1/1/2015
guest albeit smaller than the mega-plants. SPWR like companies that can do both. They are recently moving a little into SCTY turf as well�
1/1/2015
guest I think that the bulk of the retained value gain is coming from cheaper financing. I know that SPWR said that a 1% reduction in interest rates would increase their retained value by $0.40/W from $1.75/W to $2.15/W.
So I imagine the higher retained value number is coming from SCTY's ability to issue ABS at ~4.5% interest rates.
So as long as SCTY is the only one getting such great interest rates then it will be a great deal for SCTY. They are essentially a bank: borrowing money at 4% and then lending it out (via a LEASE or PPA) at 12%. This is a great deal for them. Going off topic a bit, banks trade at roughly 1x book value, so if SCTY continues this "banking" model then you can throw out your 3x book value assumptions in valuing SCTY. If banks trade at 1x book value and utilities trade at 2x book value, then SCTY as a hybrid utility/bank company should trade at 1.5x BV in the future when the high growth period ends and normalizes around 10% per year. But I digress...
Once again, if SCTY is the only one issuing these ABS then it is a great stock, but if others are able to replicate this same ABS model (or similar crowdfunding, etc.) then margins will contract in the future and so would retained value.�
1/1/2015
guest good point.
when would you project that growth v. commodity-service line to cross-peak?
Given where we are in Solar DG with challenges remaining re: battery combo systems etc., it might be some time before SCTY becomes a JPM multiple. I would be inclined to sell TSLA before it becomes the next GM as well, so I'm guessing you believe the transition to occur fairly rapidly for SCTY? Could be right, financing is an easier nut to crack. The risk I guess is whether SCTY can build the brand faster than others. I agreed that is definitely a risk�
1/1/2015
guest I was asking for your opinion about other women taking risks of purchasing panels vs. leasing. I wasn't asking if you leased or paid for your system. That's great you paid for your system. I would buy one as well but I don't mind the hassle if it does eventually break down. Out of the first 10 women that come to mind, I do not believe any of them would buy a system if they were single.
The gender comment came up when I was saying that leasing is far from dead. Most of the men commenting strongly against leasing vs. buying were obviously not women. I would love to hear more opinions from any ladies reading these posts.
My step-mother actually retired from Detroit Edison. She actually repaired meters at your home. There is no way she would buy a system. She would lease it. She wants nothing to do with any maintenance or risks with buying something like this even though she's very familiar with electrical components.�
1/1/2015
guest a) The potential market size is so abnormally big and growing I have a hard time seeing solarcity coming into competitive pressure and going into lower margins. If anything they are the ones putting pressure on the competition by taking ever increasing market share!!
Feeling threatened by potential competition is the most far fetched idea really.
b) SCTY becoming JPM? Jesus!!
Even after hitting their 1mil customer target by 2018, which is 10X growth from now, they would still be holding only 4.3% market share counting only existing buildings in the 14 states they service!!
What about new buildings, What about other states, What about other countries. The opportunity is many orders of magnitude larger than where scty is now. This company could be growing for next 30 years and it might still not be done!
c) Just like P/E is usually a function of growth, P/B is simply a function of growth (in book value per share).
Utilities get P/B of 2 because they grow at a rate of 2% per annum. S&P gets 3 (2.7 to be more precise) because it grows bookvalue/share at 6.5% per annum.
So when scty is growing at 10% rate, it still deserves a P/B higher than S&P.�
1/1/2015
guest Obviously I'm one of the 'first 10 women that come to mind' when I thought about your question, so I think I'm a valid data point for this discussion. And since I'm single, you now know of one single woman who would buy a system (vs. lease). I know two other single women who have purchased, one woman (married) who leased.
I wanted to eliminate my power bill, not just reduce it. Leasing a system didn't let me reach that goal, so that option was a non-starter right from the beginning. Maintenance of the system was not the primary decision driver, pay off point was. I will be fully retired within 5 years and am actively eliminating expenses. Solar was an easy choice.�
1/1/2015
guest Another solar question - sorry, just trying to get every detail down. Should I get a little bigger system if I plan to get an EV in the future? I not only want to eliminate my electricity bill as much as possible, but want the EV charging to be offset as well. But since EV charging is at night, does it matter?
Thanks!�
1/1/2015
guest SPWR is trying to do everything - panel manufacturing, residential, commercial, utility-scale, all over the world, etc. I'd much rather prefer a CSIQ which IMO has a more disciplined/focused approach (build out the manufacturing capacity and then go big into utility-scale plants).
That said, SCTY remains the most focused on the existing highest margin in the residential/commercial solar industry (customer acquisition, financing, design, permitting, installation, follow-up products/referrals, etc). There's risk that these margins contract in the future but that risk can be largely outweighed if they can continue executing on their growth/expansion plans - both domestically and internationally. And also, they'll likely continue their vertical integration in a more thorough, faster and efficient manner than anybody else.�
1/1/2015
guest Yes, it matters. You want enough excess in the day to offset what you use in the evening. In my case, the excess I need to produce is smaller than what I need at night (for car or anything else), because I earn more for what I feed into the grid during the day and pay less for what I take out at night. I actively try to avoid using any power during peak hours and have shifted a lot of usage to the off-peak times.�
1/1/2015
guest Thanks for the info!�
1/1/2015
guest SCTY does not resemble a bank or any other kind of lending institution. They are more of a utility than a bank. They will never be in a position they are only growing by 10% a year until the point of near saturation in solar which is 20 years away. How does borrowing money to purchase solar panels to put on a roof = banking? It's not even close. The risk is taken on by the investors at 4.5%. SCTY isn't investing, they are borrowing. SCTY is the middleman who is also a servicer. A utility is buying natgas and then distributing electricity and servicing the lines. SCTY services the panels. Luckily the sun is free and that's why the utilities are trying to keep SCTY away from their lines. They do not want that solar energy fed back into the grid. They are earning a premium after generating electricity. The states cap what the utilities can charge. If everyone starts using panels then the electric company has to charge higher rates for the shrinking amount of electricity they are supplying. The problem is the price is capped so they can't raise pricing fast enough to cover maintenance of the lines. That is why they are lobbying to get rid of netmetering.�
1/1/2015
guest Single Female Data Point here. If I ever get around to buying a home, I plan to buy my solar system (with battery storage).
