SolarCity (SCTY)

[doggusfluffy]

Senate reaches deal on long-stalled energy bill

The move could allow for the energy bill to be back on the Senate floor as soon as next week, though the exact timing is up to McConnell and Minority Leader Harry Reid (Nev.).

 

[dakh]

If news from the Senate move the stock tomorrow that would be a good indicator that it'll move more if the bill passes.

 

[Jack6591]

Regarding letter writing - I was trying to state that politicians do not want to be told which company is doing what and also which will "put the final nail in the coffin" of certain industries. Their own people/constituents and even family members may be employed there. Rather, look at ways to say that the new industries offer a far better long-term alternative for humanity.

Do I write letters now? No. The reason is that they do no good. I've written to my state representative to ask them to vote for certain bills in DC regarding climate initiative. I never keep copies of what I send through the onilne access portals for reps. I have republican federal representatives here and trying to get them to do good in DC for climate cause or renewables is not exactly going to fly. One of our big city democratic legislators who attended and spoke at a plug-in day three years ago has been indicted on related to their alleged roles in a racketeering and influence-peddling conspiracy. I have a power company who cannot even put together a TOU program after spending $500 Million of government funds to deploy smart meters. And when we write to legislators, instead of asking for more incentives, we need to look at what does the most good for everyone.

Education.

Let's get people educated first, guide them to buy the energy-wise, implement laws for community solar and wind "group buys" to allow shared ITC aggregation. If 100 homeowners paid into a 1MW solar PV array farm, at perhaps $2/watt installation, that does more good for the community than 100 homeowners installing 100 10KW solar arrays on their houses at $3/watt. Cost of scale is what we need for the most common good for the best results. With community solar, you also can have centralized management, centralized cleaning services and a far more expedient installation program. Modules installed per hour on a solar farm blows away home rooftops. But since rooftops take up "zero new land" they make some sense in denser populations. We have to decide; do we want an energy program or a jobs program? Are we pumping our favorite stocks or are we building a truly sustainable future in a very cost effective and fair manner? Maybe we should work under a "profit limit" environment like the 8-A government agency set-asides where prices of installation is limited to cost plus a small profit. Where companies cannot over-state the market value of their installed sites to get the most government incentive payback.

I see things differently. The exponential price decline of solar technology will drive individual entrepreneurship. Homeowners and business owners will be able to harness not only the financial benefits of self generation, but the self reliance and stability of long term energy profits. Solar power is the greatest tool ever invented, it can power our homes and businesses and transportation as well. Al Gore was right, the more we use renewable energy the cheaper it becomes. The efficiencies of volume will become manifest in Tesla's Gigafactory and SolarCity's Riverbend plant. Suddenly, EVs and renewable have "cool factor" which is driving growth to the tipping point. Solar will just get cheaper and better looking and everyone is going to want it.

 

[doggusfluffy]

NV Energy-backed group pushes to keep solar rates high

“If the big rooftop solar companies get what they want, it would really hurt low-income families and punish those Nevadans who do not have solar panels,” said spokesperson Nicole Willis-Grimes, who is also the Ferraro Group’s director of public affairs. “It’s patently unfair to require people to pay for something they don’t get a direct benefit from.”

 

[gene]

You guys see Sune this morning? At one time it was up 102%. There must have been at least a lucky few buyers from yesterday.

 

[Yonki]

Charles Schwab went from paying 23% for SCTY shares, to 25% on April 7, to 28% today.

Have you tried to short any SCTY to see what Schwab is charging borrowers? Fidelity is 45% to loan, ~67.5% to borrow. Curious if Schwab has a larger spread or is charging less to short...

 

[jhm]

Shorting Oil, Hedging Tesla

SolarCity investors may want to see my post on optimizing a portfolio of SCTY, TSLA and SCO (double inverse oil ETF).

 

[doggusfluffy]

http://www.nytimes.com/2016/04/14/u...deal-to-act-on-comprehensive-energy-bill.html

The bill is designed to address major changes in the ways that power is produced in the United States by updating the nation’s power grid and oil and gas transportation systems.

I haven't found any mention of the specifics but I'm assuming this contains the NEM rules?

 

[MikeC]

Have you tried to short any SCTY to see what Schwab is charging borrowers? Fidelity is 45% to loan, ~67.5% to borrow. Curious if Schwab has a larger spread or is charging less to short...

It just tells me it's "ineligible to be shorted or shares must be borrowed externally" but if I'm willing to short $50,000 worth and pay a fee, I should contact Securities Lending to determine the fee amount.

 

[TheTalkingMule]

I'm not seeing any chatter about FERC rule revisions in this Senate energy bill that would help lock in grandfathering of solar net metering. Anyone have insight on this?

 

[gigglehertz]

S.2012 - 114th Congress (2015-2016): Energy Policy Modernization Act of 2015

There are 362 amendments. The one in question is 3120, technically an amendment to an amendment. I wonder what fraction of these massive bills ever gets read, let alone seriously discussed, in congress?

