SolarCity (SCTY)

[TheTalkingMule]

For being super-complex in the background, PPA is super-simple on the front-end. If you want to own a system you should do it. If that's not your thing you can bundle up all the work effort involved in solar ownership and dump it on a PPA provider for a price premium.

I like to picture my 35-45 year old friends in suburban Philadelphia making solar buying decisions over the next 1-5 years(as many of them will). I can't see half of them ever being interested in buying and maintain an array no matter how simple it becomes. Energy costs are just not a concern for them and the "premium" of still paying less than current cost will logically be where they land.

I really think the full service PPA model will take an even larger majority of installs after we're to scale nationwide. 2 years? 6 years? Who knows. In the mean time I guess I have no problem with SCTY doing installs with simplified loans. Something to help keep the lights on in new markets as we get up to speed.

 

[doggusfluffy]

Greater than the sum: How aggregation is making storage into a software business

A recent IRS notice suggests the 30% federal investment tax credit (ITC) can include the cost of battery storage if it is paired with solar and 75% or more of the battery charging is from the solar.

“That means you can start building financing around tax equity for solar-plus-storage packages,” Hill said. “That is a big growth enabler.”

Energy Bill quagmire:

The odds seem to be leaning slightly against a conference. Democrats haven’t narrowed down their specific demands, given that so much of the House package was subject to White House veto threats, sources told ME. “Right now I would say it’s unlikely that the Democratic members of the energy committee are going to be very comfortable going to conference with the House bill as it currently stands, because it has so many troublesome provisions that you could compromise 70 percent of them away and it still would not be a good bill,” Sen. Angus King told ME, stressing that he was speaking only for himself and wasn’t ready to give up. “We’re trying to get something done. The Senate has passed a good bill. I don’t want to see it die for the lack of discussion, I always think that’s the way to go, but I think right now it’s, as I say, problematic.”

 

[drinkerofkoolaid]

1) I think the problem with the prior breakout was the 100dma being too big of a jump 200dma. If the situation in Arizona hadn't occurred,I think Solar City would have stayed around $24, until the moving averages caught up with the upper BB.

2) The US government won't allow states to kill the residential Solar industry.

3) It's very interesting FBI questioning the APS and a a former member of the ACC about an investigation involving the use of Dark money hasn't received more attention. The story broke less than 24 hours after it was announced that Solar City had ceased attempts to work with the APS after one meeting. Maybe this is because SolarCity knows the APS is about to be subject to major scrutiny? Maybe SolarCity doesn't think it wise to negotiate a deal with people who are who are currently being investigated by the FBI for corruption?
http://www.bizjournals.com/phoenix/...s-former-acc-member-questioned-by-fbi-in.html

4) Once battery storage enters the equation, any debate over net metering will be irrelevant. Individuals will be able to sell power to anyone. In Germany this is already allowed, and possible. In the USA, I believe this is not currently allowed.

 

[drinkerofkoolaid]

Truly amazing. Only 1 post in this thread today.

Here is the news of the day that no-one is paying attention to.

SolarCity, Community HousingWorks, & Everyday Energy Partner To Bring Solar To Affordable Housing

 

[TheTalkingMule]

Nothing that happened today is news from an investment perspective.

 

[drinkerofkoolaid]

I firmly disagree. On top of everything else.

ACC attorney jumps to law firm representing SolarCity, rooftop interests battling APS - Rose Law Group Reporter

 

[doggusfluffy]

FERC revokes market-based rate authority for Berkshire Hathaway companies

In the filing, the new owners said they failed wholesale market share screen, which resulted in a rebuttable presumption of horizontal market power. Having horizontal market power means the seller can manipulate market prices by withholding generation or bidding into markets at excessively high prices.

Add 2nd linky:
Berkshire Market-Based Sales Restricted in 4 Western BAAs

Nevada PUC: Upcoming NEM cost-benefit study ‘won’t win the day’

Furthermore, the E3 study, as coming from an independent source, will have more credibility than a study being commissioned by the industry itself. “The PUC though, under the Administrative Procedures Act, can only rely upon evidence that is gathered in a contested proceeding where that evidence is scrutinised and subject to cross examination. So that study can be presented as some of the evidence, but on its own it’s not going to win the day necessarily,” said the spokesperson.

 

[TheTalkingMule]

It amazes me that people value operations like NV Energy to the tune of tens of billions and throw around the possibility of SCTY going to zero. I mean, which company is on the wrong side of the tidal wave?

