SolarCity (SCTY)

[renim]

Thanks. What you posted is big bad negative for SCTY actually. Per jhm's credible math, SolarCity prices their systems at about $4.26/watt or thereabouts. With the kind of pricing/competition you are talking about from local installers, SolarCity can't even dare to put a foot in the market.

SolarCity's cost of capital, even the asset-backed ones, is more expensive than a typical homeowner taking a home-equity loan or folding into the existing mortgage through refinancing... It gets lots worse when we look at SolarCity cost of capital with non-asset-backed financing is involved(hopefully the need for this will go away once they get to cash-flow-neutral state).

In any case, homeowners are lot better off buying their systems outright from local installers, at least to the extent that you are seeing.

This gravitates my thoughts about solarcity, local installers are so much more cost efficient, in my country the federal government solar roof subsidy is based upon KW capacity, not install cost. The end result was that local installer were far better value than national branded installers, for example (numbers plucked from ass, not real)
government rebate of $5,000 for a system of X kW.
local installer was $6,500 gross - $5,000 (grant) = $1,500 for end buyer
branded national installer was $10,000 gross - $5,000(grant) = $5,000 for end buyer
so instead of being 30% cheaper, it was 300% cheaper.

while the figures are arbitrary, the result was in my case a 3 year payback for my PV array:smile:

back to solarcity, I think JHM is missing the forest by looking at the trees.
Utility solar farms tend to be both much cheaper, and tracked
2 results,
a) higher % of grid PV is possible with tracked solar, as it continues production much later into the afternoon than fixed solar, it is both less reliant on batteries yet more compatible with batteries than fixed solar.
b) every dollar spent on Feed in Tariff is a dollar not spent on utility solar, in Nevada's case, each kWh on feed in tariff was removing a future deployment of 2.7 kWh of Utility solar. This may be an artifact of Nevada's pre-existing laws, but it is the reality feeding into the Nevada decision.

Nevada utilities can now buy solar at 3.87c /kWH http://pucweb1.state.nv.us/PDF/AxImages/DOCKETS_2015_THRU_PRESENT/2015-7/3615.pdf

which really sets the current market price for solar in Nevada. This will continue to decrease, why burn the general publics electricity rates with expensive feed in tariffs, when utility solar farms do the same for about 1/3 the price? (or conversely get 3 x times more energy for the same cost)

build enough utility solar and the midday electricity becomes the new off off peak, similar to how Texas wind results in negative tariff sometimes at night.

build enough roof mount solar and the midday electricity becomes the new off off peak

what happens then?

 

[TheTalkingMule]

Thanks. What you posted is big bad negative for SCTY actually. Per jhm's credible math, SolarCity prices their systems at about $4.26/watt or thereabouts. With the kind of pricing/competition you are talking about from local installers, SolarCity can't even dare to put a foot in the market.

SolarCity's cost of capital, even the asset-backed ones, is more expensive than a typical homeowner taking a home-equity loan or folding into the existing mortgage through refinancing... It gets lots worse when we look at SolarCity cost of capital with non-asset-backed financing is involved(hopefully the need for this will go away once they get to cash-flow-neutral state).

In any case, homeowners are lot better off buying their systems outright from local installers, at least to the extent that you are seeing.

No. The value proposition of SCTY is about ease of integration. Yes, you and I would likely never buy a SCTY PPA, but we are not all people. More than half the marketplace will never want to deal with tax credits, roof leaks, brand selection, maintenance, warranty issues, monitoring, install design,etc... Most people will find the idea of a simply signing up and paying less than the grid appealing. They don't want to be involved like we do and see the premium of an SCTY PPA as a bargain.

The prices I quoted above are a good $.60 lower than a quote I got last spring from the very same installer. Things are changing rapidly and SCTY is staying out in front of it. Once they trim their sales costs their installs cost will drop from $1.92 to something like $1.50. At that point they'll be unstoppable. And there's no reason they can't also just leverage their premium brand to move more towards 50% straight cash installs, charge a 10-20% premium and make a killing. These guys are Apple, not LG.

 

[ggies07]

Lazard has a bias against solar. They put up levelized cost estimates that are well above existing PPAs and other actual offers solar. This simply proves that they are making different assumptions than those who actually build and market these systems. So I would not trust them to get battery assumptions right either.