S.Amdt.3120 to S.Amdt.2953 to S.2012 - 114th Congress (2015-2016) - Amendment Text

There are several amendments within THIS amendment which to me looks like a poison pill to kill it off entirely. Sen Menchin from WV slipped in language authorizing a staggering amount of money being spent on "clean coal" programs:

"
(1) Authorization of appropriations.--There are
authorized to be appropriated to the Secretary to carry out
this section, to remain available until expended--
``(A) $632,000,000 for each of fiscal years 2017 through
2020; and
``(B) $582,000,000 for fiscal year 2021.
``(2) Allocations.--The amounts made available under
paragraph (1) shall be allocated as follows:
``(A) For activities under the research and development
program component described in subsection (b)(2)(A)--
``(i) $275,000,000 for each of fiscal years 2017 through
2020; and
``(ii) $200,000,000 for fiscal year 2021.
``(B) For activities under the demonstration projects
program component described in subsection (b)(2)(C)--
``(i) $50,000,000 for each of fiscal years 2017 through
2020; and
``(ii) $75,000,000 for fiscal year 2021.
``(C) Subject to paragraph (3), for activities under the large-scale pilot projects program component described in
subsection (b)(2)(B), $285,000,000 for each of fiscal years
2017 through 2021.
``(D) For activities under the net-negative carbon dioxide
emissions projects program component described in subsection
(b)(2)(D), $22,000,000 for each of fiscal years 2017 through
2021."

I like how anything Obama wants to do is "too expensive" and "picking winners and losers" and solar is "cost shifting" but this douchebag can put billions of pork projects that benefit his home state into an amendment and the tea baggers and budget hawks are totally silent.

The more I read through the text the more disgusted I get. I am getting very disillusioned with the democratic process in this country.

 

[doggusfluffy]

My generic take on this Congress is they are willing to give Renewable their equal take, in exchange for whatever their now desperate Fossil Fuel interests latest plan to hang on is. The ITC got done in exchange for lifting the export ban...and they need to make another panic deal in a poisoned Congress. Didn't Obama threaten to veto the House version and the Senate is cooking up the finished product?

Maybe it's just Game of Thrones time of year rolling around...

 

[tander]

TSLA has been at 3% at Schwab for a few weeks at least. You might be thinking of another brokerage.

You mean "surprising" that it is so high compared to the rate for TSLA?

Yeah, I don't know much about that side of shorting but I would have thought tsla and scty would be about the same, but I guess it's probably demand and supply.

 

[replicant]

First Solar Making Panels More Cheaply Than China's Top Supplier

For the first time in three years, First Solar Inc. is making panels for less than China’s biggest producer, justifying more than $3 billion in loan guarantees from the U.S. government.

After investing $775 million in technology, First Solar is producing panels for as little as 40 cents a watt, or about 15 percent less than China’s Trina Solar Ltd. In 2019, First Solar’s module cost could be as low as 25 cents a watt, according to analysts’ models.

First Solar’s investments over the past five years have increased efficiency by almost 50 percent and wrung costs from the manufacturing process. It has two new products coming next year and in 2019, applying lessons learned from the flat-screen television industry: use bigger manufacturing equipment to make larger units at lower cost. Meanwhile, the change indicates the limits of what Chinese companies can do without further investment.

 

[TheTalkingMule]

(Posted in short interest thread)
3/31 short interest numbers are now on the NASDAQ site and are list SCTY at 23.7M, even lower than the last report. How do we reconcile that with the insane rates being paid to short this stock today? Costs to short SCTY have to be near an all-time high, perhaps short interest has ballooned since 3/31?​

I'm trying to figure my plan for the earnings call first week of May. Guidance was revised so low for 1Q16 that I can't imagine they do anything other than outperform considerably, especially given the weather or lack thereof. Will we still get our regular post-call tank? A lot of uncertainty has been cleared up and this energy bill might be nearly the last piece. I'm looking at 2018 $80+ calls and am worried we might run up to $55+ and never get back below.

SBenson, I'd be interested in your 1Q prediction since you've been most accurate for the last three reports. Most of the headwinds we've talked about since October have cleared up or have at least eased to the point of manageability. I think we're nearing a point where the market recognizes all this backend revenue and value as valid. To me it's an 80% certainty to be recognized by the 3Q16 earnings call, but what are the odds for this call? I think 10-15% is fair odds, perhaps 20% since the weather was nice. Thoughts?

 

[SBenson]

Mule, I am flattered that you asked for my opinion. I didn't get a chance to do any sort of deep dive. But my gut sense is still very negative towards SC. The recent financing rounds deal with the near end of the curve. What we really need to see is monetisation of the outer years. More ABS, or ABS of out years, or sale of assets (leases/ppas). We haven't seen any of that except one very small positive deal a few months back. More importantly, they stopped releasing the interest rates on the new credit facilities, which is suspicious. The firm is still very much in survival land is my gut sense.

Separately, just now checked IB rebate rates for shorting. They are north of 107% !!!!

