-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
- Status
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Seemed like a giant sell order + stops being triggered to me. 400k volume in 2 minutes coinciding with a ~$1.50 drop. That's huge for a $24 stock.
Ok, so with resorts/casinos leaving this means they'll pay what exactly? And who exactly? Will they employ more people to oversee these processes as well as have to maintain their connectivity? While I thought I followed NV closely, I didn't realize this move was possible. Are there other big businesses that manage themselves on the open wholesale market in NV? Are there case studies available to read?
I find this move fascinating and have a great many more questions like
What is the pie chart of available energy look like in NV? What % from NV energy, wholesale and others?
How much is the typical price paid for wholesale on a daily, weekly, monthly, quarterly or base load basis?
Is the wholesale market typically "greener" or is a very green and does it depend on who or when you buy the load?
Again, very fascinating and I'll be looking for articles today to help answer some of these questions.
doggusfluffy
Closed
Last edited:
TheTalkingMule
Distributed Energy Enthusiast
Fairly obvious that these will be the conclusions of any logical study done on residential rooftop solar in the southwest markets. So the question is......
Does SCTY push for more than net metering as part of it's arbitration hearing with the Arizona PUC?
If we all know net metering is more than fair in these markets and we all know that the Arizona PUC will come to the table with a position that is wildly unfair, why not bring to the table a net metering +.01% option out of principle? SCTY should easily be able to prove their option has greater benefit at less total cost.
Things are progressing nicely.
Does SCTY push for more than net metering as part of it's arbitration hearing with the Arizona PUC?
If we all know net metering is more than fair in these markets and we all know that the Arizona PUC will come to the table with a position that is wildly unfair, why not bring to the table a net metering +.01% option out of principle? SCTY should easily be able to prove their option has greater benefit at less total cost.
Things are progressing nicely.
jhm
Well-Known Member
I think it is more like a parent who overreacts to a teenager who is just starting to express a little independence. The parent is threatened by the child's desire for independence, viewing it as rebellion, and escalates conflict. The paternalism of utilities can be overbearing and downright condescending. Utilities generally do not treat industrial customers this way and should not treat residential customers that way either. So the advantage that SolarCity has is that it can approach residential customers as adults and offer a spectrum of alternatives.
We have a perennial debate here about PPAs, but I think that PPAs strikes a balance between ruggedly independent do-it-yourself off-grid solar and father-knows-best utility power. The key issue along that spectrum is the primacy of customer choice. Many customer will value the convenience and simplicity of utility power. Just pay your bill and the power company will handle everything else. And many customers are willing to pay a premium for that level of service. Another segment wants much more independence and does not trust the patronizing advances of utilities, but one has to work much harder for that sort of independence and the financial advantages that come with it. So in the middle, there is a segment that wants a little independence and savings, but also convenience and service. I think this is middle market that SolarCity excels with. I think the problem we have in discussing this as investors is that our personal biases pull us to either extreme of fiercely independent solar or the utility knows best. In my view, both poles are valid and will remain forever attractive to certain segments. What is harder for some to accept is that consumers will ultimately decide, and there is enormous value in a balanced business model that caters to a middle market.
From either pole, one can try to deconstruct this middle ground, and plenty on this list have tried. But offering a well rounded bundle of product, pricing, service, and financing is a winning strategy in just about every consumer category. If you pick apart the components, you miss the value of a well rounded package. You want the best product? Hire a high-end contractor to build out the system as you exactly specify with the best components. You want the best pricing? Hire a cheap contractor who pinches pennies on everything. You want the best service? Just keep paying your power bill and let the utility handle everything. You want the best financing? Just use all that cash you have just sitting around, or refinance your mortgage. All these are valid objectives with valid solutions. But if you want a quality system, a little savings, with responsive service and convenient, flexible financing options, then SolarCity puts all these pieces together for you with a name that can be trusted. This is really the essence of retailing. Most consumers opt for the middle market solutions that balance a whole lot of competing objectives, capably handle the details, and minimize complexity for the customer. It's about delivering the whole package.
