jhm
Well-Known Member
Can I ask that we not have a discussion about LEAPs here? If someone wants to use leverage, that's their choice. I think its much better to keep focus on what we are investing in than how we are investing in it.
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jhm
Well-Known Member
U.S. coal production dropped to 30-year low in 2015 : Renew Economy
I'd like to request a moment of silence for the US coal industry.
(Pause)
Ok, that's enough. It is astounding to me that coal production can decline by 25% over the latest 7 years, obstensively replaced with natural gas, and yet natural gas is in an abysmal glut itself with prices well below breakeven for gas producers. I think this kills the argument that coal was the victim of regulation. Regulatory costs on coal would have simply propped up the price of gas as an alternative. But this did not happen. With gas prices so low, it would have eroded coal's price and market share even without any regulation. Regulation only makes things more expensive, it does not create a glut of alternatives.
I suspect that the real culprits here are energy efficiency, wind energy and solar energy. All three have challenged fossil fuel prices across the board. It used to be said that alternative energy was not really cost competitive. And yet the price of every fossil fuel has had to decline severely while losing market share or being on the verge of it.
The decline of 1.2B short tons of US coal in 7 years is monumental. Imagine if we saw the same in 7 years for oil. The US produces about 9.5 mb/d of oil. Imagine that dropping to 7.1 mb/d by 2022. It could happen especially if oil remains below $40/b for long enough. And the same will happen to natural gas too, if gas remains under $3/MMBTU. Renewable will continue to exert price pressure. The question is not whether renewable will ever be price competitive with fossils, but how low can the price of fossils go.
I'd like to request a moment of silence for the US coal industry.
(Pause)
Ok, that's enough. It is astounding to me that coal production can decline by 25% over the latest 7 years, obstensively replaced with natural gas, and yet natural gas is in an abysmal glut itself with prices well below breakeven for gas producers. I think this kills the argument that coal was the victim of regulation. Regulatory costs on coal would have simply propped up the price of gas as an alternative. But this did not happen. With gas prices so low, it would have eroded coal's price and market share even without any regulation. Regulation only makes things more expensive, it does not create a glut of alternatives.
I suspect that the real culprits here are energy efficiency, wind energy and solar energy. All three have challenged fossil fuel prices across the board. It used to be said that alternative energy was not really cost competitive. And yet the price of every fossil fuel has had to decline severely while losing market share or being on the verge of it.
The decline of 1.2B short tons of US coal in 7 years is monumental. Imagine if we saw the same in 7 years for oil. The US produces about 9.5 mb/d of oil. Imagine that dropping to 7.1 mb/d by 2022. It could happen especially if oil remains below $40/b for long enough. And the same will happen to natural gas too, if gas remains under $3/MMBTU. Renewable will continue to exert price pressure. The question is not whether renewable will ever be price competitive with fossils, but how low can the price of fossils go.
What a mess. I now agree Lyndon should not be talking to the public much. That's a problem. He clearly has people on his team who can do this job well, he simply can't.
Now this raises the question. What happens to all these folks with PPA when solar penetration is at over 20%, solar panels are much cheaper than today, and batteries are a dime a dozen. The $11K of value that Lyndon is talking about when buyback is at $.02 is gone, that's going to definitely happen in under 20 years even if net metering sticks around. I haven't seen this modeled in any of their material. Looks to me the "grandfathered" contracts aren't going to be worth much and folks would have to upgrade their systems to include energy storage to keep up with those developments, but since it's a PPA that's not up to them.
Now this raises the question. What happens to all these folks with PPA when solar penetration is at over 20%, solar panels are much cheaper than today, and batteries are a dime a dozen. The $11K of value that Lyndon is talking about when buyback is at $.02 is gone, that's going to definitely happen in under 20 years even if net metering sticks around. I haven't seen this modeled in any of their material. Looks to me the "grandfathered" contracts aren't going to be worth much and folks would have to upgrade their systems to include energy storage to keep up with those developments, but since it's a PPA that's not up to them.
TheTalkingMule
Distributed Energy Enthusiast
I'll have to take a look at the Lyndon video later today, but I still don't see a scenario where a PPA is anything but a blessing. If solar penetration hits 20% then the excess supply at peak must be somewhere above 200% and that opens up all sorts of fun possibilities. Those days are a loooong way off and in the mean time protection from rising grid rates is infinitely more valuable.
We've been through all these scenarios earlier in the thread. The only thing threatening SCTY (and solar in general) is when utils are allowed to pay base wholesale for peak supply like NV is trying. That has zero chance of happening because it only makes things much worse for rate payers by driving earlier adoption of batteries and jacking up grid prices even more.
Energy as a service will be the future and SCTY looks like they're going to stay out in front. Much like a PPA owner, you don't have to worry about every little hiccup, solar will always have the advantage.
We've been through all these scenarios earlier in the thread. The only thing threatening SCTY (and solar in general) is when utils are allowed to pay base wholesale for peak supply like NV is trying. That has zero chance of happening because it only makes things much worse for rate payers by driving earlier adoption of batteries and jacking up grid prices even more.
