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So true-
'the grid of the future' is photonic from that big Fusion reactor in the sky
Translation- "the utility needs to adapt"- but it won't
TheTalkingMule
Distributed Energy Enthusiast
Exactly. I have yet to see any major vested fossil interest merge into the renewables world in a way that moves them away from the past. Technically the German utilities are now focused on managing the grid and renewables, but they were dragged kicking and screaming and forced into this new dynamic.
NV Energy has proven they will maintain their monopoly position by any means necessary, they are among the least likely to adapt. They will fight this battle to the death and inevitably die.
NV Energy has proven they will maintain their monopoly position by any means necessary, they are among the least likely to adapt. They will fight this battle to the death and inevitably die.
Hot new solar cell
I don't read all posts on this thread, but you might be interested in this development at MIT.
I don't read all posts on this thread, but you might be interested in this development at MIT.
TheTalkingMule
Distributed Energy Enthusiast
You brought up a lot of interesting questions that I will definitely go back and address in time, but this one is my personal focus. SCTY reported $.91 in sales cost for 1Q......which is absurd. They did get stuck with a lot of stranded expense related to pulling out of Nevada, but they must turn the corner on sales within a year or so IMO. Fortunately this is the same burden on normal installers right now as well.
Once sales cost is mostly stripped and solar is up to scale in major markets, it's all over. $2.20/W costs and $2.45/W prices are right around the corner and then each can drop another $.30 from there with the market at full blast. In that scenario it's really all about service preference because the ITC takes another 30% off the top and we're quickly talking about something very affordable.
Once service is the main deciding factor, why would most people not want the SCTY PPA? I'm mean, I'm owning because I'm wildly interested in every facet of the process(and I'm cheap), but most people just want sustainable energy as an ultra-simplified service at a reasonable price.
The entire "self-sufficiency" crowd ("to hell with the grid") will want to own. The non-self-sufficiency crowd who are looking strictly at price will buy utility-scale renewables ("inject it into the grid for me") which will be way cheaper than SolarCity PPAs. That's the scenario I see as most likely.
This would restrict SolarCity PPAs to the remaining "non-deregulated" markets where the utility still controls generation and transmission, and lock them completely out of markets like NY where generation is separated from transmission. The trend is to separate generation from transmission.
Convince me that SolarCity has got a way to compete with buying electricity from the nearby solar farm for the "non-self-sufficiency" crowd. Or that they have a competitive advantage over other installers for the "self-sufficiency" crowd (Zep or Silevo could provide that advantage, but none of their numbers are broken out and I see no way to tell whether they have an advantage.) Because I think if SolarCity ends up restricted to the underegulated markets, their addressable market will shrink every year.
TheTalkingMule
Distributed Energy Enthusiast
I shouldn't have replied today because I don't have the time and your points are very interesting. I will say this for now....
1) People have an inherent desire to be free from the guy on the other side of the meter and a dollar amount can be applied to that desire. Especially if that dollar amount keeps the consumer below existing costs and requires no effort.
2) Today's cost of "utility solar" over point-of-use solar is being accepted as permanent. $1.75 vs $3.25 will not last much longer plus transmission is not free(and grows as a % as install costs drop). When we're at $2/W residential and $1.50/W utility like Germany, I don't see a real cost difference there once tyranny and transmission costs are added in.
Perfectlogic
Member
Actually utility is just above $1/watt, so 1/3rd the cost of residential. I'm sure this small difference will even out in no time though.
I absolutely agree, but SolarCity just subsitutes themselves as the guy on the other side of the meter.
Interesting point. This would be great for retail-scale solar installers, but again, I'm not sure it benefits SolarCity *in particular*.
Skotty
2014 S P85 | 2023 F-150L
Hard to say what time may bring, but around here "utility-scale renewables" is laughable at best. There is no such thing. If there was, I would buy it. But I can't, because it's like a myth. So I'll go solar myself, happily tied to the grid, and a SolarCity PPA would be fine. Am I arguing against what you are saying? Actually, no, because I still won't buy SolarCity PPA because SolarCity doesn't do business in my state. So SolarCity still loses my business.
How can SolarCity get my business? I don't care that much about ROI. I just care about advancing sustainable energy for the benefit of future generations. Can there be no profit from this? Surely they can find a way. Tesla found a way. Tesla has my business.
I'm actually a big fan of SolarCity as a *project*.
