SolarCity (SCTY)

[Jack6591]

I'm kind of anticipating the BEARs will attack between now and ER. Just visceral, no data.

 

[TheTalkingMule]

I'm looking for a dip between now and 2Q announcement to grab a chunk of 2018 LEAPs. Absolutely no clue what to expect for a market reaction to next week's call. Just going to sit back and watch long, way out of money call prices for a cheap opportunity.

 

[doggusfluffy]

Buffett vs. Musk: The clash of old and new energy titans

In a survey of 500 utility executives, 65 percent said their utilities should invest more in energy storage. The survey, conducted by the trade publication Utility Dive, said executives believed distributed generation, as a percentage of utility energy portfolios, would increase by about 90 percent in the next 20 years. That could be a boon for firms such as SolarCity and Tesla.

In the coming weeks, SolarCity plans to release a study showing that rooftop solar, when more factors are considered, is a net benefit for all ratepayers.

 

[TheTalkingMule]

DB lowers from the $80s to $62. SCTY down to $29 early going. Nomnomnomnom

 

[drinkerofkoolaid]

Indication that SolarCity beat expectations? SolarCity site exceeds hiring quotas

 

[kenliles]

As a part time resident of WA state, been following this for a while
Shout out to these kids and the supporting law team for a creative approach that is getting some legal traction
Kids In Washington State Were Just Handed A Major Climate Victory - ThinkProgress.org
Judge Sides With Kids Suing The Government Over Climate Inaction: ‘These Kids Can’t Wait’

 

[dandurston]

"Indication that SolarCity beat expectations?"

That headline is a bit misleading. Without reading, one assumes SCTY has hired more workers than required, but this story is actually saying SCTY exceeded the requirements for hiring minorities as a % of the workforce. So it's not saying anything about the size of the workforce, only the demographics of it.

 

[Jack6591]

As a part time resident of WA state, been following this for a while
Shout out to these kids and the supporting law team for a creative approach that is getting some legal traction
Kids In Washington State Were Just Handed A Major Climate Victory - ThinkProgress.org
Judge Sides With Kids Suing The Government Over Climate Inaction: ‘These Kids Can’t Wait’

This should spread to every state in the country. It is a sound legal precedent.

 

[Jack6591]

SolarCity and John Hancock Announce $227 Million Cash Equity Financing

I haven't had time to digest this bit of finance, any comments?

 

[TheTalkingMule]

$3.24 worth of financing for each residential Watt installed sounds pretty good. I wish the SRECs weren't monetized in case their value skyrockets as they likely will in PA.

 

[TheTalkingMule]

And the stock plummets. Borrowing cost?

 

[Lessmog]

Nasdaq is down, oil is down, dollar is down... And it's raining here.

 

[Yonki]

Click here: Save Net Metering
Let’s Give All Californians Access to Rooftop Solar!
Currently, the community you happen to live in determines whether or not you have access to affordable rooftop solar. A bill currently in the state legislature (AB 2339-Irwin/Low) would help solve this by making rooftop solar – and, specifically a critical program called net energy metering- accessible in all communities across the state.

Let’s give millions of Californians real access to rooftop solar—let’s pass AB 2339.

AB 2339 is being considered by the state legislature at a critical time. Many municipal utilities, including Palo Alto, Burbank, Modesto, Imperial and Redding, are threatening to take net energy metering away from their consumers. Net energy metering is the program that makes solar accessible and affordable. Without it, the market dies and along with it the jobs and clean air. Now is not the time to slow down on our commitments to clean energy. Now is not the time to take solar out of the hands of consumers.

The bill is up for vote at the CA State Assembly this week! Send an email to your local assembly member today! Pass AB 2339.

Update from Assemblymember Mark Stone (I bolded the key part):

Thank you for your strong letter of support regarding Assembly Bill 2339 authored by Assemblymembers Irwin and Low. This bill would define the “aggregate customer peak demand” for the purposes of calculating the net energy metering program limit for electric utilities and would dictate the manner of calculating aggregate customer peak demand.