Energy as a service will be the future and SCTY looks like they're going to stay out in front. Much like a PPA owner, you don't have to worry about every little hiccup, solar will always have the advantage.
The reality is this will not stand. They will be grandfathered. The entire political spectrum is against what the PUC did. This is unprecedented to the nth degree. It is an extreme case that does not stand legal scrutiny.
In addition, the entire decision, all changes to the rates, are not within the what the bill specifically states the PUC actions must ensure: renewable investment, private investment must be able to grow(venture capitalists have already sent a letter saying they can't invest in renewables in Nevada now), create jobs and economic growth (Solarcity, sunrun have laid off more then 700 people already, vivint has closed down its business in the state), streamline the net metering process(already a massive confusion to how the rates work in addition to being charged these rates without any public information available on he website), ensure renewable diversity in nevadas Portfolio(no more roof top solar installs pretty much closes that down real fast.
The entire decision of the PUC was required to balance these objectives with their decision. Clearly that has not happened.
this has not and won't happen in any other state... Even Arizona.
Like I said before, the intent of this entire saga is to delay, push this into the legal system, take as much time there as possible. Since it is clear NV Energy has strong political influence like in no other market in the US by far, bar none, they can create this delay effectively.
to add: Lyndon did a good job with that hostile interviewer. It was clear to see he was clearly dealing with someone deeply aligned with the talking points. If you took a drink for every time they interviewer said "subsidy" you would be comatose in the hospital right now. I really liked how Lyndon said, show the numbers and the interviewer couldn't deal with it.
add2: forgot to mention the show Lyndon was on last night is sponsored by NV Energy. Also, it is telling to note that NV Energy is a member of ALEC.
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TheTalkingMule
Distributed Energy Enthusiast
Again haven't watched the video yet, but he should have been hoping for aggression and been able to rip it to shreds with ease. That apparently did not happen.
Watch the video before you make a statement like that.
He did a good job with what was puked at him. Key things: Lyndon challenges the net metering "numbers" Nv energy gave to the PUC, then the PUC rubber stamped as fact, as well as the governor and writers of the senate bill 374... All rubber stamped the numbers and "subsidy" assertion as fact. The reporter had no answer, doesn't have a a clue what the numbers actually are nor did he try to validate his own accusations. Among various other points, Lyndon looked good and won the debate. He got viewers to ask questions about what they are being told by their own officials and media... To start connecting the dots and following the smoke...
my only real issue is that he didn't promote the supposed rally at the Nevada PUC at 9am today on air. Imagine if something like a 1k people showed up and crammed the building with supporters of roof top solar because of it. Maybe he didn't need to do that, but it wouldn't have hurt.
Why has the stock been persistently sliding? Is it all due to NV?
AFAIK short interest has been declining since the NV ruling came out. So it has to be people on the long side selling.
What are your thoughts on when we will see trend reversal? I am hoping for a positive ABS announcement but things seem to be dragging. The ratings on the MyPower deal came out mid Dec. So a month has passed. The holiday season might have delayed things a bit. But I am still hopeful we will hear something soon.
Any other catalysts or news that can potentially turn this around?
Is anyone keeping tabs on any other sources other than this thread, to get other perspectives which could shed light into what's going on (whether we accept with the reasoning or not).
AFAIK short interest has been declining since the NV ruling came out. So it has to be people on the long side selling.
What are your thoughts on when we will see trend reversal? I am hoping for a positive ABS announcement but things seem to be dragging. The ratings on the MyPower deal came out mid Dec. So a month has passed. The holiday season might have delayed things a bit. But I am still hopeful we will hear something soon.
Any other catalysts or news that can potentially turn this around?
Is anyone keeping tabs on any other sources other than this thread, to get other perspectives which could shed light into what's going on (whether we accept with the reasoning or not).
Just about exactly what LR is saying in the video. He seems to do a good job at deflecting the interviewer (Ralstons 'rude' questions as it seems he is trying to get LR to say something about corruption or generate a similar headline) while still getting his point across about how his big concern about existing NV Energy customers getting massively penalized and future owners not having any financial motivation to go solar under the new law.
The Blue Owl
Endangerous Herbivore
Lyndon kept his composure in the face of extremely hostile questioning and refused to take the bait that the host kept trying to push down his throat. As a result, Lyndon managed to make his points logically and backed by data, while the host came across as the one with an agenda. Which is no wonder, seeing as NV Energy was one of the most prominent sponsors of the show (judging by the order in which the sponsors were acknowledged at the beginning).
My blood pressure still hasn't recovered because of the extreme hostility of that host, but Lyndon did great.
i also keep hearing that governor and many other politicians say the PUC is "quasi-judicial." There is nothing judicial about it. The governor appoints everyone of them, he picks them and they sit on the commission.
there is no hearing process before the state legislature on the "nomination", their is no vote on their being placed on the commission or not. Nothing. How can they be validated as "experts" with untouchable judicial authority if the state representatives of all Nevadans can't interview them and have a vote whether they are qualified or not? It's all a complete joke.