But remember: Musk will consider it a success if all cars are electric and Tesla goes bankrupt.
Likewise, Rive will consider it a success if there are solar panels on every rooftop and SolarCity goes bankrupt.
This is something investors have to watch out for! Now, I have very specific reasons to believe that Tesla is not going to go bankrupt, largely due to the utter and total lack of competition. I tried to prove the same about SolarCity, but there *is* competition and lots of it.
But remember: Musk will consider it a success if all cars are electric and Tesla goes bankrupt.
Likewise, Rive will consider it a success if there are solar panels on every rooftop and SolarCity goes bankrupt.
This is something investors have to watch out for! Now, I have very specific reasons to believe that Tesla is not going to go bankrupt, largely due to the utter and total lack of competition. I tried to prove the same about SolarCity, but there *is* competition and lots of it.
drinkerofkoolaid is apparently hacking TMC accounts
There has never been the slightest suggestion by any research organization that the presence of absence of any solar provider affects total solar installs in the slightest. It is a very competitive market. If solarcity was actually differentiated like Tesla it would not be the crap business that it is.
My uncle was a Republican committeeman in Missouri.
I'm surprised women are allowed to be employed outside the home.
Skotty
2014 S P85 | 2023 F-150L
Sometimes I forget this thread is supposed to focus on SolarCity as an investor discussion. A quick touch on that. My philosophy is that investing in a better future is never a bad investment. Moving to sustainable clean energy will lead to a better future. My research for that is called science. I don't care so much about making money. Money is an imaginary construct. It's deemed only to have value because people say it does. The future, however, is very real. Money is a video game. The future is real life. The video game can't exist with out real life to support it. The video game may be all about wealth, but pull away that facade and you find that the advanced technologies we cultivate and the condition of the planet in the future will be what really dictates the wealth of the people.
TheTalkingMule
Distributed Energy Enthusiast
If our main concern is SCTY as the solar leader not making enough profit between now and the point where solar/wind/storage has shifted the entire energy dynamic of the country sustainable.......I think we're going to be OK.
Watch now: Ralston Live | Jon Wellinghoff 5-23-16 | KNPB Channel 5 Video
Looks like potentially regulatory changes coming in Nevada (and other states)soon. Big net metering reports out now and tomorrow demonstrating 11 value adds to the grid from distributed solar customers.
The multiple new peer reviewed data reports showing a significant benefit to the grid with DG.
Solarcity Press conference tomorrow.
Looks like potentially regulatory changes coming in Nevada (and other states)soon. Big net metering reports out now and tomorrow demonstrating 11 value adds to the grid from distributed solar customers.
The multiple new peer reviewed data reports showing a significant benefit to the grid with DG.
Solarcity Press conference tomorrow.
jhm
Well-Known Member
Networks discover that rooftop solar is no longer the enemy
I like to watch energy developments in Australia because I think they are a few years ahead of the US. This is mostly dictated by the larger price gap between grid power and rooftop solar which led to earlier adoption in Australia. But the utilities have followed a similar play book of responses to distributed solar.
First, there is denial. The utilities see rooftop solar as triffling, but are willing to follow some of the regulatory obligations to accommodate customers with solar. This is the time of easy net metering. Then, solar becomes economical and adoption rates soar. Soon it becomes clear that solar is a threat, and the utilities enter the second phase, anger. Here the utilities lash out against solar and try to undermine it's economics with punitive policies and rates. Utilities in Australia tries every trick in the book a few years before the NEM battles in the US.
Now, utilities in Australia seem to be entering the third stage, bargaining. They recognize that the customer is central. This is an intellectual breakthrough for entities thar never really had to think about what customers want. But a prerequisite for being in the business that customers will choose is respecting that the customer choice is real. This prepares utilities to bargain with customers. Their business models are up in the air because they really do not know what bargain can be struck with customers. Moreover, the anger stage really abused alot of customers, especially first movers and the best informed. Will these customers trust anything the utilities tries to offer them?