Happy Wednesday!�
1/1/2015
guest Or, no it doesn't matter. Ggies07, you're in TX but Bonnie is in CA so the true answer to your question may depend on your utility company and the supply pattern to your house. In my case (here in FL) I don't get cheaper electricity at night, it costs me the same all 24 hours of the day which means it makes no difference cost-wise what time I charge the cars. My solar system produces enough power during daylight hours to fulfill all our needs (cars included) 24/7; so obviously we have a net metering system whereby we over produce during daylight hours and every day the meter ticks backwards until the sun goes down and then it clicks forwards again. At the end of the year I want to come out as close to a net zero as possible.
Whether you use the TOU (time of use) rate will ultimately depend on what your powerco offers and you may need to do some individual calculations as I did. A good solar installer will sit down with you and work that out looking at your usage patterns etc.
Final BTW, I charge both cars at night at different times simply to keep total load to a minimum; extra cautious on safety, if you like. During the day there's A/C, washing machines, dryers, oven, pool pumps etc. running at various times.�
1/1/2015
guest Interesting. ..thanks for more info!�
1/1/2015
guest Here is an interesting blog post by Peter Rive:
Put Battery Storage in the Hands of Grid Operators�
1/1/2015
guest Not true everywhere. Here in FL our powerco has been running regular lotteries offering big incentives to residential customers and businesses to install PV systems. I'll explain in simple terms: Power demand has been increasing and the local monopoly has an obligation to supply, but the step cost to serve new customers is massive (build a new power plant); ergo, it makes sense for the powerco to persuade customers to install PV and it's even cost effective for them to incentivize customers to do it.
This is one area that I think SCTY is missing out on. I talked to them last year about my plans for our system but they told me they were focusing on states where (state!) incentives were available and there are none in FL. Florida has a horrible history when it comes to state incentives, they promised them in the past but then never funded the program so that thousands of folks were left without their rebate checks. These days no-one I know trusts our state lawmakers but I do know dozens of folks who have installed PV with incentives from our powerco.....business is booming for FL installers but SCTY isn't here.�
1/1/2015
guest Definitely interesting blog post.
It reminds me of what's going on in Hawaii. For those who aren't aware, it's quite fascinating:
A Solar Boom So Successful, It's Been Halted - Scientific American�
1/1/2015
guest If people really start to think about this, they will see Solarcity a little bit different... Maybe a lot different. Key is networked stationary storage. We will all see some utilities change their tune soon because it just makes good business sense. Instead of the utilities complaining of "cost shifting" they will be praising "cost savings" of PV+storage. And, Solarcity will be maybe the only one to benefit for a while...
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I've recently read that Solarcity will expand to new states soon. They will accept lower margins and thus lower retained value by going to these states, however, the cumulative retained value growth will grow substantially by doing so. Maybe Florida is one of these states to be included.
also, when Solarcity begins to expand into new markets, will this affect how wall street values it? I think so, IMO. I think there are going to be a few different catalyst that will open some eyes to the real potential of Solarcity as an energy/utility hybrid company down the line here.�
1/1/2015
guest Seems almost criminal for Solar City not to be in the Sunshine State
I can see where SCTY would like to push the battery storage to the grid ops. But frankly given the path of battery cost coupled with panel/efficiencies now over-producing in daytime by an increasing margin/$- they're fighting their own expansion rate with that argument.
NigelM- for you're own situation, what circumstances of cost would persuade a battery added in lieu of net-metering? i.e. If net metering went away due to load balancing issues, or was reduced dramatically (as some states have proposed)�
1/1/2015
guest They sell the service angle, but i have installed 5 systems, oldest is 10 years. Other than a broken panel because someone backed into it with a tractor, there has been no service necessary whatsoever.�
1/1/2015
guest This is a very politically correct blog post.
But if battery technology becomes economically feasible, then I say screw the grid and I am going off the grid ASAP.
I will then install a rain collection system and for good measure dig a well that runs on a solar pump for irrigation water to grow my own organic garden.
The only cable that I will need to run to my house will be Google Fiber, although by then we might see super fast over the air internet.�
1/1/2015
guest Party at Sleepy's -- unlimited water, electricity and kale chips?
I can't wait to go off the electric grid myself. Probably why I won't lease a system.�
1/1/2015
guest It still fascinates me to this day how some people can divorce Solarcity from tesla enthusiasm when the same person (Elon) champions/promotes both with equal weight in achieving a sustainable future. CTO JB Straubel says the success of stationary energy storage with Solarcity brings success to Tesla motors by way of producing more batteries and thus reducing battery costs. JB said himself that energy storage through Solarcity is at a point where it's finally economically feasible for the consumer(demand logic press release) and excited by this milestone moment. Most of Elon's talks include discussions on Solarcity and solar. He is even on record that he thinks Solarcity might become bigger than Tesla.
With such endorsements, wouldn't it be a natural extension to be interested in solarcity's success as it is apart of the grand strategy of everything mr. Musk represents and aspires to achieve? I fail to see how there can be such a disconnect. Solarcity is a big part of Tesla's future.
this CPUC decision is very very significant. Half of all residential PV installs in the US were in California last year. Elon says he would like to see a sizable roll out of storage by late 2014 or early 2015 at the latest. With this decision, we might see that roll out start happening this summer. I think once The California utilities start seeing the network effect they will flip over backward from its massive potential. Remember the big problem with utilities and mass solar is the inability to aggregate all the PV systems. Networked storage solves that. This is big big big. Now it's just nailin down the economic model. Lyndon rive just put together a team solely dedicated to do that very thing.�
1/1/2015
guest Not sure if that was directed towards me, but I'm most definitely assuredly positively hoping for all of Elon's current ventures to succeed, including Solar City, as long as they are on a responsible path that does not overcharge people to get into renewable power. I personally might like to buy a solar system, not lease it, because I will probably sell my house within a few years and would not want a solar lease to complicate the affair. I would likely be happy to buy something from Elon someday if the price was competitive. Currently, my tiny urban roof isn't big enough to power my home. But yes, I would like Solar City to do well as long as they are advancing the end of fossil fuels in the best way possible.