Think about that the next time you go to restaurant. Most of the time we are looking for restaurant that has a good combination of good food and ambiance, good service, low prices and convenience of location and to pay with the means of our choice. Sometimes we are willing to put up with lousy service for really good food, or modest fare for really low prices, etc., but most of the time we are looking for a satisfying combination of all those elements. This is called the customer value proposition. And multiple retailers are able to sustainably compete within the same markets by delivering different, but compelling, customer value propositions. Starbucks has not put independent cafes out of business, nor have independent cafes pushed Starbucks out of business. Rather each café delivers on a different customer value proposition.
So SolarCity is a retailer, and they are delivering on a customer value proposition that is winning a third of the residential solar market. For all the nitpicking we can do, that is a damn good position for any retailer to be in. It's all about customer choice, and SolarCity is serving it up. No matter where the technology goes, somebody will need to bundle it into a compelling package, and this is what SolarCity as a retailer does.
jhm
Well-Known Member
Wow, this is a total slam on PUCN for rushing to judgment without a complete analysis and NVE for lacking a "modern planning process." It's great that this is peer reviewed.
I think the larger stakes here for SolarCity is to sell grid services both to regulatory bodies and utilities and grid operators. So they may be making an example of Nevada as some backward state where the PUC and utilities are clueless. But they still have grid services to sell, even in Nevada. So they need to be careful not to upset key players.
The deeper question is not about the proper use of a spreadsheet from the PUCN. I suspect that many assumptions in this model fail to capture the full range of benefits that SolarCity could deliver if utilities were properly motivated to leverage these benefits. That is, there is a difference between accommodating DERs within the existing grid status quo and redesigning the grid to optimize the value of DERs. The grid contains many legacy assets that may well be worth maintaining and even extending, but would no longer be worth building out new in light of DER alternatives. For example, a 10 mile line connecting a small community to the grid may well be worth maintaining. But if that line did not already exist, it would be far better to set up an off-grid microgrid to serve the community at lower capex and opex cost and with higher reliability. So the DERs in the that microgrid avoid some really substantial system costs, but if the line already exists, it may be cheaper to maintain than to replace with a microgrid solution. So in the one case, DERs have very high value, but in the other case the marginal value is more limited. I suspect that the PUCN spreadsheet model is far too simplistic to capture this sort of distinction, and this is why one needs a modern planning process. Should that 10-mile power line need a costly repair, say after a natural disaster, it may be cheaper to replace it with a microgrid, but you want a modern planning process that can make that determination precisely and quickly.
jhm
Well-Known Member
http://www.solarcity.com/sites/default/files/SolarCity-Distributed_Energy_Resources_in_Nevada.pdf
I would encourage all investors to read this report. Section III is particularly helpful. Note that there is even a discussion of the distributed versus utility-scale solar debate that is particularly helpful. I will go ahead and quote this. SolarCity is clearly staking a position that both are needed and offer different benefits to the grid. It is particularly important to understand that small scale solutions derisk the planning process, speed deployment, minimize capital requirements and reduce the risk of stranded assets. This infrastructural flexibility seems prudent at a time of such great transition in the energy markets.
I would encourage all investors to read this report. Section III is particularly helpful. Note that there is even a discussion of the distributed versus utility-scale solar debate that is particularly helpful. I will go ahead and quote this. SolarCity is clearly staking a position that both are needed and offer different benefits to the grid. It is particularly important to understand that small scale solutions derisk the planning process, speed deployment, minimize capital requirements and reduce the risk of stranded assets. This infrastructural flexibility seems prudent at a time of such great transition in the energy markets.
dandurston
Member
jhm
Well-Known Member
I think this report also reveals a lot about SolarCity's strategy. They are obviously thinking a lot about how their installations create grid value. This is obviously helpful defensively to avoid policy problems, but also it opens up incremental revenue opportunities.
I liked the bit on voltage regulation in distribution. The utilities have to up the voltage a bit to make sure that recipients at the end of the line get high enough voltage, but smart inverters are able make these voltage adjustments along the line and are dispatchable. This gives the operator the ability to assure proper voltage all along the line without having to boost voltage at the beginning of the line. So it saves energy and improves power quality for all customers. This alone created a 0.9 c/kWh benefit even without batteries, but adding batteries improves this as well.