It just shows how dumb this governor and supportive legislature(and media) think he people of Nevada are. This crap may have been effective before the Internet, but not anymore.
Seems they are going to quasi-judicial themselves out of office. Good luck Sandavol on your vice presidential bid with Cruz because that the last chance you'll have to rep Nevada again.
TheTalkingMule
Distributed Energy Enthusiast
Just watched the video. Horrendous. Absolutely horrendous. It would be the easiest thing in the world to refute "cost shifting" and "subsidies", all he did was add more confusion. If SCTY had a proper PR group and a proper spokesperson we wouldn't have half the volatility that we see when these little attacks pop up. The next 10 years is going to be made up ENTIRELY of these little battles and meandering through them properly is vital.
At 7:32 any moderately informed solar advocate should be able to destroy that guy to the point where he stops dead. Do we have to go through this line by line? SCTY is FAR worse off today than it was yesterday because of Lyndon's poor explanation of their product and solar in general. How long is this going to go on?
When I could do a better job than the guy you throw up there, you need to rethink strategy.
To Add: If I'm a short specialist, I'd carve that video up and use it to make millions. I suspect that's what we'll see over the next little bit. Another accumulation opportunity yes, but at some point SOMEONE needs to articulate this company properly in a public forum. I recommend elevating Radford Small to some C Level position if he's still a SVP and make him the media face of the company.
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Lyndon maintained his composure very well. He did a good job laying out the data and refuting the 'subsidy' debate. He also did a good job not falling for the anchor's bait in calling out corruption. Although I am not sure which way it is better - calling out corruption or not.
I think if this whole NV debate dies away it will actually relieve the stock. But Lyndon is doing what needs to be done. As he said on the Analyst Day they shout as loud as they can deliberately to affect change. That doesn't mean SolarCity is permanently screwed or anything like that. But Mr.Market doesn't seem to get it.
I think if this whole NV debate dies away it will actually relieve the stock. But Lyndon is doing what needs to be done. As he said on the Analyst Day they shout as loud as they can deliberately to affect change. That doesn't mean SolarCity is permanently screwed or anything like that. But Mr.Market doesn't seem to get it.
TheTalkingMule
Distributed Energy Enthusiast
Hard for the market to "get it" when your platform is not being articulated in a fashion that analysts and individual investors can understand. He's an absolute genius and one of the handful of people actually savings the world, but Lyndon comes off as a 2nd year Environmental Studies major in every public appearance I've seen.
The noise needs to be ignored, but at the same time you don't want to give people reason to believe the noise when it's shouted in the CEO's face and he has a stuttering/disjointed response.
The noise needs to be ignored, but at the same time you don't want to give people reason to believe the noise when it's shouted in the CEO's face and he has a stuttering/disjointed response.
Thanks for the link!
What a freakin prick that host was though! Almost like he was playing a role to stir things up for his show. Lyndon was destroying him at the end and then he just cuts him off. boo!
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haha, oh man, that makes it even better. And yeah, I'm sitting here trying to eat lunch and the more I watched, the less I wanted to eat.
If the concern is for the stock. He should have said something like - oh _____ it, it's just 17,000 users. SolarCity has maybe 5,000 of it. That translates to less than 2% of our consumer base. Who gives a ____. The Retained value growth within two weeks will more than make up for it. So we are not impacted. It's just that the state lost jobs. It's your loss.
All this yelling and screaming potentially implies two things. 1) He is genuinely concerned that the precedence will be a detriment to sales even in other states and thus he wants to get it reverted. Remember it's about consumers 'perception'. Facts may not warrant a detriment but perception could. 2) He wants to fight it to create a detriment to PUCs and utilities elsewhere thinking of doing something like this elsewhere.
Market is worried about what it all means to the future. The uncertainty is driving the market down.
So quite honestly this NV issue silently dying away is really better for the stock. But Lyndon is trying to fight his best to stave off potential issues elsewhere.
What do we do, it's a tough situation. You can't keep accumulating forever. At some point everyone gets tapped out. Market can stay irrational lot longer than one can stay solvent. So we just have to accept the volatility and live with it, it seems.
All this yelling and screaming potentially implies two things. 1) He is genuinely concerned that the precedence will be a detriment to sales even in other states and thus he wants to get it reverted. Remember it's about consumers 'perception'. Facts may not warrant a detriment but perception could. 2) He wants to fight it to create a detriment to PUCs and utilities elsewhere thinking of doing something like this elsewhere.
Market is worried about what it all means to the future. The uncertainty is driving the market down.
So quite honestly this NV issue silently dying away is really better for the stock. But Lyndon is trying to fight his best to stave off potential issues elsewhere.
What do we do, it's a tough situation. You can't keep accumulating forever. At some point everyone gets tapped out. Market can stay irrational lot longer than one can stay solvent. So we just have to accept the volatility and live with it, it seems.
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