But at least in Australia utilities are coming to recognize that they need to put customers first and strike a new deal. The question is whether this comes too late. Have the utilities so abused customer trust with ridiculous and punitive policies that these customers can never be won back? I suspect some have indeed gone too far. For example, in the US, I think NV Energy has done permanent damage to their reputation and customer trust. So this sets the utilities up for the fouth stage, depression. Particularly those utility that have destroyed too much customer trust will find it very hard to strike a new bargain with customers. There abused ratepayers will simply prefer to do business with just about any other company. This is, in fact, a key advantage for players like SolarCity. They have a name and track record that customers can trust. But it will be very hard for many utilities to win back basic trust. So customer response will be cool, and attempts to offer what customers really want will underperform expectations. So the utilities may find themselves in a depression. The new opportunities in the market will largely pass them by. What is left is the final stage, acceptance. They utilities will simply come to accept that they will play a much smaller role in meeting customer's electrical needs. Some may even go out of business.
The key lesson here is that utilities really need to be very careful not to lash out against solar in anger. The reputational damage can be deep and irreversible. Even before the bargaining stage utilities need to put customers first and respect the customer's desire to choose. This means every policy change around accomodating solar needs to be evaluated from a customer viewpoint. Adding punitive fees and cutting net metering needs to be framed in such a way that solar customers know that they are valued customers and are being treated fairly. Anything less than that destroys trust and damages reputation. At a minimum utilities need to do focus group research on solar customers before proposing any rate changes. Any sign that customers are simply biding their time until batteries or other technologies become cheaper should be taken as a serious warning sign, because eventually these price barriers will come down. As that happens, all that will be left for the utility is the quality of the customer relationship.
I like to watch energy developments in Australia because I think they are a few years ahead of the US. This is mostly dictated by the larger price gap between grid power and rooftop solar which led to earlier adoption in Australia. But the utilities have followed a similar play book of responses to distributed solar.
First, there is denial. The utilities see rooftop solar as triffling, but are willing to follow some of the regulatory obligations to accommodate customers with solar. This is the time of easy net metering. Then, solar becomes economical and adoption rates soar. Soon it becomes clear that solar is a threat, and the utilities enter the second phase, anger. Here the utilities lash out against solar and try to undermine it's economics with punitive policies and rates. Utilities in Australia tries every trick in the book a few years before the NEM battles in the US.
Now, utilities in Australia seem to be entering the third stage, bargaining. They recognize that the customer is central. This is an intellectual breakthrough for entities thar never really had to think about what customers want. But a prerequisite for being in the business that customers will choose is respecting that the customer choice is real. This prepares utilities to bargain with customers. Their business models are up in the air because they really do not know what bargain can be struck with customers. Moreover, the anger stage really abused alot of customers, especially first movers and the best informed. Will these customers trust anything the utilities tries to offer them?
But at least in Australia utilities are coming to recognize that they need to put customers first and strike a new deal. The question is whether this comes too late. Have the utilities so abused customer trust with ridiculous and punitive policies that these customers can never be won back? I suspect some have indeed gone too far. For example, in the US, I think NV Energy has done permanent damage to their reputation and customer trust. So this sets the utilities up for the fouth stage, depression. Particularly those utility that have destroyed too much customer trust will find it very hard to strike a new bargain with customers. There abused ratepayers will simply prefer to do business with just about any other company. This is, in fact, a key advantage for players like SolarCity. They have a name and track record that customers can trust. But it will be very hard for many utilities to win back basic trust. So customer response will be cool, and attempts to offer what customers really want will underperform expectations. So the utilities may find themselves in a depression. The new opportunities in the market will largely pass them by. What is left is the final stage, acceptance. They utilities will simply come to accept that they will play a much smaller role in meeting customer's electrical needs. Some may even go out of business.
The key lesson here is that utilities really need to be very careful not to lash out against solar in anger. The reputational damage can be deep and irreversible. Even before the bargaining stage utilities need to put customers first and respect the customer's desire to choose. This means every policy change around accomodating solar needs to be evaluated from a customer viewpoint. Adding punitive fees and cutting net metering needs to be framed in such a way that solar customers know that they are valued customers and are being treated fairly. Anything less than that destroys trust and damages reputation. At a minimum utilities need to do focus group research on solar customers before proposing any rate changes. Any sign that customers are simply biding their time until batteries or other technologies become cheaper should be taken as a serious warning sign, because eventually these price barriers will come down. As that happens, all that will be left for the utility is the quality of the customer relationship.
Good write-up- thanks. Part of the antagonistic angry phase comes from an odd paradox. Normally it would just be adding emphasis on customer acquisition and relationship. But in this case the customer suddenly becomes a competitor. A Bridge Too Far perhaps-
In this case, it's literal- 'Power to the People'
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