SolarCity (SCTY)

[futureproof]

In addition to new home market, another couple possible surprise growth drivers in 2014:

Rapid electric car market expansion. 1/3 of all electric car owns have a PV system. That leaves 2/3 without a PV system. With Tesla selling 23,000(est. 15K N.America) Model S's in 2013, and projected to sell 35,000(approx 15k-20K N. America) Model S's in 2014, might have a strong probability of Solarcity exposure to this ever expanding and highly underserved market. In addition, Solarcity has a deal with Honda and BMW to offer its customers discounts on PV installs and associated products. I know the BMW came out with its i3 this year of which reports have suggested multi-thousand person interest list, so, Solarcity might see a nice jump in customer growth here and into future years.

Rapid supercharger expansion. In 2013, the supercharger network went from 9 to 50. Already this year, the network has expanded to 82 (32 SC increase thus far) and by the end of 2014, that number should balloon north of 120. So, more than 70 additional N. American SCs in 2014. (Superchargers) With these superchargers comes Solarcity PV installations. I don't think they will necessarily add a large number to the bottom line, but as more PV systems are installed I think it could add up. The other aspect of supercharger deployments is energy storage. As far as I know, the goal is to have all superchargers equipped with Tesla energy storage capabilities. It might not seem too financially impactful on Solarcity revenue, but by having a vast network of PV+energy storage already in place here, they can fine tune and improve their energy storage management products as well utilize the feedback of the network to roll out its residential energy storage product when the time comes (as the utility issues with fees and charges settles on the residential front). So, not only might they see a jump in total MWs due to supercharger expansion, but they might be able to further refine their energy storage product for the other markets. If this helps in developing a compelling PV+energy storage product for their residential, commercial, and utility markets, then it could be a distinct advantage over their competitor's energy storage efforts and should pay off big time in future customer growth.

 

[sleepyhead]

You must be either very young or weren't around when the tech bubble burst. The above phrase was sadly all too common in those days.

How come no one is addressing the impact of the change in legislation in 2017 on SCTY? It's a major problem for the company and there hasn't been ANY discussion on this in this thread.

I love how your very important question has gotten completely ignored by the SCTY "cheerleaders" in this thread. I really think that it is beneficial to hear both sides of the story to make sound investment decisions. If you constantly ignore all of the risks, then eventually you will get blind sighted by one when least expected.

I tried to show some risks to SCTY's business model and got blasted by the audience.

One thing that I find very sad is that we are on page 11 of this thread and not even one person has mentioned Solarworld here. This is by far the most important short and mid term catalyst for SCTY. It boggles my mind that SCTY shareholders are not discussing this...

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Actually that's $200/kWh, unless you misstated one or the other number. Please note: no criticism expressed or implied.

Edit: I quoted the wrong post number, and don't know how to easily fix it. The actual quote is from about 5 articles above the one the link would take you to.

I meant to say that the SCTY rep told a member here on TMC that a 10kWh battery normally costs $20k, "but since you are a solar customer then we can lease it to you for $1800 for 10 years."

 

[tslafan123]

I love how your very important question has gotten completely ignored by the SCTY "cheerleaders" in this thread. I really think that it is beneficial to hear both sides of the story to make sound investment decisions. If you constantly ignore all of the risks, then eventually you will get blind sighted by one when least expected.

Addressed it in Post #96. You missed it.

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One thing that I find very sad is that we are on page 11 of this thread and not even one person has mentioned Solarworld here.

If you are referring to their protectionist initiatives, I trust Lyndon's word on it. It's a nuisance in the short term, irrelevant in the long term. If you are referring to something else, maybe you can enlighten us.

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I tried to show some risks to SCTY's business model and got blasted by the audience.

I am sure everyone will be happy here to talk about the risks, atleast me. The issue was you came out with a presumptuous tone, saying
a) All customers would want to buy systems outright
b) SolarCity is unethical
c) Shareholders will loose theirs shirts, basically generalizing the entire investor base here. Just re-read your post 3 and 24. You can't start out in that tone and expect a quality conversation. You don't know everyone here!

futureproof's sentiment in his very first post in this forum is very valid. You really sound like you don't like solarcity.

