flankspeed8
Member
Just bought an initial position at $50.50. Has gotten hammered since the last ER. Long haul should be just fine.
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FWIW I think the last results were very bad compared with previous quarters.
Mw booked dropped! to 206. While MW deployed went to 176 meaning the backlog barely rose.
If they cant pull up there sales soon, they will have to stop the acceleration of production.
The 920-1000 MW for 2015 doesnt look like a near certainty from where I'm sitting.
Whats worse is that even when they booked less than in quarter 2 (218 MW) and 3 (230MW) the sales cost kept increasing to more than 75 million now.
At the same time, the increase in retained value is also going down.
In the 2nd quarter this was half a billion! Now its just half that.
I wont comment on what my perceived value is of the stock but since the market didnt like the result of the second quarter, they should hate the last quarter.
If it falls through 47 we could see low thirties fairly fast.
Mw booked dropped! to 206. While MW deployed went to 176 meaning the backlog barely rose.
If they cant pull up there sales soon, they will have to stop the acceleration of production.
The 920-1000 MW for 2015 doesnt look like a near certainty from where I'm sitting.
Whats worse is that even when they booked less than in quarter 2 (218 MW) and 3 (230MW) the sales cost kept increasing to more than 75 million now.
At the same time, the increase in retained value is also going down.
In the 2nd quarter this was half a billion! Now its just half that.
I wont comment on what my perceived value is of the stock but since the market didnt like the result of the second quarter, they should hate the last quarter.
If it falls through 47 we could see low thirties fairly fast.
jhm
Well-Known Member
What's not to like? Gross profit is up 100% from prior year, and GM is 31%, up from 24% prior year. Net loss to shareholders is about the same as last year. So this is truly spectacular growth with solid cost control.
Apparently the sun does not shine as much in Q4 as in Q3. So be very careful about comparing different quarters of the year. All forms of construction and energy are seasonal. Summer is the big money quarter for SolarCity.
Apparently the sun does not shine as much in Q4 as in Q3. So be very careful about comparing different quarters of the year. All forms of construction and energy are seasonal. Summer is the big money quarter for SolarCity.
SolarCity is wasting its money if it thinks this lawsuit will succeed. The idea of using antitrust statutes is clever, but it can only succeed if SolarCity can demonstrate that the rate structure is not supported by costs. Speaking as someone who has testified about rate design at my state commissions, SRP will have no trouble at all defending this rate design as cost-based.
What SolarCity might achieve with this lawsuit is sending a message to other utilities that they will get into a nasty legal battle if they follow SRP's route.
Is it possible to have a solar + storage system that is off grid in addition to a grid connection? Use your solar + storage whenever possible and use the grid when you run out. In that way the utility doesn't need to know that you have solar, you don't pump anything back to the grid. Excess power is sometimes wasted and you need a large battery. But 50$/month is completely unreasonable. How much power can an average residential solar system produce? 100$/month worth?
If the utility charges 50$/month to connect that to the grid, it is punitive compared to the 100$ worth of power produced. I can understand the utility paying you a lower rate for your power than they charge to supply you with their power but a flat fee makes no sense. It would make more sense to have the kind of system I described above for the extra 50$/month than paying the utility. Longer term utilities are shooting themselves in the foot if they think they can get away with this.
If the utility charges 50$/month to connect that to the grid, it is punitive compared to the 100$ worth of power produced. I can understand the utility paying you a lower rate for your power than they charge to supply you with their power but a flat fee makes no sense. It would make more sense to have the kind of system I described above for the extra 50$/month than paying the utility. Longer term utilities are shooting themselves in the foot if they think they can get away with this.
jhm
Well-Known Member
I don't know about the technicalities, but it rate payers with solar get pissed off enough with the utilities, Tesla and SolarCity will have little difficulty selling home grid storage systems to red blooded Americans. Controversy and showing how punitive the utilities are is really good PR. Think of how much free publicity auto dealers have given Tesla by trying to block their stores. Now we've got a utility in AZ that wants to the rump for solar+storage.
Any chance this was timed for the unveiling of Tesla's next product?
I'd have to read the actual tariff filing, but they've probably got that covered. Utilities have long had a "standby usage" tariff for customers who met part or all of their load with on-site generation (e.g. factories that had cogen electric and process steam) but wanted to assure they had power even if their on-site generation failed.
Here is what folks at Bloomberg think:
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SolarCity Powers Up Antitrust Lawsuit Against Salt River Project
A March 2 SolarCity antitrust lawsuit accusing the Salt River Project electric utility of trying to monopolize the retail provision of electric power may have staying power. At issue is a new Salt River pricing plan that allegedly imposes higher rates on customers who choose to use home solar panels for some power generation. Asserted facts in SolarCity's complaint, which claims that the price changes were intended only to exclude solar competitors, appear sufficient to meet the bar for pleading an antitrust case.