How anyone can possibly believe these profits will be there in 2 years is beyond me. NV Energy made $750M last year and will be far closer to zero for 2017. All it takes is a regulatory environment that is marginally fair, state OR federal.

We keep seeing these operations getting scooped up left and right for high premiums as if the entire populace is going to happily bend over forever. Am I nuts here?

 

[ggies07]

Greater than the sum: How aggregation is making storage into a software business

Thanks for the link. I like this part right here. It explains why I think SolarCity is still going to be the winner and leader of this transition.

“Policymakers fail to see this," Ko said. "‘Behind-the-meter’ is not even an accurate characterization because aggregated smaller-scale storage can provide the same services that utility-scale storage can provide.”

 

[drinkerofkoolaid]

Okay. When journalists overstate Lyndon Rive's salary by around $77 million, and these are the two top stories on Twitter, I'm convinced the stock won't go much lower.

The San Francisco Business Times Got My Salary Wrong, But Only By $77 Million

 

[TheTalkingMule]

I know we're not supposed to push politics into this thread if it can be avoided, but I think we're looking at a very crucial 6 month period for SCTY and a lot of it hinges on political winds.

The Senate energy bill is still floating in limbo with lots of fossil interests pushing for less EPA regulation, etc. A Hillary cakewalk is looking more and more likely with the possibility of a Trump nomination also keeping loads of mainstream Republicans at home on election day. There is serious talk of the GOP losing hold of both houses of Congress. I don't think that's the most likely scenario and I don't want to discuss it's likelihood here, I just want to point out that what was once unthinkable is now a possibility.

With the probability of losing the Senate, having to deal with a Clinton WH and having less than a stranglehold on the House, GOP fossil interests are in a situation where it's in their interest to "overpay" for passage of this bill ASAP. To me that is bigger than any day-to-day market issues that SCTY might have since Congress could likely end these state-by-state net metering battles with simple federal legislation. Pushing more of the state-level conversation back to the feds means it's game over and all the uncertainty around residential solar payback periods is wiped out in one shot.

Considering the boatload of concessions the "green" folks got when oil exports we're legislated, I think we can fairly expect something of that magnitude to come down the pike if this energy bill every gets through the House AND the stamp of approval from Obama. What that would look like specifically is above my knowledge of the utility world, but I think it's easy enough to see a path where someone like NV Energy would no longer be able dictate the energy supply at wholesale. Whatever form that rule takes would likely be obviously fair and very palatable to all but the utility interests. It would also be an easily proved net cost saver.

I had hoped SCTY would have sales cost down to maybe $.45/W by this summer, but we're still at double that due to the whole Nevada debacle. I think legislation that enhances federal power to protect residential solar to any degree effectively has the same impact. Sale costs are only high because of the unreasonable amount of power we give utilities in their own marketplaces. If I see a good bill get passed that curtails this power, that's the same as seeing $.30/W sales costs because that's certainly where it'll be before long.

Just my opinion, not investment advice. Installs should be growing faster than guidance, the rules are being rewritten as we speak. This is a huge 6 months for SCTY.

 

[doggusfluffy]

COMMERCE CRANKS UP DUTY ON CHINESE SOLAR CELLS: The Commerce Department increased its duty on Chinese solar cells, cheering U.S. manufacturers. As Pro Trade's Victoria Guida reports, the tariff applies differently to different companies, but Chinese manufacturer Yingli will see its duty rise to 12.19 percent from 11.47 percent, and Trina Solar's rate will go to 6.12 percent, up from 4.53 percent.

Virtual Power Plants Get Around Solar Power’s Intermittency Problem

And Lee Keshishian, SolarCity’s vice president of operations for the East Coast, says the company (which began operating in Philadelphia a couple of years ago) is now doing 100 or more installations monthly in Pennsylvania. SolarCity hopes to start its first installations here in “weeks,” Keshishian told CP last week.

 

[drinkerofkoolaid]

If New York had further delayed the payment, SolarCity would have found a way to obtain the necessary cash. It's helpful to have a number of billionaire execs who care about their customers and would step in if necessary.

New York would have likely had to pay a penalty for any delay. New York, NOT SolarCity would have been 100% responsible for the delay. Anyone more familiar with this care to shed some light on this?