The key to batteries is to integrate them into other energy systems for maximal effect. Free standing batteries is a dumb idea. Batteries are more about adding capacity, flexibility and reliability than delivering kWh. So the concept of a levelized cost of storage per kWh is too limited to capture the full value. For example, the value of shaving peak demand charges has little to do with the cost per kWh. It's the savings per kW reduction in demand charges. Whether that peak kW shaved required just 1 kWh in a month or 60 kWh in a month makes little difference. In either case, a power Powerwall at a cost of $30/month could help you avoid about 2 kW or $40/month here in GA. So the net benefit is $10/month. The levelized cost of storage is pretty much irrelevant to this net benefit, and yet that same battery could also be storing surplus solar with a 2c/kWh feed in tariff, and using it to offset buying power at 12 c/kWh . The net 10c/kWh maybe adds another $10/month in net benefits after peak shaving pays for the battery. Even here the idea of levelized cost misses the point. The total monthly benefit is about $50 and cost $30.

Another key point is that a battery need not be a fixed cost. It really may be best to lease a battery for short periods of time. Suppose you put up a 8kW solar system and are unsure if one or two Powerwalls would be optimal for your specific situation. Suppose you have a battery lease that let's you cancel at anytime for a small fee. So you put up 2 Powerwalls and monitor performance. Suppose after a year you found that the level of use and benefit was sufficient to keep one but not two. So you have SolarCity take the second one. They put it reinstall it somewhere else where it could create more value than at your home. The small removal fee just covers the cost of removal for SolarCity. So SolarCity loses no value in this exchange, and it has two customers who are happily optimizing their net benefits. This sort of flexibility is particularly helpful for dealing with rate plan changes. For example, if you began with high demand charges, and the utility reduces the rate on demand charges, you may not need so much battery any more. There really is no need to sit on an underutilized battery. And this redeployability is fairly unique among energy assets.

Oh...I guess I read that all wrong then. Thanks for the clarification.

 

[gavine]

Tracked solar has an added cost of maintenance. Moving parts break. Solarcity can make more revenue using tracked solar on houses, but they realized the cost of maintenance outweighs the advantages, at least in a distributed scenario. Perhaps a tracked solar farm is less expensive to maintain than distributed?

 

[Foghat]

This gravitates my thoughts about solarcity, local installers are so much more cost efficient, in my country the federal government solar roof subsidy is based upon KW capacity, not install cost. The end result was that local installer were far better value than national branded installers, for example (numbers plucked from ass, not real)
government rebate of $5,000 for a system of X kW.
local installer was $6,500 gross - $5,000 (grant) = $1,500 for end buyer
branded national installer was $10,000 gross - $5,000(grant) = $5,000 for end buyer
so instead of being 30% cheaper, it was 300% cheaper.

while the figures are arbitrary, the result was in my case a 3 year payback for my PV array:smile:

back to solarcity, I think JHM is missing the forest by looking at the trees.
Utility solar farms tend to be both much cheaper, and tracked
2 results,
a) higher % of grid PV is possible with tracked solar, as it continues production much later into the afternoon than fixed solar, it is both less reliant on batteries yet more compatible with batteries than fixed solar.
b) every dollar spent on Feed in Tariff is a dollar not spent on utility solar, in Nevada's case, each kWh on feed in tariff was removing a future deployment of 2.7 kWh of Utility solar. This may be an artifact of Nevada's pre-existing laws, but it is the reality feeding into the Nevada decision.

Nevada utilities can now buy solar at 3.87c /kWH http://pucweb1.state.nv.us/PDF/AxImages/DOCKETS_2015_THRU_PRESENT/2015-7/3615.pdf

which really sets the current market price for solar in Nevada. This will continue to decrease, why burn the general publics electricity rates with expensive feed in tariffs, when utility solar farms do the same for about 1/3 the price? (or conversely get 3 x times more energy for the same cost)

build enough utility solar and the midday electricity becomes the new off off peak, similar to how Texas wind results in negative tariff sometimes at night.

build enough roof mount solar and the midday electricity becomes the new off off peak

what happens then?

where do I start here...

Utility scale solar is wholesale. Rooftop solar is retail. Utility scale has to use the transmission and distribution system to get to an end user, the retail customer. Roof top solar does not. It is local at the place of need. Utility solar is centralized. If a power outage goes out, the utility solar is worthless. Just this past week, NV Energy has had over 5 power outages. Thousands of people were out of power for many hours at a time. Utility solar was not providing energy to anyone. Nor was any other centralized fossil fuel plants either. Distributed energy resources such as solar (and soon powerwall) changes this fundamental problem almost instantly. The savings from having this increased reliability in Nevada is significant. Just this alone. there are many many other values as many of us on this thread have discussed so please refer to the history of this thread.