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If you were to hold that attitude and want to have a conversation, what's different between you and John Petersen (with respect to Tesla)? He claims the same that he is writing all this stuff in the best interest of the general audience. To save them from loosing shirts. etc.

 

[sleepyhead]

Addressed it in Post #96. You missed it.

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If you are referring to their protectionist initiatives, I trust Lyndon's word on it. It's a nuisance in the short term, irrelevant in the long term. If you are referring to something else, maybe you can enlighten us.

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I am sure everyone will be happy here to talk about the risks, atleast me. The issue was you came out with a presumptuous tone, saying
a) All customers would want to buy systems outright
b) SolarCity is unethical
c) Shareholders will loose theirs shirts, basically generalizing the entire investor base here. Just re-read your post 3 and 24. You can't start out in that tone and expect a quality conversation. You don't know everyone here!

futureproof's sentiment in his very first post in this forum is very valid. You really sound like you don't like solarcity.

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If you were to hold that attitude and want to have a conversation, what's different between you and John Petersen (with respect to Tesla)? He claims the same that he is writing all this stuff in the best interest of the general audience. To save them from loosing shirts. etc.

Regarding the bolded part, I don't think that you really want to talk about risks, because every risk we presented you brushed off as a non-issue.

I hope that you are right for your sake, because I really don't have any stake in this game. I just don't like how every SCTY shareholder (including yourself) doesn't want to acknowledge that the risks are real.

As far as the rest of your post goes, I find it extremely rude and will not comment on it, because you are not worth my time.

 

[tslafan123]

every risk we presented you brushed off as a non-issue.

Lets take a checkpoint:

- I gave an elaborate response to risks posed by killer_model_s in post 96

- Regarding SolarWorld that is all I heard from management. For me personally that was good enough, especially given that I am long term oriented. I heartily welcome your or anyone's detailed analysis.

Regarding risks you mentioned in post 3:

- Pricing Model: I posted pricing models in post 20 and post 41. I am all ears for feedback. Accounting is not my background. I put it together on a best efforts basis. I invited all feedback.

- Lease vs Buy: Everyone here discussed to death. Including me.

So which specific risk(s) did I brush aside?

Let me put the ball in your court. How come you didn't say a single positive thing about SolarCity? Honestly, there isn't even one??

 

[AlMc]

Based on Sleepy's last post I doubt he will be posting again on this thread. Just a hunch.

 

[futureproof]

Based on Sleepy's last post I doubt he will be posting again on this thread. Just a hunch.

If we all have concerns about the risks of Solarcity, by all means present them here, foster healthy debate... that's valuable conversation to investors and non-investors alike. I would really like to keep that going here in this thread, just as everyone else does.

But, to not acknowledge the mitigating factors of risk -- aka risk management -- a person is not really analyzing the risk profile of Solarcity. I'm sure every single company on earth has a plethora of risks that would completely crush them if they came true... but the ones that thrive are capable of mitigating them effectively. Risk is one side, mitigation is the other side. I think to be willing to consider the risks of Solarcity, one must also be willing to consider the successful mitigation of those risks by Solarcity.

 

[futureproof]

The risk of Solarcity not adapting to the changing market conditions and halting compounding growth is real, no doubt. However, I am curious to get feedback on what Bob Kelly stated in his recent ROTH presentation. He said Solarcity is continuously evolving and outlined the evolution as follows:

solarcity 1.0 — installation company
solarcity 2.0 — selling energy company
solarcity 3.0 — pv + energy storage company
solarcity 4.0 — monitize/manage energy for customer

Is this the right path of evolution to adapt to future solar market changes? What does he mean by his "Solarcity 4.0" idea?

