results are out -
http://files.shareholder.com/downlo...larCity_1Q15_Earnings_Presentation_FINAL2.pdf - stock seems to be reacting positively.
Bah spoke too soon. down again
I sure was hoping that they would announce 2016 targets. I guess with a new CFO that certainly was up in the air. I love their new value metric of Unlevered Retained Value. *hoping for 2016 guidance please.
Conference call Just started: I will try to blog important questions. Lyndon Going over details now but they seem pretty close to what is on the slides so far.
Installed a Commercial Project in 3 days instead of the 20 It would have taken without their new commercial mounting hardware (tonga Talking)
They expect to see results from commercial in q3 and q4.
5-10 years SCTY will install a battery by default on all solar installs.
The backup generator market is actually bigger than solar with around 3-5 percent residential penetration (peter talking I think)
Next year SCTY will offer 0 down off grid in Hawaii but peter thinks going off grid is the result of bad policy and should never be needed with good policy.
Brad Buss
Nailling down 2016 Financing Now. New 500 million aggregation facility is much more flexible. Get to draw down cash at installation which is 90 days faster than currently
Will soon have all off their offering be investment grade but can not talk much about it because their new ABS is close to being completed.
Q1 deployments expected to generate 11 percent ROI over life of contract. In one year the projects deployed this quarter will generate cash of 5 Million on projects deployed .
Net retained value- Old retained value-all debt = new net retained value.
Currently sitting on 2.7 billion - If they stopped booking contracts at end of quarter the net cash flows after paying off debt would be worth 2.7 billion to equity markets.
Targeting 180 MW q2 installation which will be a record.
2nd half of 2015 will have a significant MW deployment ramp.
Q&A session.
Q1. Patrick (credit susse) Congrats on quarter thanks for the new metrics very helpful. How should we think about the evoulution of those numbers the 11 percent Ir giving the geogrphic mix of q2,
We are not looking to forecast that right now (b.buss)
How should we htink of the hurdle rate for entering new rates, on arizona have they offset your growth plans or are new markets going to offset that.
When we look at new markets we look at the economic value for the region. It needs to be cash flow positive on day one.
Commercial IRR will be in the 20 percent range
In arizona we are not growing and have moved some of our operations to other states. We are suing snp right now for them using their monopoly strength to kill the market, Once that is cleared up we will move back into that market but right now we are allocating those resources to other regions.l
Brian lee Goldman sachs
Kudos on new metrics, How will the debt cost assumptions with your 4.5 percent change, (missed first part of question)
brad,
wow alot of questions , again I dont want to forcast these metrics.
Lyndon You can pick some of it up off the Retained value if the retained value is going up the IRR should be going up so that is something you can look at in the future but we dont want to forcast it.
brad, on the 4.5 percent we feel it is very conservative as every 6 months we have seen our financing cost drop it is really our cost and cost of financing that we our outpacing our competitors and I think that will continue to be the case.
Goldman, Follow on volumes if you can talk about your operation capacity and how it has grown I think you had targeted 1 gig by the end of the year how is that coming , He thought they might have guided higher on q2 to hit numbers.
Lyndon - let me clarify that it is not 1 gig residential it is 920-1 gig commercial and residential
tonga- On commercial things are tracking nicely I think we will see a lot of progress on q3 and q4 based on where projects are now.
On residential you dont want to scale to quickly ahead of when you need to because you increase you cost but we have great formulas that help us predict the time we need to hire installers so they are ready to be trained in time to install the projects and we are very confident on how this process works.
Questions form roth
What were MW deployed in q1,
143, you can always find that in the ~tables
When can you make a distribution to investors due to your billy bad ass financing ( my words)
Brad buss, I have a dream , No , with the growth rate we have we will plow all money back into the company for the forseable future in my view.
Chris(BOA) Hi thanks, I ahve a couple, First on CA, Now that they are collapsing the tiers some of your earliest customers might be underwater based on new rates and escalators.
most of our ca pricing is in the 15/c pricing so historically we are protected from these type of changes.
Lyndon- This is actually the second time in 3 years they have changed the rate structure,
q. Given the troble you have seen in arizona and the international markets do you plan on expanding sooner rather than later,
Lyndon- We are actually very bullish on US market and see afuture where the grid is two way and consumers are providing a service to the utilities, Arizona is challenging for us because they are doing what ever they can to prevent consumers from benefiting from solar, In markets like that we will fight the fight, having said that we have been thinking about expanding internally in the next year or two ( he jokes they have said that for 8 years)
No urgency to expand internationally , just to be clear we are offering micro grids overseas,
Duece bank. You talk about this 5k battery system , when do you think you can offer a system for customer in the US market for base load storage,
Sorry I dont think I understand your question,
What price point do you need to see for a broader adoption of storage to release it beyond just a backup,
a. I think the market structures have to evlovle, Demand response, time of use , I think the economics are kind of their now if the right market constructs in place.
lyndon, There is a great blog post peter right that I recommend everyone read that there is no incentive for the Utilties to want distributed solar and the real way they make money is new capacity,
Peter. I will say our battery demand has been way beyond expectation
question (something about mypower)
Bookings are much higher in Mypower right now then installs because of how long it takes the backlog to filter through.
q. Robert baird,
Looks like a large portions of the 1.07 a watt is coming from renewal years, can you break down the 1.07 on the original contract vs renewal,
Brad, Its not a number we are looking to seperate but we are thinking that value roughl comes to 2/3 for contracts and 1/3 for renewall.
q. will you get grandfathered in for net metering laws, or is it state by state.
lyndon, Yes we will be grandfathered in , Peter, well it has been state by state but so far all have been grandfathered,
question (new person ) Of the 920-1000 deployment this year how much will be commerical.
lyndon it has always been around an 80-20 and we expect the commercial to be in the low teens.
question (Could not tell)
question , last question on myupower , since you guys have launced the product have you seen more competition on the loan side of it are you seeing competitors do the same.
Lyndon they strategy has never been to lead by financials , Our focus is differentiating cost and services but that being said we are not seeing much competition with mypower.
Question about yield co , I am going to stop this because the questions have lost quality along with my typing .. I will clean this up a little later.