More than that, I want electric power to be provided to everyone everywhere free of charge as directly from the sun as possible, and have that electricity completely and totally replace man-made combustion on this planet. So, eventually, I would like SolarCity and all privately-owned utility companies to die, because power should be a public good, paid for with taxes, run by and owned by the people, directly. Private ownership of utilities is a very inefficient way to do deliver them, which is why so many regulations exist to make them pseudo-public without being all the way public. Water, sewer, power, health care, armies, roads, infrastructure -- these things should all be public goods in my opinion.
Finally, although I want them to succeed, I still don't view Solar City's business as the world-altering no-brainer investment that is Tesla Motors, so I will probably not put my investment dollars there anytime soon.�
1/1/2015
guest Completely agree.
Here is an interesting article about Mosaic, who is using crowdfunding and giving out loans to RGSE customers to buy solar systems at 4.99% interest. These are the early stages of the solar financing revolution, and even though SCTY is a first mover in this arena, there aren't really any sustainable long-term first mover advantages for being the first to issue an ABS.
http://finance.yahoo.com/news/why-neighbors-finance-solar-panels-120000907.html
For those of you that were senselessly arguing with me that an owned solar system does not add any value to a house, that article has a link (in its last paragraph) that shows a Berkeley study that says that a house with a solar system sells for $17k more than one without a solar system:
http://newscenter.lbl.gov/news-releases/2011/04/21/bright-spot-for-solar/
Be careful SCTY investors when reading through this thread, some here make up their own "facts" to continue pushing their agenda.�
1/1/2015
guest Just FTR, I paid for my system using a LOC through my bank at 1.4%. Although I rarely use credit, at that level I would have been stupid not to.�
1/1/2015
guest I got a 3% loan to finance my solar system.
In the link to that youtube video that Citizen-T posted in the alternative energy thread Admirals Bank had 3.xx% - 5.xx% interest rates for solar loans.�
1/1/2015
guest I got my LOC prior to winning the rebate lottery, but I think what we're seeing is that (relatively) cheap money is available for residential PV. That's good news for all installers, including SCTY.�
1/1/2015
guest I can also point to similar studies on variety of topics that is against common sense. Like Global warming, Tesla and Yes, buying vs Leasing.
Doesn't mean the studies are correct. Doesn't mean they are "FACTS".
Essentially, it seems you have an agenda. I am just trying to offer counter arguments. Like I said, previously, I am currently not invested in anything (neither TSLA nor SCTY nor anything else), Just waiting for my Tesla to be delivered on May 3rd.
Regarding value, I did say previously that it increases the value of house, whether it is lease, prepay lease or owned. In states like NJ, MD and PA, The owned system's house will increase lot compared to other leases. In other states, The difference will be negligible, specially between Prepay and Owned. Only way for this to settle will be for 3 neighbors with similar houses to put their houses on market. One without Panels, One with Prepay Lease and One which has owned. I guarantee that, difference between 2nd and 3rd house will be minimal and between 1st and 3rd house will be no where near 17000.�
1/1/2015
guest This was probably mentioned before but am I right in assuming that with their lease agreements SCTY retains the right to the SRECs?
That's likely another positive for them but also an argument for the consumer of larger systems to buy rather than lease.
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P.S. I'm putting my moderator hat on and asking that we leave out accusations of personal agenda etc. Next time around the whole lot will get moved to quarantine regardless of how valuable the rest of the posts are. You've been warned.�
1/1/2015
guest I think we're kicking around a headline number (the $0.03/kWh) without digging into details. If I figure out my net cost post rebates/tax credits and then work out the kWh cost over 20 years I come out to $0.0099/kWh and that doesn't account for any SRECs I might be able to sell. Less than $0.01 is no more valid a headline number than $0.03 because nobody would see the detail behind it.�
1/1/2015
guest Mod Note: I promised.....�
1/1/2015
guest NigelM, I agree with your comment that detail is important to discern actual cost/watt. Each contract is different with various subsidies from utilities and government alike. It appears difficult to present a boilerplate price as representative of all others given this type of market environment. I think if someone comes up with a website that aggregates all residential PV companies for consumers to compare/contrast offerings that could be helpful. Let me know if I've miss such a site that currently exists.�
1/1/2015
guest Here is a post of mine that got moved to another thread, but I thought is very important to show
http://www.solarcity.com/residential/solar-lease.aspx
For a typical 3-bedroom home with a current electricity bill of $200 per month, we might recommend a medium sized 4 kW solar system.
Your new solar system will generate enough electricity to offset what you are currently paying to the utility company from $200 down to $60 per month.
Your SolarLease payment would be $0 down and $110 per month. So you could actually save $30 per month from day one.
For those who don't know a 4 kW system will generate on average 400kWh - 500kWh per month. Now I am going to be very generous and use 600kWh for my assumption since it could be a sunny state such as Hawaii:
$110/600kWh = $0.18/kWh
This is an example taken directly from SCTY's website. If they were actually leasing systems for $0.03/kWh then don't you think that they would advertise that more to get people to sign up? Instead they give an example where the cost is $0.18/kWh. Since SCTY claims that it will save you $140/month off your bill, then they are using $0.23/kWh for the local electricity rate using my 600kWh estimate. Since these numbers are high, I would imagine that they are probably using an example for Hawaii.
I think from their presentations they said that avg. lease deal they give is around $0.12 - $0.14/kWh (can't recall exact number, but I am pretty sure it is in that range).�
1/1/2015
guest Right,
For NJ, MD and PA, Solarcity keeps the SREC.
And like I said, It is correct that for those 3 states, if you are planning to stay in your house for long time, It is far better to own the system. Heck, my Father In Law asked me for an advice on lease vs prepay lease and buying and also about the which panels to buy and Solarcity deals. Since, he is not going anywhere from his house, I asked him to buy the system and asked him to get SunPower panels (Just like sleepyhead) or if he waits few months, he might get cheaper and better panels then sunpower from Trina, Thought that is not guaranteed yet.