 

[Subhuman]

I think we need to get back on topic. The three-way conservation needs to end. Sleepyhead is a well respected contributor to this forum and has never given me any reason think otherwise. He Does not like SCTY plain and simple. I have known this for quite awhile based on previous post in the solar thread. It doesn't matter if he likes SCTY or not, that is purgative. I think no differently of him.

With that being said, I am an investor in SCTY (got in around $25) and have been very happy with my returns even with the recent drop but I admit I am a little fuzzy on the business model details. I was excited to see a SCTY thread started by Curt who is another highly respected contributor to this forum. My hope was that this thread could be helpful in clarifying a lot of my questions, sadly this has not been the case so far and we are already on page 11. I jumped into SCTY mainly because of the Musk connection and knew it was a bit risky at the time but the success of Musk convinced me that it would not end badly.

Additional, I have also taken some of Sleepyhead's advice on some solar stocks that he is very active in. Mainly CSIQ which I had jumped into around $20 based on all of the information Sleepyhead provided. It has also worked out handsomely for me even with the recent downturn.

I guess my point is, let's agree to disagree and move on with an in-depth conversation of SCTY instead of a bunch of one-upmanships.

 

[Norse]

If you are referring to their protectionist initiatives, I trust Lyndon's word on it. It's a nuisance in the short term, irrelevant in the long term. If you are referring to something else, maybe you can enlighten us.

I think this shows that you don't even want to look at their issues at all. I am investing in SCTY, but to call them irrelevant is just wrong. Most of the Chinese companies has reduced or even stopped their shipments to the US. But you trust the CEO so this is a non-issue? Seriosly? This could break the whole Solar industry in the US.

 

[ggies07]

I think we need to get back on topic. The three-way conservation needs to end. Sleepyhead is a well respected contributor to this forum and has never given me any reason think otherwise. He Does not like SCTY plain and simple. I have known this for quite awhile based on previous post in the solar thread. It doesn't matter if he likes SCTY or not, that is purgative. I think no differently of him.

With that being said, I am an investor in SCTY (got in around $25) and have been very happy with my returns even with the recent drop but I admit I am a little fuzzy on the business model details. I was excited to see a SCTY thread started by Curt who is another highly respected contributor to this forum. My hope was that this thread could be helpful in clarifying a lot of my questions, sadly this has not been the case so far and we are already on page 11. I jumped into SCTY mainly because of the Musk connection and knew it was a bit risky at the time but the success of Musk convinced me that it would not end badly.

Additional, I have also taken some of Sleepyhead's advice on some solar stocks that he is very active in. Mainly CSIQ which I had jumped into around $20 based on all of the information Sleepyhead provided. It has also worked out handsomely for me even with the recent downturn.

I guess my point is, let's agree to disagree and move on with an in-depth conversation of SCTY instead of a bunch of one-upmanships.

Same here and agree.

 

[dalalsid]

Most of the Chinese companies has reduced or even stopped their shipments to the US.

Panel prices are not rising enough to be a concern yet though. Maybe SCTY should just acquire Solarworld and make them shut up once and for all. Then they can also be vertically integrated like sunpower but they could also use Chinese panels for their installation if they don't produce enough to satisfy their customer growth.

 

[tslafan123]

I think this shows that you don't even want to look at their issues at all. I am investing in SCTY, but to call them irrelevant is just wrong. Most of the Chinese companies has reduced or even stopped their shipments to the US. But you trust the CEO so this is a non-issue? Seriosly? This could break the whole Solar industry in the US.

FYI, this is what I wrote earlier today. Seems like you missed it:

- Regarding SolarWorld that is all I heard from management. For me personally that was good enough, especially given that I am long term oriented. I heartily welcome your or anyone's detailed analysis.

We treat Elon Musk as God himself on this forum. Anything he says is set in stone for us. Lyndon Rive's words deserve some respect too. (After all they come from the same gene pool, Musk's mom and Lyndon's mom are twins.) Musk has said innumerable number of occasions that he is very happy with SolarCity's execution. He even said something like "it's growing at a rate faster than any company ever did" or something like that. 100% growth rate for 7 consecutive years with more of the same for another three years is no normal feat. So overall point: Lyndon's words deserve respect in my view.