The bottomline is distributed energy resources have far far more value(as well as future value) for retail customers and the grid at large. It's not to say we don't need utility level solar, just at the end of the day, a distributed centric grid is far better for energy infrastructure and all energy users.

Just look at what is happening with New York's entire grid right now and you'll understand the reality a little better. It's almost the exact opposite of is going on in Nevada right now.

 

[Ocelot]

where do I start here...

Utility scale solar is wholesale. Rooftop solar is retail. Utility scale has to use the transmission and distribution system to get to an end user, the retail customer. Roof top solar does not. It is local at the place of need. Utility solar is centralized. If a power outage goes out, the utility solar is worthless. Just this past week, NV Energy has had over 5 power outages. Thousands of people were out of power for many hours at a time. Utility solar was not providing energy to anyone. Nor was any other centralized fossil fuel plants either. Distributed energy resources such as solar (and soon powerwall) changes this fundamental problem almost instantly. The savings from having this increased reliability in Nevada is significant. Just this alone. there are many many other values as many of us on this thread have discussed so please refer to the history of this thread.

The bottomline is distributed energy resources have far far more value(as well as future value) for retail customers and the grid at large. It's not to say we don't need utility level solar, just at the end of the day, a distributed centric grid is far better for energy infrastructure and all energy users.

Just look at what is happening with New York's entire grid right now and you'll understand the reality a little better. It's almost the exact opposite of is going on in Nevada right now.

While by no means an expert, I would like to add, I remember reading a while back (probably in this thread) about the importance of distributed solar/energy in terms of national security, which is an angle I am sure the federal government has thought lots about.

 

[blakegallagher]

Solar Cell With Interdigitated Back Contact (Solarcity)

Solar City has a new patent that had to do with cell production. It's over my head but glad to see the r n d paying off. Would love to hear of a new cell/module record soon

 

[jhm]

No. The value proposition of SCTY is about ease of integration. Yes, you and I would likely never buy a SCTY PPA, but we are not all people. More than half the marketplace will never want to deal with tax credits, roof leaks, brand selection, maintenance, warranty issues, monitoring, install design,etc... Most people will find the idea of a simply signing up and paying less than the grid appealing. They don't want to be involved like we do and see the premium of an SCTY PPA as a bargain.

The prices I quoted above are a good $.60 lower than a quote I got last spring from the very same installer. Things are changing rapidly and SCTY is staying out in front of it. Once they trim their sales costs their installs cost will drop from $1.92 to something like $1.50. At that point they'll be unstoppable. And there's no reason they can't also just leverage their premium brand to move more towards 50% straight cash installs, charge a 10-20% premium and make a killing. These guys are Apple, not LG.

Another thing here is that local contractors will change their bid based on how busy they are. This installer is robably much hungrier for work in January than they were in the spring. Same thing happens if you are trying to get you house painted. Consequently, there will be plenty of anecdotes of local installers offering low bids. The competitiveness comes down to how little the installer is willing to make when they are desparate for work and how willing they are to use the cheapest components.

A solar service provider is not going to install the cheapest component. When they offer a PPA, that system needs to perform very well for 30 years or the PPA provider eats the loss due to faulty equipment or faulty installation. On the other hand, there is an economic argument for going with the cheapest system you can get even if it craps out in under 20 years. You can roll the dice will lower quality and trust that when you do need to repair or upgrade, that new systems will be much cheaper. A cheap system at $2.5/W that is only good for 12 years may actually be better than a system at $4/W that is good for 30 years. But I think the deeper issue here is trust. If you really trust your local installer to do a great job, to not damage your roof or cause other damage, and to fully stand behind their work, then that can be a great way to go.

I honestly think there is plenty of room in this market for all sorts of installers. SolarCity has about 35% of the residential market, and small installers have about 50% of the market. Moreover, the rooftop market is growing faster than utility solar and wind. So obviously small installers are doing something right and making lots of homeowners happy. There is not one business model that must dominate the whole industry.

 

[jhm]

Hadley signs agreement with SolarCity, company building Hampshire College solar array | masslive.com

SolarCity gets another commercial deal. I do get the impression that the commercial segment is picking up pace.

Renim, you may want to consider that commercial installations like this have comparable scale efficiencies as utility solar. In this case there are 18 acres of ground mount, but also with large flatroofs SolarCity is obtaining efficiencies close to utility scale. All distributed solar minimize demands placed on the transmission and distribution networks and fundamentally change the relationship of customers with utilities. So over the next 20 years this customer will be able to save $500k, while the utilty will avoid costs to upgrade distribution infrastructure and generation capacity. While this may make the utility less profitable, it does hold down costs for all ratepayers.