Under AB 2339, some 40 municipal utility-served districts will be able to offer net metering under far more favorable rules. In January, the California Public Utilities Commission voted to protect net metering for consumers living in investor-owned utility territories around central, coastal and southern California. The bill is regarded as a significant continuation to solar progress in the state.

You will be happy to know that with my support and vote, AB 2339 passed out of the Assembly Committee on Utilities & Commerce on April 19th, returned to the Assembly floor and has been referred to the Committee on Appropriations. Regardless of location, California state customers should have more net metering equal access for rooftop solar. This is potentially achievable by evening out the net metering policies across areas which are being serviced by investor-owned utilities and municipal utilities alike.

You can track the progress of this bill and other legislation here: Search Bills


Thank you again for taking the time to write, and please continue to let me know about this or any other state concern.

Sincerely,

Mark Stone
Assemblymember
Twenty Ninth District​

 

[SBenson]

SolarCity and John Hancock Announce $227 Million Cash Equity Financing

I haven't had time to digest this bit of finance, any comments?

I am having a hard time comparing this deal with the latest ABS.

That ABS (based on info from Kroll) was for 35.6 MWs and raised $49.6mln. That's $1.39/Watt.

This Hancock deal on surface appears much worse. It raised $227mln on 201MWs. That's $1.13/Watt. Even worse this includes SRECs...

Having said that, the Hancock deal has a mix of commercial and residential here. While the ABS was pure residential. Ideally we should see residential in isolation. Using a little bit of algebra I am able to tell that 147MWs off of the 201MWs seem to be residential, which is 73%. However, I can't tell what the amount raised for residential alone is on a per-watt basis (that 3.24 is inclusive of cashflows before the deal, that's not what we are looking for). In any case, the commerical was supposed to have same economics as residential, as promised by Lyndon/management, so maybe it's a moot point anyway.

Yet another way to look at it, the new deal allowed for overall cashflows of 3.24/watt residential (including srecs), while the latest ABS generated $3.13/watt (excluding srecs). Does anyone know if the srec value of 11cents/watt is on par with expectations or if it is too low?

 

[doggusfluffy]

It's like a drinking game where you replace "cost shifting", "lining their pockets" and what is "only fair" to the hard working people of Arizona and replace them with a threatened monopoly worried only about protecting their dwindling guaranteed profits....and drink.


Inside the deal that averted a net metering ballot showdown in Arizona

Before the deciding vote, “both sides agreed to withdraw their ballot initiatives and attempt to settle the debate in ten days of talks that will begin as soon as next week,” Mayes said.

There have been no negotiations on substance yet. SolarCity and APS have only agreed on talks moderated by a mutually agreed-on professional negotiator who will be paid by both parties, Mayes said. “Gov. Ducey will be the host and the goal is a framework that preserves solar energy in Arizona and is fair to all parties.”

 

[gene]

If my memory is correct (which it usually isn't) doesn't SCTY ER generally happen before TSLA ER? This time it is flipped with SCTY ER after TSLA. If so, might there be something special in TSLA ER in regard to SCTY? We might have some interesting action the week before SCTY ER.

 

[SBenson]

I am having a hard time comparing this deal with the latest ABS.

That ABS (based on info from Kroll) was for 35.6 MWs and raised $49.6mln. That's $1.39/Watt.

This Hancock deal on surface appears much worse. It raised $227mln on 201MWs. That's $1.13/Watt. Even worse this includes SRECs...

Having said that, the Hancock deal has a mix of commercial and residential here. While the ABS was pure residential. Ideally we should see residential in isolation. Using a little bit of algebra I am able to tell that 147MWs off of the 201MWs seem to be residential, which is 73%. However, I can't tell what the amount raised for residential alone is on a per-watt basis (that 3.24 is inclusive of cashflows before the deal, that's not what we are looking for). In any case, the commerical was supposed to have same economics as residential, as promised by Lyndon/management, so maybe it's a moot point anyway.