Your view can be different, so please share your thoughts on the SolarWorld issue.

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I think we need to get back on topic. The three-way conservation needs to end. Sleepyhead is a well respected contributor to this forum and has never given me any reason think otherwise. He Does not like SCTY plain and simple. I have known this for quite awhile based on previous post in the solar thread. It doesn't matter if he likes SCTY or not, that is purgative. I think no differently of him.

With that being said, I am an investor in SCTY (got in around $25) and have been very happy with my returns even with the recent drop but I admit I am a little fuzzy on the business model details. I was excited to see a SCTY thread started by Curt who is another highly respected contributor to this forum. My hope was that this thread could be helpful in clarifying a lot of my questions, sadly this has not been the case so far and we are already on page 11. I jumped into SCTY mainly because of the Musk connection and knew it was a bit risky at the time but the success of Musk convinced me that it would not end badly.

Additional, I have also taken some of Sleepyhead's advice on some solar stocks that he is very active in. Mainly CSIQ which I had jumped into around $20 based on all of the information Sleepyhead provided. It has also worked out handsomely for me even with the recent downturn.

I guess my point is, let's agree to disagree and move on with an in-depth conversation of SCTY instead of a bunch of one-upmanships.

There seems to be a consensus here that sleepy just doesn't like SolarCity. He hasn't said a single positive thing about SCTY. He bashes the company and its investors. He calls the company's investors and supporters as "cheerleaders".

Does all this make him a naysayer?

How much credence do we give absolute naysayers like John Petersen, Logical Thought or Paulo Santos with regards to Tesla?

So, why should I give any credence to his views as it specifically relates to SCTY?
Note: I am NOT talking about his views on other companies. I'm specifically referring to SCTY.

Do you really have an open mind to engage in a constructive discussion with John or Paulo and accept their feedback into your thinking or research? They both claim they have nothing at stake. They both also claim there are only doing this for general good!

 

[Norse]

Is that your answer to the issue? That since we praise Elon Musk, a rocket scientist, then we should also praise his cousine? Once again I am long SCTY but if you really dont seem to able to answer a question regarding their future. With the increase in demand in Japan and China there is no reason for the Chinese to ship to the US. There is hard evidence that this already has started. Didnt SCTY also said at their first Q4 CC that they would tell us how they would resolve that? And did they say it was no problem?

 

[futureproof]

I echo tslafan123 and will add a little myself...

Risk of the pro-Solarworld ant-dumping decision: Solarcity will have to pay more for Chinese panels. If all Chinese manufacturers stop shipping to the US, Solarcity won't be able to buy them and will have to source all future panels from more expensive non-chinese manufacturers. All projections of growth will slow as a result.

Mitigation: Solarcity management(and solar industry at large) has known about the Solarworld situation for a long, long time. They've had ample time to think about various scenarios and courses of action. In the latest conference call, both Lyndon and Peter Rive expressed they are currently working with other non-chinese panel manufacturers in addition to their current Chinese contracts, as part of their diversification plan. They've also said even if the case played out the worst case scenario this year, they will still achieve their 5% cost reduction goals. Now, you could say why do you listen to what they say? They could be lying. They could be wrong, then what? Well, that is true. It is also true for every single management team of every single company on the planet. That's why a track record of prior execution is important to validate those statements. Based on Lyndon/Peter's track record, I will give significant weight to their proclamation of continued cost reductions in the face of this issue, until evidence proves otheriwse. Given that, I anticipate projected cost reductions will continue to allow them to offer their products for a competitive price and that's the most materially important thing here.

