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doggusfluffy
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Gerasimental
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Perhaps Musk could put his 600 million to use before making his quarterly tax payment.
Jigar was co-founder and the first CEO of Sunedison (assuming the Jigar above is that Jigar, which is likely) and did/does a lot of the first innovative clean energy financing including PPA.
Since I mostly don't like the effect of PPA on residential solar, I say "burn the witch"
But SCTY bulls should be simpatico.
Jigar is good to follow for his clean energy perspectives.
Since I mostly don't like the effect of PPA on residential solar, I say "burn the witch"
But SCTY bulls should be simpatico. Jigar is good to follow for his clean energy perspectives.
Sorry to disappoint. I am not Jigar Shah.
Sorry. But you could substitute. Just criticize utilities a lot.
Ok, not really Solar City, but since NV Energy's PUC decision put the squeeze on solar in Nevada.
MGM Resorts to leave Nevada Power, pay $86.9M exit fee
MGM Resorts to leave Nevada Power, pay $86.9M exit fee
TheTalkingMule
Distributed Energy Enthusiast
That is hugely relevant to SCTY. They may very well replace NV Energy as MGM's energy provider. Bold move, really highlights the hot mess Nevada has become.
Brand value hypothesis. I buy that for Tesla, but solar panels are perceived differently; they're becoming such a commodity I don't believe SCTY has much brand value. SunPower has some brand value due to their many-year record of "most efficient commercially available panels".
After customers don't need to be "educated" about solar and sales costs drop industry-wide... does SCTY have a cost advantage on installs? I actually can't tell. Maybe, maybe not. Their panels are not currently the cheapest per watt in the industry, though the theory is that the Silevo factory is supposed to change that... but of course it isn't actually running yet. Their racking costs are totally obscured at this point, and I see no way of identifying them any more. They have no known advantages in installation procedure or design (maybe they have an advantage but I don't know of one) and they have a disadvantage in permitting (local installers have an advantage in permitting).
This is where I am. SCTY could be undervalued by a factor of 100 or overvalued by a factor of 100 and I really do not believe that I can tell from the information available to the public.
That tells you where sales costs have to end up. Germany has higher labor costs than the US -- and worse sunlight, so the inherent value of the panels is lower. Arguably the feed-in tarriff made panels more of a "no brainer" there than here, but dropping module prices will make panels a no-brainer here too soon enough. There's absolutely no reason for the US sales costs to be higher than they are in Germany, long term.
Can SCTY compete in that environment?
It's worth remembering that SolarCity is immediately monetizing all its future cash flows. This means they don't have much tangible book value. This is not like Tesla, where the huge factories have an inherent value. Theoretically the Silevo factory will have such value if it ever gets going.
SolarCity is not just a bet on residential solar. Residential solar does compete directly with utility solar, and tends to be more expensive. But residential solar adds the extra value of self-control, ownership, etc., and people pay a premium for that. A huge premium. People want some grid-independence, even if it's not perfect, and will pay a lot for it.
Unfortunately, SolarCity's PPA model *removes* all those benefits; anyone paying the premium for a certain amount of grid-independence does not want a PPA, they want outright ownership. SolarCity seems to be a bet on very specific financing models. I do not think those financing models are sustainable. A residential PPA will turn out to be more expensive than buying your power from a utility solar farm (which is actually pretty close to what I am *already doing*), and contains none of the "I control it myself" features.
The other motivation for the PPAs is monetizing the ITC for those who can't use it directly, but this is a temporary phenomenon driven by the tax code and will become irrelevant in a few years.
When you eliminate the PPAs, I don't think SolarCity has an advantage in the straight-up sales market; it looks like they lose money there, actually.
No, they're not. Obviously they have to advertise numbers below the current local grid price... but those are first-year prices SolarCity includes a 2.9% annual escalator in their PPAs, so it's very likely they'll end up being higher than utility prices within a couple of years. There's no reason to expect utility rates to escalate that fast given the installation of utility-scale solar, and in fact my utility rates haven't gone up in 7 years. You can get a non-escalator PPA but they'll quote you more than the local grid price, as least in the parts of the country with fairly low grid prices (California and Hawaii are another matter).
We separated generation from distribution in NY over ten years ago. So this is not what happens here. Grid prices have stayed constant, because the grid charges for transmission, and I can buy my generation from whatever utility solar farm I like.
You're describing a situation in PA where *utility solar* has been artificially hobbled by a vertically integrated utility which is cross-subsidizing its old fossil and nuclear plants out of the amounts customers are paying for grid access (transmission & distribution). I think the utility solar lobby is strong enough that this situation is not going to persist, especially since we've already gotten rid of it in several states.
Residential solar will be competing with utility solar.
Now, I think there's a strong and permanent market for "own your own" residential solar, particularly with batteries -- the product being demanded here is grid-independence, resilience against the regular blackouts, a way to say "go to hell" to the utility company. People will pay huge premiums for that, and it can be twice as expensive as utility solar and still sell very well. But SolarCity has no competitive edge in that, at least not yet.
While this is true, a rash of stories of customers who are locked into way-above-market prices for years would certainly put some hurt on SolarCity's reputation and make it hard for them to get new customers.
Yes, customers are likely to continue paying their PPAs -- just like they pay their mortgages -- even if they're underwater. But they'll be *bitter* about it.
Meanwhile, SolarCity has already monetized all those future income streams from the existing PPAs by securitization. So that income is already accounted for and spent. Sure, the investors in the Special Purpose Vehicles backed by the PPAs will get their money from the bitter and angry customers.
But what happens to SolarCity at that point? With a reputation as the "price-gouging" company which saddled all these people with overpriced electricity while promising zero down... do they really get more customers, or do customers go to the competition?
Obviously, if the Silevo factory in Buffalo is churning out solar panels which are significantly cheaper per-watt than all of the competition while being very efficient, none of this will matter. But if it's not, I don't see SolarCity having an advantage in the *highly competitive* solar market.
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MGM Resorts, Wynn planning to leave NV Energy
Both the MGM and Wynn to leave NV Energy.
Industries become disrupted when their business models are disrupted. This could happen much quicker than many expect.
Both the MGM and Wynn to leave NV Energy.
Industries become disrupted when their business models are disrupted. This could happen much quicker than many expect.
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