Is Trina Solar Trying to Beat SunPower at Its Own Game?
�
1/1/2015
guest From the article you linked:
However, the company just announced what it's calling High Efficiency Honey Ultra, a module that purportedly has a 24.4% efficiency rating. Considering that its current panels operate at around 16% efficiency, and SunPower's industry-leading panels are closer to 21% -- almost 32% more power output per panel than Trina's -- this could be a remarkable breakthrough for the company, if it could translate that module efficiency to a panel efficiency near 20%.
This guy has completely no idea what he is talking about. I think that The Motley Fool should be completely embarrassed for letting this fool write this article about solar panels. He is completely clueless, and there are more errors in that one paragraph than I can count (I did not read the rest of the article though):
1. Module and panel is the exact same thing. The author does not understand this.
2. The High Efficiency Honey Ultra module that TSL just created is a p-type mono module that was created in a lab under perfect conditions to break some meaningless record for p-type panels. I estimate that the module had roughly ~20% efficiency, but the actual production module of the exact same module will have roughly 17% - 18% efficiency at best.
3. The 24.4% that he is referring to is a cell that uses IBC technology (Interdigitated back contact solar cells). This IBC cell is completely different than the p-type mono cell used in the Honey Ultra Modules. The 24.4% has nothing to do with the Honey ultra module. This author is mixing up two completely different technologies.
There are very few people in this world that actually have a relatively good grasp of the solar industry. Most of the people that write about solar do not understand it at all. Most of the people that work in the solar industry do not understand it all. Most of the people in the utility industry do not understand it at all.
The solar industry is completely misunderstood and it will take a few years before people actually start getting it. Fortunately for us solar demand is growing so strong that people will need to start understanding it better in a very short period of time, because it is going to grow out of control and that is dangerous without understanding consequences.�
1/1/2015
guest Need an SCTY short term thread.. Anyway news today:
SolarCity Corp Recommences Connecting Energy Storage Systems�
1/1/2015
guest Sleepyhead - my question was missed yesterday. For those that buy, what happens with the utility that you are signed on with when their rates go up every year vs. a fixed rate for 20 years with Solarcity. Does it matter? Does the solar system produce enough energy that even with increases over the years you will always come out even or ahead?�
1/1/2015
guest If you have a net metering set-up your power produced and used is measured in units and only the net surplus/deficit at the end of the year is refunded/charged at whatever the prevailing rates are. In other words, as the rates from your powerco increase then so does the value of the power your solar system produces. If you get the calculations right you'll always come out even (although there is some degradation of panel performance over the years) and provided your power consumption doesn't increase. Leasing at a fixed rate might cost more in the long run but it also gives peace of mind to many folks.�
1/1/2015
guest Here is info directly from a SCTY presentation:
You can find it here:http://investors.solarcity.com/events.cfm
It is an up to date presentation. So we know that SCTY's avg. rate is $0.141/kWh.
It is not a very attractive rate like the $0.03 or $0.08/kWH being thrown around here.
�
1/1/2015
guest Sleepyhead,
Thanks for your thoughts on that article. To be fair to author, though, he/she also is skeptical of this new panels from Trina (Hence I said "not guaranteed yet") and advices to stay with SPWR (Though article is more for the stock)..
I certainly didn't know about p-type and IBC.. off to google to learn about it.
Thanks again.�
1/1/2015
guest See what NigelM said, but just know that any state can just pull the net metering plug at any time and then you are screwed.
California guaranteed net metering for 20 years with it's recent law change, but other states can do what they want. You will then need battery storage.
You are getting screwed whether you buy or lease. But it would be easier to sell your house with a paid for system than a lease if net metering goes away.
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Sorry for my font in the previous post, but I can't edit it�
1/1/2015
guest Ggies07 (and anyone else), take a look at this very easy to search Database of State Incentives for Renewables and Efficiency (DISRE) for state by state rules, programs and laws.�
1/1/2015
guest That is what current energy companies are charging.. Not Solarcity..
�
1/1/2015
guest NigelM, great site...�
1/1/2015
guest You might be right, because it is poorly worded.
But I think that the slide says the we charge $0.141/kWh blended average cost, and that 377,000GWh of electricity gets sold in the US each year at a price above $0.141 (and the rest is sold below that price), so that is an addressable market.
That is how I understand it, I am fairly certain that is what they are saying here. But like I said it is poorly worded and I might be wrong.�
1/1/2015
guest Thanks guys! Yeah, I was just thinking if I bought a certain size system now, that in 10-20 years with the increases from utility if it would still be a benefit compared to leasing and locking in that rate.�
1/1/2015
guest Net metering will change. It's just a matter of how and what new form it will take. The original design didn't take into account millions of homes going solar. Thus far, Solarcity is seemingly the only one aggressively pursuing a new "net metering"business model(for a lack of a better term) with PV+networked energy storage. If anyone out there can provide me with another company equally moving forward like Solarcity, please let me know...�
1/1/2015
guest So if net metering goes away in the future, all that surplus energy that is produced does not go to your account and therefore you pay what? Only the amount of energy you use off the panels + the utility fee? So it's not a benefit anymore then? Well, I mean it is yes, you are still getting energy from the sun, just not at a better deal.�
1/1/2015
guest Right now if you pay $0.12/kWh then the utility pays you the same $0.12 for what you send out to the grid with net metering. Without net metering, they might pay you at wholesale energy prices of ~$0.05/kWh or avoided fuel cost at $0.03/kWh or maybe nothing. It is hard to say.
Net metering is like having free battery storage. But if it goes away and you have to install battery storage, then it is an extra cost for you. I would gladly go off the grid if I could, because utilities and politicians are going to try to screw us on solar anyway they can:
http://thinkprogress.org/climate/2014/04/16/3427392/oklahoma-fee-solar-wind/�
1/1/2015
guest Net metering will change, not necessarily go away. It is going to evolve. I think storage will create the ability for you as the owner/leasee to sell your stored energy in addition to your day time production. The grid has problems with the uncontrolled surging and tapering of solar, so storage could really benefit this area. Also, I've read that only about 10% of grid energy produced is used by the end user, so redirected distributed stored energy could really up this percentage significantly.
bottom line, net metering will evolve, retail rates will be adjusted, energy storage will be at the center of it all, IMO.�
1/1/2015
guest oh, i see. So if it ever went away or change, then you would still pay nothing for your electricity bills because of the panels, it's just that you would not get any extra back.