Another less explicit method of mitigation Solarcity might be pursuing is international expansion in order to continue current Chinese relationships or other international manufacturers that offer competitive cost value in specific countries. Studying the management comments throughout the year, one might conclude they might accelerate international expansion timeline in Japan, Australia, and Western Europe. I've read comments by Tesla CTO JB Straubel suggesting early introduction of energy storage to specific island nations, most notably, Japan due to there strong energy storage implementation policies. This sentiment was echoed by Lyndon and Peter and they even went future as to confirm their intent on going to Zep (recently acquired company) heavy countries like Japan and Australia. Lyndon said expansive isn't a decision of if, but when... will they do it this year or next year? Lyndon mentioned at the recent CPUC talk he had an interesting meeting with a major unnamed Western European power company. They do have strong partnerships with US power companies Viridian and Direct Energy, so this meeting could indicate more of the same could happen in Western Europe soon.

Lastly, another mitigating factor for Solarcity is if Solarworld negotiates a settlement. A settlement could minimize Chinese restrictions and keep a low cost structure attractive to Solarcity in continuing current partnerships. In addition to the Chinese government(for obvious reasons), the US government has much to gain from a settlement. The US has seen a substantial boom in clean energy job growth, specifically PV installation related jobs and expect to see this growth continue in the future. It would be in the countries best interest to minimize the impact of Solarwind. Current reports suggest the state department is discussing this very issue with China at the moment, so settlement might have some growing momentum. Moreover, Solarworld is a multi-national company based out of Germany, so a settlement might be advantageous in future their higher corporate objectives and bottom line.

Overall, the risks of Solarworld are real and I conclude Solarcity knows this and is executing various mitigation strategies, potentially the ones mentioned above. Based on their execution track record, I no reason to discount their ability to execute effectively on those strategies right now.


Edit: Sorry for any weird word choices... I'm typing this on my iphone and auto correct is a pain in the fourth-point-of contact! that goes for spelling too!

 

[tslafan123]

futureproof, Thanks for the excellent analysis. This far beats the blind bashing of - the powers that be.

If and when you have some time, can you please post any links related to the points you made.

Thanks and appreciate it!

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SolarCity's CEO Discusses Q4 2013 Operating Metrics (Transcript) - Feb. 24, 2014

Peter Rive - Chief Operations Officer, Chief Technology Officer
The answer to those two questions, they’re actually interrelated, the trade case, needless to say, is not going to be helpful at all, but is very much a short term factor. So we don’t expect that it will dramatically affect our costs in the long term. And then there also strategies that we’re contemplating that would give us the ability to protect us from the [unintelligible] trade case. But with the uncertainty surrounding the trade case, it is exactly for that reason that it is difficult for us at this time to provide a cost forecast that we’re confident in. So sorry for that, but we will be providing a revised cost forecast to you all during the next earnings call.

Lyndon Rive - Chief Executive Officer
And overall, our expectation for the year is we don’t know exactly the impact of the trade case, but in either case, we are confident our costs will reduce, we just don’t want to forecast how much just yet, until we know the impact

link

 

[futureproof]

Tslafan123... I'll try to get those links later tonight. If sleepy was game, he could go into great detail about the Solarworld situation, but don't think that's part of his agenda on this thread. I'd love to be proven wrong though...

as as far as the conf. Call transcript... They left out the part where both peter and lyndon reiterated confidence in meeting 5% annual cost reduction goals... You can actually listen it on the iphone now, check out the latest conf call on the investor events page if have the time...

 

[The Blue Owl]

Guys, I understand you feel sleepy isn't being objective, but do all of us really have to agree on everything? He stated his position and his reasons behind it more than once. You don't agree, and that's fine, but why do you feel it is absolutely necessary to bring him back into the discussion? You said it was because of his good reputation, but I think people on this board are perfectly capable to filter out the various biases that we all have, and make up their own minds without having to constantly sift through this side-show.

I have been reading everyone's posts on the subject because it's clear it's a controversial stock, and the arguments on both sides, including yours, are helping me understand the company better. But the continuous personal content of some of these posts is at best distracting, and at worst inflaming. Other posters expressed pretty much the same view.

There is a big difference between trolls who publish articles for money, and who live and die by their click rates, and private posters who have established a track record of good contributions. I wouldn't mind questioning the motives of someone like JP if he posted here, but focusing on sleepy's motives is unnecessary and unhelpful.

