruptcy of Arch coal leaves lobbyists as unpaid creditors. Bankruptcy of fossil fuel benefactors is becoming a serious risk to the lobby industry. Thus, a political shift could result from renewables outcompeting fossils in the marketplace.
TheTalkingMule
Distributed Energy Enthusiast
Some car sales info out today reported by CNBC. Leases are now 29% of new car sales up from 25.1% in 4Q last year and 20% five years ago.
A good chunk of people clearly look for simplicity these days and are more interested in the service rather than the product.
A good chunk of people clearly look for simplicity these days and are more interested in the service rather than the product.
TheTalkingMule
Distributed Energy Enthusiast
Krugerrand
Meow
Krugerrand
Meow
Wouldn't surprise me even a little bit. I have a theory and it would be a piece of the puzzle that fits that theory. Nope, not sharing.
doggusfluffy
Closed
jhm
Well-Known Member
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