I have no complaint with utility solar. My complaint is with a very expensive grid that is primarily designed to flow one way from producers to consumers. It is much more efficient to have a multiway grid that only has to move surplus power. For example, when most consumers generator the majority of their energy and many people have a home battery, then a much lighterweight grid will suffice. Only a fraction of power will need to be distributed, and because batteries are everywhere the power just moves when it is cheapest to do so. There is virtually no need for peak power generation, as baseload plants can replenish batteries when aggregate stored energy runs too low. Currently, the average retail rate is about 13c per kWh. Of this 6c is generation, 3c transmission and 4c distribution. The lightweight grid I envision coud cut transmission to 1c and distribution to 3c. Moreover, since most of the energy is redistributed surplus not needing peakers, generation falls to 3c. This is how retail goes from 13c/kWh to 7c/kWh. Meanwhile, the cost of residential solar + storage also falls to about 6c/kWh. Naturally, in this scenario the utilies lose alot of revenue, unless they also figure out how to tap new markets like transportation via electric vehicle charging. My frustration with the utilities is that they put way more energy into trying to protect bau profits than into the innovation to deliver power at 7c/kWh to residential ratepayers. This, by the way, is the average rate for industrial ratepayers so it is entirely plausible. But it is not possible to do through cheap centralized generation alone. This is the fallacy of the utility solar is cheaper than residential solar meme. The network costs of the existing grid are already at 7c/kWh. So you've absolutely got to cut network costs, unless you've got magic for zero cost generation. Moreover, the key to generation cost as low as 3c/kWh is mostly trading in surplus power. Fossil fuel and nuclear power plants cant go this low and remain profitable. Surplus power is not burdened with having to be profitable. Distributed energy owners generate power firstly for self-consumption. If they have a surplus, they simply want to offset some of the cost of their energy systems. So this is brutally cheap, but there is no problem with negative prices because there is sufficient charging fleet of distributed batteries and vehicles to soak up power as spot prices fall. So if utilities were to embrace competition and set aside monopoly status, thks js where they could go. They could keep pace with residential solar offering rates that are within 1c/kWh of what rooftop solar can offer. But to do this, they have to cut their network costs and the cost of providing peak power. If they want to justify a 10% profit margin, they need to cut costs at least 6% every year, and they need to leverage distributed power and storage to do that.

 

[Foghat]

Wow. This is the best interview I've heard yet on the Nevada situation.

audioBoom: 1/11 Hour 1 Bryan Miller, Senior VP of Public Policy Power Markets for Sunrun about the solar decision from PUC

I really really hope Bryan Miller (sunrun guy interviewed) gets as much air time as he can. He's a fantastic speaker and very sharp legal mind. All I can say is Nevada PUC/Sandavol are in for some tremendous hurt if this goes to court.

 

[Foghat]

Solar For Homeowners - YouTube

Ha, this is a net metering video made by NV Energy in July 2015 that is going to fry NV Energy in court. They promoted net metering, no mention of net metering changes and even suggest a payback period of 13 years for a $20k system. They also recommend talking to solar contractors(like Solarcity) for actual savings and costs.

bait and switch case is hard to deny.

Like I said before the intent is not to win, but to delay...

 

[The Blue Owl]

Wow. This is the best interview I've heard yet on the Nevada situation.

audioBoom: 1/11 Hour 1 Bryan Miller, Senior VP of Public Policy Power Markets for Sunrun about the solar decision from PUC

I really really hope Bryan Miller (sunrun guy interviewed) gets as much air time as he can. He's a fantastic speaker and very sharp legal mind. All I can say is Nevada PUC/Sandavol are in for some tremendous hurt if this goes to court.

Miller is indeed very eloquent. I'd like to see Ralston interview him. He didn't hesitate for a second to call the whole mess the result of political corruption. He called out the PUC, the governor, and the unholy influence of Berkshire. Lyndon Rive didn't want to go there, probably because he didn't want to be seen as having a political agenda.

I don't see how the current mess could stand. I think the incumbents and their political allies overplayed their hand with the ridiculous feed-in price and especially by not grandfathering existing customers. It's almost like they couldn't restrain themselves and wanted to slap the hippies hard to teach them a lesson. This thing is now becoming a bit too hot to not have any political consequences.

 

[gene]

Solar For Homeowners - YouTube

Ha, this is a net metering video made by NV Energy in July 2015 that is going to fry NV Energy in court. They promoted net metering, no mention of net metering changes and even suggest a payback period of 13 years for a $20k system. They also recommend talking to solar contractors(like Solarcity) for actual savings and costs.

bait and switch case is hard to deny.