I hope we can tone it down a bit and focus on the arguments, especially since you have some compelling ones. Please take this comment at face value, as coming from an interested poster, not as a moderator-wannabe.

 

[tslafan123]

as as far as the conf. Call transcript... They left out the part where both peter and lyndon reiterated confidence in meeting 5% annual cost reduction goals... You can actually listen it on the iphone now, check out the latest conf call on the investor events page if have the time...

futureproof, Yes there were three different calls this earnings cycle. Seeking Alpha has transcripts for only two. On top of this they have a ROTH conference presentation plus there is this Lyndon Rive video from December. So I am all mixed up in terms of what I heard where. I distinctly remember Lyndon using the word "nuisance" to describe solarworld lawsuit. I even looked up the word on google to see how bad it is Anyhow, it is what it is. I have full faith in the management that they will resolve this in a decent manner.

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Guys, I understand you feel sleepy isn't being objective, but do all of us really have to agree on everything? He stated his position and his reasons behind it more than once. You don't agree, and that's fine, but why do you feel it is absolutely necessary to bring him back into the discussion? You said it was because of his good reputation, but I think people on this board are perfectly capable to filter out the various biases that we all have, and make up their own minds without having to constantly sift through this side-show.

I have been reading everyone's posts on the subject because it's clear it's a controversial stock, and the arguments on both sides, including yours, are helping me understand the company better. But the continuous personal content of some of these posts is at best distracting, and at worst inflaming. Other posters expressed pretty much the same view.

There is a big difference between trolls who publish articles for money, and who live and die by their click rates, and private posters who have established a track record of good contributions. I wouldn't mind questioning the motives of someone like JP if he posted here, but focusing on sleepy's motives is unnecessary and unhelpful.

I hope we can tone it down a bit and focus on the arguments, especially since you have some compelling ones. Please take this comment at face value, as coming from an interested poster, not as a moderator-wannabe.

Agreed. There is no point engaging in these pissing contests. We all have better things to do in our lives.

 

[futureproof]

tslafan123... ahead of schedule... here's the links:

--possible trade case settlement report: http://english.cntv.cn/program/bizasiaamerica/20140215/101951.shtml
--Lyndon confirming 5% annual cost reduction (international strategy): http://www.media-server.com/m/p/8on7axkr
--JB Straubel comments: http://www.energybiz.com/magazine/article/346913/tesla-s-power-play
--Lyndon on European meeting: Innovation and the Impact of Regulation with Elon Musk and Lyndon Rive - YouTube

But now, to something I couldn't resist commenting on... If anyone was able to watch the Herb Greenberg CNBC clip that popped up on the iPhone stock app today (I know I try to avoid that news feed, but it was too tempting to open it once I saw it), it was quite entertainingly indicative piece of the short player FUD. Seems to me the key short magic word is "complex." Complex meaning smoke and mirrors, mystery box, fuzzy math... sell-this-stock-so-I-can-make money kind of rhetoric...