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Salt River Project Unlikely to Short-Circuit SolarCity's Lawsuit
Salt River Project is unlikely to be immune from SolarCity's March 2 antitrust lawsuit against the electric utility. Regulated utilities, even if they're lawful monopolies, don't have blanket immunity from antitrust laws. While application of antitrust laws to these entities may be limited in some respects, in this case, where the utility is allegedly using its market power in one market (grid access) to monopolize a second market (retail provision of electric power), antitrust liability may apply.
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jhm
Well-Known Member
Technologically, I think we are past the point where granting monopoly status to utilies serves a public good. I am able to get phone service from my choice of providers, natural gas, and satellite or cable television. But in the state of Georgia I have no choice of electric utility and companies like SolarCity are legally barred from leasing power generation equipment or writing PPAs, because only utilies are granted that privilige. So as bad as it may sound in Arizon, it's even worse in Georgia.
If SRP ratepayers had a choice in power providers, this sort of rate plan would not stand.
I'm tired of utilities arguing that it's not fair to have to provide back up capacity to solar residents who don't need much volume, or to have to pay feed in tariffs. They should give up their monopolies and let some other provider cover the capacity requirements or pay feed in tariffs.
If SRP ratepayers had a choice in power providers, this sort of rate plan would not stand.
I'm tired of utilities arguing that it's not fair to have to provide back up capacity to solar residents who don't need much volume, or to have to pay feed in tariffs. They should give up their monopolies and let some other provider cover the capacity requirements or pay feed in tariffs.
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Bloomberg hasn't spent 25 years working in utility regulatory law. I have. I haven't carefully read the complaint, however, so Solar City's lawyer may have come up with a clever angle I haven't considered, but I doubt it.
Standby usage tariffs are common for commercial customers, but for residential they are usually very small or nonexistent. Perhaps you can explain how the utility can get away with a rate structure where one customer without solar doesn't have to pay the tariff while another customer with solar has to pay it, even if they both consume the same amount of electricity each month. There are other reasons why a customer might not use much power in a month, not just solar. I don't think Tesla is complaining about this and is taking an antitrust angle instead.
I am completely unable to value it.
I can't explain it all. But I *can* tell you that SolarCity is engaged in securitization. So: they lease a solar panel to a customer. But then they turn around and put the solar panel into a trust, which collects the lease payments. Then the trust issues stock or bonds, and these are sold off to banks and investors for upfront money. (The bondholders pay Solar City a lump sum, and in return get the lease payments in the future.) Solar City only collects a small management fee in the future; they no longer "retain" the value of the lease.
I have no idea how this is structured for a PPA, but I'm sure there's something similar. There are also quite likely to be a lot of variations in the exact structure.
But the basic idea is this: Solar City fronts its own money to buy the panels and put them up, but SolarCity immediately turns around and resells the panels (and the income stream from the PPA or lease) to investors, recovering the upfront money immediately (hopefully with a profit).
So that's why retained value can go down even with contracted customers going up. It indicates increased securitization.
This sort of securitization is a form of off-balance-sheet accounting. As such it completely conceals the true economic state of the business; the state of the business cannot be determined from its earnings or balance sheet. This is why I cannot evaluate Solar City; it requires a lot of very in-depth research to figure out exactly what's going on with the securitizations, and how much risk is retained by Solar City.
I want to be clear: I'm not saying that the situation is bad. I'm saying that it is *hard to evaluate* because of the complex financial structure. If you can evaluate it, more power to you (and I'd love to read your analysis).
jhm
Well-Known Member
GridLogic
SolarCity Launches GridLogic, A Global Microgrid Service
We need to discuss the implications of SolarCity and Tesla getting into the microgrid industry. This could take SolarCity deeply global. This also could set infrastructure in place for selling EVs in places where utility grids are substandard or nonexistant. This could be huge.
SolarCity Launches GridLogic, A Global Microgrid Service
We need to discuss the implications of SolarCity and Tesla getting into the microgrid industry. This could take SolarCity deeply global. This also could set infrastructure in place for selling EVs in places where utility grids are substandard or nonexistant. This could be huge.
jhm
Well-Known Member
I got an email from my neighbor who is a Georgia state representative. She cosponsored bipartisan bill to allow solar installers to offer leases and PPA based financing in the state. The bill passed the House with no opposition.
If this become law, and I expect it will, then SolarCity and competitors will finally be able to bring their business model and financing to Georgia. I believe Georgia will quickly become an excellent market for rooftop solar.
Yay, Georgia!
If this become law, and I expect it will, then SolarCity and competitors will finally be able to bring their business model and financing to Georgia. I believe Georgia will quickly become an excellent market for rooftop solar.
Yay, Georgia!
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