Although not a perfect analogy, the example of the close call of a US government shut down comes to mind. If workers had been laid off, or simply told to not show up as a result of a delay in agreeing on a budget, I'm fairly sure all of those workers would be entitled to back pay for lost income they would have received once a budget was agreed on.

It would be great if more people were involved in this thread. TMC mods, just a suggestion, but something should be done to try and get more people talking about the Solar industry. It's not beneficial for anyone if there are only 3 or 4 people on TMC who discuss the facts about developments at SolarCity.

 

[replicant]

@drinkerofkoolaid FYI I'm reading every post in this thread and I'd like to participate in the discussion but I consider the SCTY company and business too complex to add anything meaningful (too much financials for me). I also don't know where to get some good information about the state of solar in the US, except greentechmedia.com.

Perhaps a good starting point would be to move this thread in a new "Solarcity" subforum, in the the General Forums (next to the existing SpaceX). Or in the Energy, Environment, and Policy. Then, we could have various thread to cover short-term stuff, competition, etc. We could also make a list of reliable sources about solar tech, residential demand, supply, competition, politics... @jhm is doing a great coverage of oil-related news in a TSLA thread but he frequently talks about the impact of oil and gaz on solar energy. Outside of TMC, I've recently noticed some solar-tagged posts on electrek.co (a great blog to follow Tesla, by @FredLambert).

In a nutshell, it would be help to re-organize all the energy topics (!= transportation) in one place on TMC, and help other members understand the business.

 

[ggr]

Historically, there was opposition to even having a SCTY thread, let alone a whole sub-forum. I'm not going to get into that one.

I confess that I just don't understand what the market thinks about SCTY and solar stocks in general. Yes, the oil glut hurt, but it shouldn't have hurt the industry that much, since oil isn't directly used for very much electricity generation. The problem seems to be that the oil carries natural gas with it, and that is used. But still, we know we have to get off that too. Anyway, I'm fairly heavily invested in Solar, and all of those investments are in the red.

I do see SCTY as more of a financial engine than actually a straight solar energy play.

 

[neroden]

so perhaps owned panels add to the house what a percentage of what a new replacement cost would be. But leased panels subtract from the house what the outstanding purchase price is.
Solar can raise home values — if you own the system

If you look at those numbers, the difference in home value between "owned" and "leased" is between 7% and 14% of the value of the home before buying/leasing solar panels. That's a lot.

 

[neroden]

I confess that I just don't understand what the market thinks about SCTY and solar stocks in general.

There's a lot of skepticism about *particular* solar stocks. Even among those of us who are absolutely certain that solar is going to take over the world energy market (and I am quite certain of that), it's very hard to tell *which* solar companies will survive -- the market leaders in 10 years might be companies which are currently privately held. It's an ultra-competitive market. This may partly account for the persistent weakness in solar stocks, even when news is good for the industry as a whole.

 

[neroden]

FERC revokes market-based rate authority for Berkshire Hathaway companies


Add 2nd linky:
Berkshire Market-Based Sales Restricted in 4 Western BAAs

Nevada PUC: Upcoming NEM cost-benefit study ‘won’t win the day’

This is fascinating news. It's interesting that FERC has actual standards for whether a market is a real competitive market or controlled by a monopoly, and BH Energy has just fallen on the wrong side of the standards in several more regions.

 

[Yonki]

In case anyone is interested (and hasn't already seen it), I'm tracking SCTY's short interest rates at Fidelity in the Tracking short interest thread. I update when there's been a rate change, so if you don't see any new posts for a while, you should take it to mean that the rates are unchanged. (Or maybe I died.)

 

[doggusfluffy]

FACT SHEET: Obama Administration Announces Federal and Private Sector Actions on Scaling Renewable Energy and Storage with Smart Markets

The Administration is announcing new executive actions and 33 state and private sector commitments that will accelerate the grid integration of renewable energy and storage. Together, these announcements are expected to result in at least 1.3 gigawatts of additional storage procurement or deployment in the next five years.

Are Clinton's solar goals feasible?

Thus, achieving the solar target will depend on a series of initiatives that are only vaguely described in the Vision fact sheet. These include competitive grants to states; a Solar X-Prize for communities that foster rooftop solar; deployment of solar on public lands and federal buildings; and increased investment in clean energy research and development, including the Department of Energy's ARPA-E (Advanced Research Projects Agency-Energy) program. The scope and cost of these initiatives remain to be determined.