There was also some discussion of using batteries to minimize peak load on transformers so as to reduce degradation of the asset. I think this leads to SolarCity offering a kind of peak shaving service. Batteries that are behind a given transformer could be aggregated to shave peak load off the transformer. This would generally provide power at times of system wide peak load, but it would do so in a way that has specific local benefit to distribution hardware and in aggregate benefit to transmission hardware as well. So as an alternative to peaking power plants, this sort of approach would reduce T&D costs in addition to providing power.
I suspect this sort of setup also shows how utility solar and distributed solar can work together. The lowest net demand will be in the late morning (8-12 AM). At this time, homes with rooftop solar and batters could be sending all their own solar into batteries for use in the evening (5-10 PM). But the home would actually run on utility solar in the morning, while it is storing its own local solar. This takes advantage of not needing to invert local DC solar to store in batteries. Then in the afternoon (12-5 PM), the home runs on a combination of utility solar and local solar, perhaps storing a little more. This may seem a little strange from the viewpoint of a single home, but for the system as a whole what it is doing is optimizing the rooftop solar + battery system to function as a peak power plant for the neighborhood and optimizing the T&D costs at the same time. So this is creating much more value to the grid than what a centralized gas peaker could ever do, as such a plant only strains T&D resources when used in stead of alleviating them.
dandurston
Member
Nice to see the stock has indeed rebounded off the post ER low (+40% in 2 weeks), presumably from shorts taking profit and value buyers jumping in since the actual news has been pretty minor. I'm reducing back to my core holdings.
I suspect we're going to sit in the $22-$26 range now until we get some substantial news of some type. Given the negativity priced into the stock, I think it's more likely to be positive news.
A whole 129 people viewed the panel SolarCity streamed. What gives? Nevada PUC concedes Solar City was right about everything and that existing customers should be grandfathered into the existing system based on the new data! This video should have 10,000 + views!
SolarCity TV
SolarCity TV
Last edited:
dandurston
Member
Can you provide a bit more detail on the video? Was the PUC really there and agreed?
The video is probably great but it's over 2 hours long and most people - myself included - don't have time for that, which probably explains the view count (now up to 163).
The video is probably great but it's over 2 hours long and most people - myself included - don't have time for that, which probably explains the view count (now up to 163).
I'm at a loss for words. You don't have the time to watch it and you want me to summarize everything for you? I guess this explains why most analysts aren't bothering to comment in detail on recent developments.
SCTY's report http://www.solarcity.com/sites/default/files/SolarCity-Distributed_Energy_Resources_in_Nevada.pdf reminds me of another piece of fantasy Comparative Environmental Life Cycle Assessment of Conventional and Electric Vehicles - Hawkins - 2012 - Journal of Industrial Ecology - Wiley Online Library
even a brief cursory view of their methodology would result in extremely generous valuations for the value of utility solar as well.
there is a simple 'sanity check' that easily comes to those in jurisdictions without an integrated electricity monopoly, what would an energy retailer pay for this electricity? Unfortunately for SCTY or NVenergy, its the type question whose answers doesn't match their business plans.
even a brief cursory view of their methodology would result in extremely generous valuations for the value of utility solar as well.
there is a simple 'sanity check' that easily comes to those in jurisdictions without an integrated electricity monopoly, what would an energy retailer pay for this electricity? Unfortunately for SCTY or NVenergy, its the type question whose answers doesn't match their business plans.
I value renewable energy from an environmental perspective. Acting to better the environment is a fine example to my family, friends and neighbors. This has real measurable value to me.
Companies like Apple, Walmart, Costco, and Google the (list goes on and on) place value in branding themselves as green environmentally sound organizations.
Individuals and companies have a right to act environmentally responsible. Utility regulatory agencies have a responsibility to act for the greater good.
TheTalkingMule
Distributed Energy Enthusiast
Solar in the desert is simply cheaper than forms of production involving a turbine. End of story. The fact that casinos are willing to pay $100M+ to disconnect from NVEnergy clearly illustrates that. All customers benefit when total costs go down.
If consumers want to meet their own power needs with solar, the utility as a regulated monopoly is required(within reason) to adapt to that dynamic. Sabotaging competition is not an option.
If consumers want to meet their own power needs with solar, the utility as a regulated monopoly is required(within reason) to adapt to that dynamic. Sabotaging competition is not an option.
- Status
Similar threads