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I see. Yeah, I remember someone else on hear saying net metering was not the best option, but some other form of payment, can't remember. What happens to people who are leasing panels, but can't afford a battery storage system?......Will there be no negative impact, they just won't reap the benefits like others that will have them?�
1/1/2015
guest No, that is not true that your bill would be $0. The only reason your bill is $0 (for illustration purposes) is because if you use 1000kWh and produce 1000kWh, it gets netted via net metering leading to $0 bill.
But if you generate all 1000kWh in the day (duh!) and lets say you use 0kWh during the day, but use 1000kWh all during the night then without net metering your solar panels are doing you absolutely no favor at all and the grid gets to keep all generated electricity for free.
With net metering you are paying 0.12, but the grid is paying you 0.12 as well for what you generate, so it offsets leading to $0 bill.
But if they take away net metering, and pay you $0.06/kWh instead then you are buying 1000kWh*0.12 = $120, while they are paying you 1000*0.06 = $60. So your bill is now $60 even though you generated 1000kWh and used the same amount.�
1/1/2015
guest Solarcity is developing a $0 PV+storage lease for residential. This is their optimal product. They are already doing it with their commercial demand logic product. Again, it will be important to keep our ears open on results and further developments in the q1 conf call, or q2 conf call. Remember, Elon said in his Amsterdam talk he is looking for late 2014/early 2015 for a ramped up energy storage roll out. Since this CPUC decision came so suddenly, might be earlier... Just going to have to see...
it it is interesting to note that Elon's energy storage ramp objective coincides with the 18650 Panasonic agreement ramp projections for 2014....�
1/1/2015
guest ooh, now I'm starting understand. Thanks! Well, I really don't know what to do on buying vs leasing. All you have given great arguments for both sides. My wife does not want to sign a 20 year contract nor take out a loan from the bank. I told her then I guess we use one of her bonuses at the end of the year after the tax deduction and she is still hesitant. haha. I've told her all I've learned from here, she is just being tricky me thinks!
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Interesting.....�
1/1/2015
guest You could go off grid with your PV+storage. That will be an option. However, probably forgo the utility back up if you need more energy, also possibly forgo being able to sell PV and storage energy you don't use. Just going to have to see how Solarcity develops this since they will most likely be the first to do it. Also have to remember Solarcity could approach all utilities with their networked solar solution, sort of like a capacity builder/engineer for utilities to become more efficient agile companies. So need to imagine the same utility structure just Solarcity might be the single thread to connect them all. Then things get really interesting....�
1/1/2015
guest Does any one have a reference to the current market breakdown between leases vs purchases?
I know for scty it's 90%+ vs <10%. I am curious to know what the overall market split is. or even better what the market split is in the 14 states that solar city services in.�
1/1/2015
guest Watch this video, replace internet with networked energy storage and you might come to a similar conclusion where Solarcity is heading in the long run...
Elon Musk: How the Internet is Changing Humanity - YouTube
@HenryF, I don't think anyone releases that split. However, in general terms, the top two residential companies(Solarcity,vivint) are lease/ppa heavy... But, that probably didn't help you at all(sorry!). It would be great if someone secretly knows and would share that info here�
1/1/2015
guest This video has a thorough analysis of lease vs own debate in an overall market perspective.
It's from GTM Solar Summit 2014.
Solar Summit 2014: Opportunities and Threats in the Residential Solar Market, Recorded on 4/16/14 GreentechMedia on USTREAM. Conference�
1/1/2015
guest Here are all the videos to this year's Solar Summit. I think the video that shows up first is not one of solarcity's session, so you might have to explore videos to get to the "solar is mainstream" session...
Solar Summit 2014: GTM Research: Surveying the LatAm Solar Landscape, Recorded on 4/16/14 GreentechMedia on USTREAM. Conference�
1/1/2015
guest Going off grid is a LOT more expensive for the vast majority of people than purchasing an extra 25-100 KWh of batteries, which for me would only cover 2 very cold & cloudy days. If I were to truly go off grid I would likely need double the solar panels (far more than my annual usage, and larger than my roof) in addition to at least 100 KWh of battery back up. The issue for much of the country is that when you need power the most in the dead of winter, solar production reaches a minimum due to short days and heavy cloud cover. Below is a graph of my solar production for the first 7 months. While I produced more than I used in October and November, in December, January and February I ran a deficit of 1801 KWh. Now I am making more than I need and I am "banking" over 220 KWh/month. By June I should have a credit of nearly 1000 KWh to carry me through the summer as I predict in summer my usage will likely be above production during peak AC loads. The only way I can see getting trough winter is to roughly double my solar array and I do not have that much extra space and if I did that I would end up dumping power during the fall and spring. My connection fee to the grid is $7.21/month. That is relatively inexpensive compared to the cost of batteries and extra panels one would need to fully cover one's needs and be off grid.
�
1/1/2015
guest Interesting. There needs to be a way to connect to the grid such that you only use it when you run out and the grid can't detect your connection in any way. So you never provide to the grid (so no net metering) but if you need you use from the grid.�
1/1/2015
guest Here is a panel discussion on SolarWorld's trade dispute.
Assessing the Impact of the U.S.-China Solar Trade Case, Recorded on 4/15/14 GreentechMedia on USTREAM. Conference
Key takeaway: In most cases shouldn't have too much impact on DG market. Can be devastating to utility scale projects if things go in solarworld's favor.�
1/1/2015
guest HenryF, great discussions at that Solar Summit. Pretty much every issue we talk about here, but probably much more informed! I'm learning a lot sifting through them in my free time.