Herb Greenberg's "digging" into Solarcity's 10-k, was about as deep as his tap on the return key to pull up how many times "complex" showed up within the 162 page 10-k document... thanks for finding out it was one more time then last year at six time total... wow, I'm going to have really evaluate things now... come on, really? Then he goes onto talk about retain value... retained value in all cash coming to Solarcity AFTER all expenses and tax equity, the NPV is 6% which is a conservative estimate given the fact that they are moving heavily toward asset backed securitization and currently getting 4.8% right now... since the energy payments are high quality, reoccurring long term, cost saving UTILITY payments...meaning the stats show these payments get paid even before the mortgage payment... that interest rate will decline even further to fall in tandem with prime mortgage rates... every single quarterly report/presentation has talked about retained value and what it means... it's not too hard to undercover but Herb's dramatic "I just don't understand" is quite convincing (said no one ever). He doesn't understand the renewal rate at 90%... look a little deeper then your short talking points Herb and realize, that's what Solarcity is experiencing right now with new home owners taking over previous owners solar lease/ppa systems. Over 90% are signing up with Solarcity when they move in. In the entire history of Solarcity, over all it's 100K customers, only one system has been taken off a roof. 1 in 100k right now. I think Herb fails once again to "understand" is that's what happens in a ppa/lease agreement... people pay for power, not the system. In 30 years, people will continue to pay for power and not the system. That's the point of Solarcity's business model and future evolution plans!!!!! But that's too "complex" so sell, right Herb? The reason they have forecasted 475-525 MWs, because they are CONFIDENT they can achieve it. Look at all their acquisitions, look how they are prepping the "army" and "troops" in the field... look at the BOOKINGS/BACKLOG... the backlog is already nearly 75% of the 475-525 MWs goal! Zep has already help increased installations/crew/day from .4 to .9 installations/crew/day... that over double in a matter months which indicates a significant cutting backlog and increase volume of MWs installed. So much so, Lyndon Rive is excited to deployment Paramount's marketing campaign to begin increasing volume of bookings to match operational capacity. Doesn't seem like they are "pressured" at all. Seems like they achieving a high level of execution to me, but that might be too "complex" to understand.

Oh, then he brings up the old subsidized industry bit, wow, he's really got the short player crib sheet written on his palm now... It is my opinion that one of the single greatest tax dollar investments in American history might prove to be the 30% ITC and all state/local incentives for Solar and renewable energy development. The air is cleaner for all of us, our land is less spoiled by contaminates, our rivers less spoiled by spills, there is more water for us to drink, we consume less oil and related products, and it has expanded long term technology/construction/manufacturing jobs for American's into the foreseeable future, and energy is cheaper... and the kicker, when we stop subsidizing it, the investment pays us back in perpetuity! Wow, name me one time we've ever invested in something as American's with that great of a return! So, to use the subsidy argument is just plain amateur and reeks of agenda. Please, we are all so much smarter than that!

A little breakdown of revenue... Ppa contract is pay for production only. Whatever the system produces that month, you pay that per/kw price... this income is highly seasonal. Low in the winter, high in the summer, in the end it all evens out on average with Lease payments though. Lease payments are monthly. So that income is consistent throughout the year. It remains the same amount every quarter. So when reading the financials, an analyst must understand "seasonality" and adjust their models according to the mix of ppa/lease. Therefore, if you see a lower revenue in Q4 and Q1, must really evaluate the ppa/lease mix and really look to see if this lower revenue in those quarters reflect seasonality or slowing growth... seems counterintuitive, but possibly lower revenues in quarters Q4 and Q1 might be an indication of a much greater growth rate of ppa sales (which has the similar weight of importance as lease to Solarcity's business model). If ppa growth rate is strong, then we might see a rather significant rise in revenue starting in Q2 and most likely really showing up in Q3... if that rise is steep enough, maybe inclined to evaluate the business model's future performance on the average rate of increase during this time period in the future given the mix off ppa/lease...

Lastly, to say Elon and Tesla are not the same as Solarcity and Lyndon is absolutely true. What they really are, are SYNERGISTIC pieces to the larger puzzle Elon, et. al. are laser focused on achieving. Sustainable production and consumption of energy. To try to separate the two is an absolute exercise in futility and a waste of valuable time. Please don't mistake masterful financial acumen for "complexity." One just has to remember how Elon got to be where he is today... he cut his teeth on creating one of the most widely use financial platform on planet earth...PAYPAL... an internet based financial enterprise. Between Elon, Lyndon, Peter, and the multiple principals within the Tesla/Solarcity brain trust, you will find probably the most significant financial experience/knowledge in modern day finance in the entire world... another way to look at it, they ARE the current standard of which business finance is happening. It's like watching your first NBA game from the perspective of 4th grade playground baller. Elon/Lyndon et al. are just playing at another level. To downplay that as "complex" just demonstrates you're truly not "getting it" and maybe why in the end some succeed and others don't. However, I believe all people are capable of that light bulb moment, it's a matter of being willing to have it.