Yet another way to look at it, the new deal allowed for overall cashflows of 3.24/watt residential (including srecs), while the latest ABS generated $3.13/watt (excluding srecs). Does anyone know if the srec value of 11cents/watt is on par with expectations or if it is too low?

I should add, the latest ABS was only securitising a portion of the cashflows, while this new Hancock deal sells away almost all of the contracted cashflows. To boot, SolarCity is on the hook to provide all maintenance at it's own cost. This looks like a really bad deal for SolarCity shareholders.

Did solarcity ever provide a figure for Operations & Maintenance (o&m) costs? Looking at last quarter material, I can't find any.

 

[TheTalkingMule]

I am having a hard time comparing this deal with the latest ABS.

That ABS (based on info from Kroll) was for 35.6 MWs and raised $49.6mln. That's $1.39/Watt.

This Hancock deal on surface appears much worse. It raised $227mln on 201MWs. That's $1.13/Watt. Even worse this includes SRECs...

Having said that, the Hancock deal has a mix of commercial and residential here. While the ABS was pure residential. Ideally we should see residential in isolation. Using a little bit of algebra I am able to tell that 147MWs off of the 201MWs seem to be residential, which is 73%. However, I can't tell what the amount raised for residential alone is on a per-watt basis (that 3.24 is inclusive of cashflows before the deal, that's not what we are looking for). In any case, the commerical was supposed to have same economics as residential, as promised by Lyndon/management, so maybe it's a moot point anyway.

Can you expand on this a bit? To me, if they're splitting out the residential and theoretically pulling in $3.24/W on the front end, what is my concern if it's from Hancock, a separate tax exuity offering, state up front incentive, cash prepayments, etc?

 

[TheTalkingMule]

I should add, the latest ABS was only securitising a portion of the cashflows, while this new Hancock deal sells away almost all of the contracted cashflows. To boot, SolarCity is on the hook to provide all maintenance at it's own cost. This looks like a really bad deal for SolarCity shareholders.

Did solarcity ever provide a figure for Operations & Maintenance (o&m) costs? Looking at last quarter material, I can't find any.

I don't see any indication of the portion of payments securitized? How are we comparing that to past ABS offerings?

 

[SBenson]

Can you expand on this a bit? To me, if they're splitting out the residential and theoretically pulling in $3.24/W on the front end, what is my concern if it's from Hancock, a separate tax exuity offering, state up front incentive, cash prepayments, etc?

Yes, that's a more straightforward way of looking at it. Lets look at it closely:

Cash coming in: +$3.24/W
Cost of the system: -$2.71/W (from Q4 slide deck)
O&M: -$0.02/w/year * 20 years (from analyst day presentation) = -$0.40/W

Profit Margin: $0.13/W or 4%

If you were to amortize other left out costs like R&D, CapeX and other hidden stuff. The margin is effectively negative.

So all that is left for the company (as in, shareholders) is a hope and a prayer that homeowners will renew their leases and that is the cash-flow that is left. and nothing else.

Note, all the math above is based on SolarCity's own numbers. They have proven themselves as masters of accounting gimmickry over time. The reality may be much worse.

All this is when much of the developed world is swimming in negative interest rates and there is abundant money in the financial system. Imagine what will happen as rates rise.

It didn't look this bad in the past when ABS deals came out because nobody knew what amount of cashflows are given out. If you look at the chart in slide-10 of Q4 presentation, you see that the debt financing goes down over time. In other words, the out years are not mortgaged out. Also, looking at Kroll report, it seems like only about 13years of cashflows will go out to ABS investors in an amortizing manner. But in this new Hancock deal it appears that ALL of the contracted cashflows go away (and the default risk is taken up by Hancock). I'm no expert at this, we can leave this comparison aside, but the math above is pretty straight forward, all coming from SolarCity directly.