What I Learned About SolarCity's Business Model by Becoming a Customer (SCTY)
this article should fire up some own vs. lease/ppa, specifically Solarcity pre-paid ppa discussion. Also, the comments are pretty lively and informative as well.�
1/1/2015
guest
Thanks for the vid, great info and I'm checking out others....it seems like when we drill down to the first step in all of this is that people need to get on solar. I'm starting to see it doesn't matter how it's done, buying, leasing, or PPAs. People on here are on one side or the other, but most importantly after watching this video, people inside the industry see that it's going to be multiple ways of getting solar to people.
Thanks for the article and I didn't know it was Elon's idea for PPAs:
�
1/1/2015
guest An FYI post. a friend of mine works for BOA. They had a presentation from Circuit City a couple days ago he was telling me about. BOA is giving employees incentives to sign up for solar.
During the presentation my friend indicates Solar City indicated they will be charging 'roughly' 0.07 cents/KW hour. They presented as 'lease only' option�
1/1/2015
guest This is just a marketing fluff piece that is most likely orchestrated and paid for by SolarCity. The author doesn't actually own any SCTY (even though he does have positions in TSLA). But more importantly if you actually read the article carefully, by paying attention to the choice of words, you will see that it appears that the author did not sign the PPA with SCTY and he did NOT put the SolarCity system on his roof.
Other notes:
The author uses ~30,000kWh of energy per year, but the SCTY system will only get him 8,000kWh. If you look at the pictures, you can see that the reason is that his semi-southern facing roof is constrained and that is the maximum amount of panels that they can fit (25x250W=6.25kW). In his situation, he needs to go with a SPWR system and can get ~9kW system using X-series panels; and even about 8.3kW using older E-series panels. And you will get more production per nameplate capacity from SPWR as well. Where cheaper Chinese panels might do 1.4kWh (for some hyptothetical geographic area) per year per stated Watt, a SPWR panel might do 1.5kWh per year per stated Watt. And that spread gets a lot wider with degradation over time.
I would not be surprised to find out that this guy actually went with a SPWR system himself, because it would make a lot more sense in his case. But, I digress...
He recommends the pre-paid lease, and coincidentally it is the option that benefits SolarCity the most financially since they don't have to raise more capital, debt, or sign loan agreements with banks.
He says that the pre-paid lease is more beneficial then buying, because HE IS ONLY COMPARING THE BUY PRICE THAT SCTY OFFERED HIM! This just proves my point that SCTY will price the buy price such that it is not the best option to buy and makes the leases/PPA's look more attractive. SCTY is offering him roughly $4/W, when a local installer can probably do the exact same system for about $2.70/W.
Some of his numbers don't add up either, e.g. he says that the buy price is $15k after $9k federal credit. But $9k out of $24k is 37.5% and not 30%. So I assume that he lives in an area that has a $2k rebate for such system and then he gets 30% on remainder or roughly $7k in tax credit.
Now lets do the math using a local installer at $2.70/W:
6.25kW*$2.70 = $16,875
Subtract $2k rebate (these are most always done using system size and not cost) = $14,875
Tax Credit = 30% * $14,875 = ~4,500
So you can buy the exact same system for $10k or you can sign a 20-year pre-paid lease for $10k; both upfront payments.
When you buy the system, you have a life expectancy of 30 - 35 years (quoting Lyndon rive here) or you can lease the system for the same price for only 20 years.
I think that it is a pretty easy decision...
Still not impressed with this blatant SolarCity marketing add by Motley Fool.�
1/1/2015
guest S
So what do I do this time of year? As I have been able to "bank" 550 KWh from my Feb 17th low. That is a a lot of battery capacity of I were to store it all.�
1/1/2015
guest Thats what solarcity's aiming to help customers do in the future... Sell excess to the utilities at To-be-determined "retail" rate, as well as, buy energy energy from other local PV storage owners/leaseesfor the cheapest rate... It will be the new net metering for post/reduced subsidy future... I think this is what CFO Bob Kelly was referring to when he said Solarcity "4.0" as being the evolutionary end state...�
1/1/2015
guest
For someone who has electric heating, it will be tough to go off the grid any time soon, but it will happen in the future; although it will take a little longer. If you have gas heating, then it is a lot easier. But even with electric heating, here in Texas it will not be a problem at all; it just depends on geography.
Some time in the future, maybe 10, 15, or 20 years from now, you will be able to install a solar system on your roof for about $1.50/W and battery costs will be $100/kWh (about 8 years from now according to Elon). So, lets say that you can get a battery storage system installed for $150/kWh.
You can install a 10kW solar system and 100kWh battery system for $15k each or $30k total. So, without any government subsidies if you expect this system to last 20 years then you are paying roughly $120/month for all of your electricity needs.
Not everyone will be able to move off the grid, but for those who will have that option it becomes a no-brainer. As more people move off the grid, electricity prices will go up for others, which will lead to more people going off the grid; creating a utility death spiral.
BTW, there are very easy ways to lower your electricity usage: switch out all light bulbs to LED, insulate your home better, turn off the lights when you are not in the room, etc.�
1/1/2015
guest The more I listen to Solarcity talk about their methods,the more I see how they are trying to tailor their products toward specific consumer bases. Chris Tan in this video makes it clear they are developing lease for middle income (ie 50k) buyers that are on a tight budget, low disposable income, that would like to reduce their operational costs with minimal risk. He said if they develop a product that addresses this market, they can open a much bigger market segment then previously available... He said about 50 million homes. The market for ownership is big, but this market group seems key to mass adoption, therefore, important to develop a product aimed specifically to meet their needs.