Like I said before the intent is not to win, but to delay...

This video is very incriminating of NV Energy. I hope they don't remove it from their youtube channel. Is there a way to copy it before it vanishes?

I just forwarded this video to a good contact at Solarcity and to Brain Miller of Sunrun. Just in case these guys have not noticed the video yet.

 

[The Blue Owl]

This video is very incriminating of NV Energy. I hope they don't remove it from their youtube channel. Is there a way to copy it before it vanishes?

There is (this is a link).

 

[Far Left Texas]

Ha, this is a net metering video made by NV Energy in July 2015 that is going to fry NV Energy in court.

If you don't have time to watch the entire video, at least watch from 22:10 to 23:00 where the speaker waxes eloquently on how NV Energy will pay you cold, hard cash (actually a check payable to you or the installer) if you install a solar system. And the bigger the system you install the bigger the check NVE will write! I would guess that grandfathering will be reinstated toot-sweet. And there's no way that NVE's rate case request wasn't already in the works when this video was uploaded.

I hope they don't remove it from their youtube channel. Is there a way to copy it before it vanishes?

Keepvid-dot-com (I'm too new to post links here) downloaded it to my desktop with no software installation in just a couple of minutes.

 

[TheTalkingMule]

I honestly think there is plenty of room in this market for all sorts of installers. SolarCity has about 35% of the residential market, and small installers have about 50% of the market. Moreover, the rooftop market is growing faster than utility solar and wind. So obviously small installers are doing something right and making lots of homeowners happy. There is not one business model that must dominate the whole industry.

Yes. People need to change their perception of solar as some kind of niche operator. Somewhere between a few and all of your neighbors will be interacting very deeply with solar installers over the next 10 years, the idea that one solution or one product will be best for all is just silly.

I've mentioned before that I used to HATE the SolarCity model. The idea that you would do anything other than buy cheap quality panels under warranty and get them installed cheaply was against my entire being. In trying to convince some friends to go solar it become pretty obvious that a streamlined solution was the only way that most of them would ever go solar. Even if I offered to buy the panels, climb up on their roof, and call the electrician.....they weren't interested.

I don't see any way SCTY doesn't have half the upper middle class+ folks market 2-5 years from now. They have all the things those folks MUST have in order to sign. The idea that a local installer is going to move the majority of these guys to install(at least outside CA in the short term)......it's just not happening. How do you get people paying 9 cents a kWh in methane Pennsylvania to switch? Make it beyond easy. Cost is secondary to these people in the first place and SolarCity is offering a product that requires just a signature and will save you money. Candidly....if one of the kids or the wife is pressuring you on solar, which option is the easiest solution? That sounds a bit crude, but it's the conversations I've been seeing.

There's a product for everyone.

 

[Lessmog]

This video is very incriminating of NV Energy. I hope they don't remove it from their youtube channel. Is there a way to copy it before it vanishes?

I just forwarded this video to a good contact at Solarcity and to Brain Miller of Sunrun. Just in case these guys have not noticed the video yet.

I hope you addressed it to the brain spelled Bryan ... seems to be his name. :wink:

I dl'd the video thanks to the tip from FLT; thanks again!

The publisher's comment on Youtube reads (also saved for posterity's sake) from where I'm sitting:

Publicerades den 7 juli 2015

Thinking of installing solar for your home or business? NV Energy welcomes your interest in customer-generated electricity also called distributed generation. We want to help reduce your energy bill — and your carbon footprint — with solar and renewable energy. Our goal is to make the process of connecting to our system easy to understand while protecting the safety, reliability and operability of the electric grid. Go to https://nvenergy.com/solar/ for more information.

• Kategori

  • Vetenskap och teknik

• Licens

  • Standardlicens för YouTube

 

[gene]

I hope you addressed it to the brain spelled Bryan ... seems to be his name. :wink:

Thank you for pointing out my misspelling, I will resend it.

 

[gavine]

Maybe Nevada is doing this as a precursor to help Tesla sell Powerwalls and ensure the success of the gigafactory. It seems to me that this situation makes the Powerwall even more of a no brainer in NV.

 

[The Blue Owl]

SolarCity (and to an extent, even Tesla) have a lot to learn from Uber when it comes to throwing down with the establishment via grassroots campaigning and expert political warfare. I dislike many aspects of what they do as a company, but I have to admit they are really effective.

Uber pulled off a spectacular political coup and hardly anyone noticed