OMFG what is going on here? The only explanation I can think of is that the firm is at a brink of a liquidity crisis and some folks know something inside... Think about it, as SC goes around asking for money (credit), more people will get to see their books, the information leaks and spreads. Otherwise why would anyone possibly pay that kind of rate just on merely speculative bet. They would have to be 100% sure to place a short bet like that.

I'm just merely staying out, watching from sidelines.

 

[electriclife]

Have you guys seen what's happened to SUNE (formerly $30 stock, now $0.35)? I don't think this will happen to SCTY, but solar companies in general need to be careful and not take on too much debt!

 

[ggies07]

Mule, I am flattered that you asked for my opinion. I didn't get a chance to do any sort of deep dive. But my gut sense is still very negative towards SC. The recent financing rounds deal with the near end of the curve. What we really need to see is monetisation of the outer years. More ABS, or ABS of out years, or sale of assets (leases/ppas). We haven't seen any of that except one very small positive deal a few months back. More importantly, they stopped releasing the interest rates on the new credit facilities, which is suspicious. The firm is still very much in survival land is my gut sense.

Separately, just now checked IB rebate rates for shorting. They are north of 107% !!!!

OMFG what is going on here? The only explanation I can think of is that the firm is at a brink of a liquidity crisis and some folks know something inside... Think about it, as SC goes around asking for money (credit), more people will get to see their books, the information leaks and spreads. Otherwise why would anyone possibly pay that kind of rate just on merely speculative bet. They would have to be 100% sure to place a short bet like that.

I'm just merely staying out, watching from sidelines.

So want happens to the solar industry if SC goes under? They are the number 1 installer at the moment......

 

[MikeC]

Mule, I am flattered that you asked for my opinion. I didn't get a chance to do any sort of deep dive. But my gut sense is still very negative towards SC. The recent financing rounds deal with the near end of the curve. What we really need to see is monetisation of the outer years. More ABS, or ABS of out years, or sale of assets (leases/ppas). We haven't seen any of that except one very small positive deal a few months back. More importantly, they stopped releasing the interest rates on the new credit facilities, which is suspicious. The firm is still very much in survival land is my gut sense.

Separately, just now checked IB rebate rates for shorting. They are north of 107% !!!!

OMFG what is going on here? The only explanation I can think of is that the firm is at a brink of a liquidity crisis and some folks know something inside... Think about it, as SC goes around asking for money (credit), more people will get to see their books, the information leaks and spreads. Otherwise why would anyone possibly pay that kind of rate just on merely speculative bet. They would have to be 100% sure to place a short bet like that.

I'm just merely staying out, watching from sidelines.

Well, they were also paying 85% to short TSLA when it was at $30 so you can't just automatically assume people know something based on the short interest.

I would think that if there were any glaring problems with their books, the companies that they opened them for probably wouldn't be agreeing to lend them money after seeing them.

 

[TheTalkingMule]

Mule, I am flattered that you asked for my opinion. I didn't get a chance to do any sort of deep dive. But my gut sense is still very negative towards SC. The recent financing rounds deal with the near end of the curve. What we really need to see is monetisation of the outer years. More ABS, or ABS of out years, or sale of assets (leases/ppas). We haven't seen any of that except one very small positive deal a few months back. More importantly, they stopped releasing the interest rates on the new credit facilities, which is suspicious. The firm is still very much in survival land is my gut sense.

I think they had a tough time in Jan/Feb just like everyone else and decided that not including interest rates was a good idea, which it wasn't. Solar companies are so used to bending the truth that they seem to be having a hard time in a world where solar really truly IS the cheaper option.
I think they're over the hump here, perhaps not in sentiment, but it reality.

SolarCity Financing Concerns 'Alleviating,' Deutsche Bank Says

SolarCity Gains 4%, Deutsche Bank Sees More Tax Equity Transactions Over Next Few Months Boosting Shares

Separately, just now checked IB rebate rates for shorting. They are north of 107% !!!!

OMFG what is going on here? The only explanation I can think of is that the firm is at a brink of a liquidity crisis and some folks know something inside... Think about it, as SC goes around asking for money (credit), more people will get to see their books, the information leaks and spreads. Otherwise why would anyone possibly pay that kind of rate just on merely speculative bet. They would have to be 100% sure to place a short bet like that.

I'm just merely staying out, watching from sidelines.

Keeping in mind this is precisely the setup of TSLA prior to the 2013 squeeze from $30 up to $120+. Shorts see SCTY as an inevitable failure, so they're doubling down....and doubling down.....and doubling down.

My concern isn't so much around IF a run-up will happen it's when. I think we may be underestimating the impact of the lowered guidance from a couple quarters back. 180MW for 1Q would only be 18% yoy growth, by far the lowest ever. Does that seem likely?

If they come in well above 1Q guidance, announce lower 2017 cost guidance AND the Senate all but locks in grandfathering of net metering......anything could happen. That being said, I'm inclined to agree with the negative sentiment. The world just hasn't woken up to SCTY model yet, just like no one bought into TSLA until a certain amount of people actual drove it.

Probably one more quarter of chaos.