Solar City talks sun! - YouTube
also, in this video, I see a continuation of solarcity's specificity in targeting particular market segments. In this clip, he says retirees that want to go solar don't necessarily benefit from ITC, so lease turns out to be best... Also, Solarcity turns away customers if they don't meet criteria, which means to me they see the market being so vast, they can be very particular with whom they engage and still compound growth... That bodes well for all solar companies since others can tailor their services to a specific group Solarcity doesn't and still see tremendous growth, like $0 down loans... Seems to be enough for everyone to succeed...�
1/1/2015
guest That was my suggestion for when net metering goes away.�
1/1/2015
guest Just curious, could Solarcity get into the Chinese energy market? Tesla currently making a splash, superchargers expected to be in the hundreds... Could Solarcity work its way in there too? DG grid management related to energy storage could be their core service/business working with Chinese module manufacturers and local utilities. Even if a fantasy, still fascinating possibility.�
1/1/2015
guest Electricity is very cheap in China. Solarcity first needs to get to states with no subsidies in the US.�
1/1/2015
guest Right, first develop PV+storage network here, scale it, show profit, etc... If they do this could almost represent the demonstration article to the rest of the world it is viable. I'm throwing a wild number out there, but could be there in about 4 years, right as the gigafactory ramping, as well as, china factory getting finished... Timing seems right on many levels...
update: Chinese power might be cheap, but it's super dirty... Main reason they are pushing so hard to go electric and solar right now... Is it better to do dirty, or invest a little more in near term and do clean?�
1/1/2015
guest Posted this in Long Term thread but I think this specifically relates to Solars and SolarCity as well, as Natural Gas is considered a cheaper alternative to Solar.
Is the U.S. Shale Boom Going Bust? - Bloomberg View�
1/1/2015
guest We're all about uncovering new methods for improving performancePlant Engineering
"The SunSpec-developed process has been used in one deal that involved packaging $54 million worth of power purchase agreements into bonds that were sold on the open market. The company offering those securities, Solar City, is paying investors 4.5% interest on its notes, which is roughly two percentage points less than it normally paid to borrow capital.
That two percentage point rate reduction is expected to cut roughly 50 cent per Watt off the cost of producing solar energy. That should, in turn, result in a lower cost of power to the end consumer."
interesting to know that ABS is projected to drop costs .50/watt... Seems pretty significant if Solarcity continues to offer them every quarter in the future...�
1/1/2015
guest In China, manufacturers themselves are doing utility scale projects. SolarCity can do residential projects but those don't take off until it makes financial sense. I'd really like to see solarcity compete with 11c/kWh power in the US first. This was an interesting find - 92.1% of New Electricity Capacity From Renewables In 1st Quarter of 2014 | CleanTechnica�
1/1/2015
guest It it seems to me the problem is not PV system deployment, especially utility scale in china(or the rest of the world). It's the problem of scaled intermittence stressing the grid. The key solution is storage. Tesla has created a pack that can scale up to utility level storage or scale down to residential storage. Also, in terms of production scale, gigafactory will produce more storage then any other company in the world. Solarcity will become the only company capable of networked storage grid operation. 1+1 gives you a powerful team in the global energy market... Maybe china will be cracked open in a few years as production capacity builds... Wouldn't be surprised if tesla also builds a gigafactory in addition to a manufacturing site there. China wants to have 5 mln electric cars by 2020, might be sooner then later if Model s is a success over 2014... and Solarcity might feel some of the tailwind...
Update: also have to remember, we have no idea what scaled DG looks like, I'm sure millions of inverters out there will create new problems no one could have anticipated, creating a new set of solutions that create new industries... I remember JB Straubel saying power electronics will prove to be a massive industry very soon... Any company that proves scalable efficiencies here will be extremely valuable to the broader market... Back in October JB even gave a brief to Stanford students encouraging them to go into the field, create start ups, etc...�
1/1/2015
guest Benzinga - Actionable Trading Ideas, Real Time News, Financial Insight
Goldman's Brian Lee feels Solarcity will forecast 120-130MWS for Q2, which is pretty aggressive... If that turns out to be the case, then they will crush all high end 2014 estimates, would install way over 525MWs.
i still think they will guide for 98-102MWs, maybe 100-104MWs at highest... Got to set realistic expectations to beat... But, I'd love to proven wrong in this case. This would be a huge jump and significant indicator of potentially over 100% compounded growth by year end if Brian's estimate is accurate.�
1/1/2015
guest YPE Smart Grid Panel Series: The California Grid Under... Tickets, San Francisco - Eventbrite
This should be an interesting panel discussion on Thursday(24APR). Might be a good introduction to how Solarcity will integrate DG storage with the grid...
update: it is interesting to note that solarcity's speaker Ryan Hanley was just working for PG&E 6 months ago doing grid integration with PG&E's speaker... Hmm... Could there be a possible PG&E/Solarcity partnership on the horizon?
How Californias Biggest Solar Utility Is Tackling the Grid Edge Challenge : Greentech Media
Ryan Hanley - working on Smart Grid Tech | US-Ireland Alliance�
1/1/2015
guest http://files.shareholder.com/downloads/SPWR/2953805480x0x747204/9ef07df3-5f08-48d9-837d-31fd6ee1cdc1/Q1_2014_Supplementary_Slides_Final.pdf
Interesting to read Sunpower installed only 11MWs of residential in Q1 and expects to do 95-100MWs in Q2... maybe I'm not reading it right, but that seems like a huge jump in residential numbers. If that's the case, they have shifted a good amount of resources to residential DG... will have to listen to the conf. call to learn more of the details. Exciting to see the big boys competing(Sunpower/Solarcity). Hopefully, most of the residential effort goes to the US, although it looks like they have good momentum in Europe...
update: they intend to grow residential lease "north of 50%" over 2013 numbers... over all google ITC + Sunpower cash investment will give them funds for the next "6-9 months."
I'm not feeling much of focus in the conf. call on residential area... not feeling a big fight with Solarcity on this front right now... just initial impression though... the slides show a big increase in residential, however, not hearing much from the management on the conf. call.
Still listening to the call... I think the CFO just said cash is doing better then lease right now... now the call has ended abruptly... okay... doesn't give me a strong impression on the lease effort... will have to see how competition with Solarcity pans out over the quarter. Really, didn't even talk about their residential outlook slide either... kind of strange after the big google PR yesterday...�
1/1/2015
guest @futureproof Thanks for the updates. Appreciate it. Will check the transcript once it's out on SA. Quite weird that they won't talk about it, after such a big PR splash. From news it wasn't even clear if Google will own the system/lease or if SPWR will.
Google initiative will lease solar panels to consumers�
1/1/2015
guest Ha, I just caught this from the link you posted... Lease payments should be "typically lower" then currently utility payment... Doesn't sound too competive to me, but could be just a real safe statement...
from memory, I think they said on the conf call google will be a tax equity investor(150m) and sunpower is going to investment 100m directly to lease installs... Overall, seems a little bit of a hype job, but who doesn't do that, right? Only hope this doesn't turn into a pump and dump post earnings... Might be a continuation with all solars if this turns out to be the case... Lots of money being made on the way up, lots of money being made on the way down... But over the entire year, should see most come in wih nice long returns...�
1/1/2015
guest They did discuss it in cc see transcript
- - - Updated - - -
I believe he said cash was a better deal for the consumer if they had the cash but they offer both to the customer�
1/1/2015
guest exactly, doesn't sound like they are promoting the big google lease deal in person... Added to which, they give a blah quote of "typically lower" payment quote from HenryF link.. Not much for a consumer to put confidence in... Indicates to me they don't see lease as a growing part of the business, but will do a PR push on it to get in on the popular conversation going around the net... Seemed to have helped push the stock higher, but there all kinds of reasons anyone could point to for the jump yesterday....
also, Google seemed to be competing for earth day sentiment as apple also highlighted its solar power assets over the past few days as they have with this pr of bringing affordable solar to the masses. Everyone benefits by putting this out when they did...�
1/1/2015
guest SunPower CEO: Extremely good Q1 - CNBC
Again, and it's really funny, Werner never once said the word lease, even after the talking heads brought up the google lease deal I think three times... He just said "residential is hot." He also said the company isn't really going to change its strategy, so I'm still holding to they don't think lease will do well for them into the future... This tells me Solarcity won't really be challenged by them in the lease market, which is good for Solarcity.
update: I just watched it again, he did say "lease partners" in his first response...�
1/1/2015
guest disagree. He stated they offer lease or sale. He also said in response to question of why they didn't raise guidance more that they can't book profit right away because of leasing. He also said they would maximize profits to shareholders by either selling leases or holding on to them depending on circunstances�
1/1/2015
guest Interesting Sunpower info....funny though, where I live in Texas, even if I wanted to lease from them, I can't because they don't offer it around here.....�
1/1/2015
guest We must be watching two different videos because I didn't hear him say that... Anyway, after all that was said yesterday, do you really think Sunpower sees leasing as a big part of their future strategy in residential DG? Do they offer any serious competition to Solarcity in the residential lease/ppa market?�
1/1/2015
guest SCTY price compression is like a spring loaded set up... Personally accumulating here again.
Catalysts:
*gigafactory announcement most likely in May/june
*official CPUC storage ruling in a couple weeks
*any Q1 numbers and Q2/YE guidance
*govt investigation results
*storage deployment updates, roll out announcements
*hit 1GW under management (can project numbers more accurately going into 2018)
*traditional utility partnerships
*bigger than $70 mln ABS offering
My feeling is SCTY stock will be north of $100 by FEB2015...
update: SCTY board and executives (including jervetson associated investors) own over 71% of all common stock (as well as own much of TSLA common shares). The float will be very small for a long time to come, so supply and demand in full effect. Again, volatility will be high, but long term appreciation will be significant... Old highs will be new bottom lows as we are currently seeing right now...�
1/1/2015
guest @tslas, been seeing an increase in "referral" social media from individuals and a major light bulb went off... If a whole block pools together and splits the referrals(like you did) then we might see a dramatic increase in lease ppas across solarcity's addressable market as this program expands. Seems like they can either use the money to pay off solar bill for many months or use it for other purposes... Seems like a very attractive value prop. for many home owners... Is this how ypu felt with bringing it up to your neighbors?�
1/1/2015
guest With short interest so high and insider ownership at 71% the short squeeze could be brutal. That's one of the main reasons I bought the stock aggressively when I did back at $33. I wish SCTY would drop more news on us piece by piece each week to keep the shorts at bay. It seems anytime the company is quiet the stock goes down a bit. Installations will increase during the summer and that should get the bulls more motivated to add to positions.�
1/1/2015
guest I appreciate your optimism. But as a general rule SCTY always falls after ER. Here are the price changes on each of the post ER days (starting from the latest):
-5.71%
-16.70%
-10.80%
-12.37%
-14.43%
The issue here is, faster they grow, the bigger the loss they show. As I said many times in this thread, this is due to messed up accounting. Operational Expenses are all recorded in the same period but bulk of the revenues are recognised over 120 quarters! That's a two orders of magnitude difference!!
Market doesn't fully get this. It sees a big loss and screams SELL!!
To make matters worse, this applies to guidance as well. If they increase the guidance in terms of MWs, they will also further lower the already negative eps.
I'm positioning myself to buy even more if it falls after ER. My time frame is 5+ years. This confusion is a tremendous buying opportunity who can see through all this in my opinion.
Keep in mind after several years of growth Operating Expenses will flatten out, while revenues and gross-profits continually go up as they are accumulative of existing contracts and new contracts. There will be a cut off point where there will be no turning back, the eps will continually grow forever almost with never a dip. Think about it, even when new installs come down to literally zero, the eps will be flat but won't dip! This is the end game for solarcity and that is what I'm in for.
That is the timeframe we should be willing to have if we want to invest in scty imho. Otherwise, the stock is just too wild and one could get washed away easily.
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Curious, where did you get the 71% number from?�
1/1/2015
guest I like to look at Solarcity in loss/customer. That number is decreasing. The total loss is only growing because the number of customers are growing very fast. Once they cross over from loss/customer into profit/customer - things will change.�
1/1/2015
guest @HenryF, true, however, a lot of investors already know that since their is 71%+ shares out of circulation for a long time horizon... We all are late to realizing this... PV is only half of the solar equation. Storage completes the circuit sort of speak. Networked PV storage is the endgame that will truly revolutionize the energy industry and Solarcity will right there the whole way. Gotta have vision for this, some don't catch on till it's too late and then ego gets in the way of their better judgement. With the hardcore Elon investors, many shares won't see circulation for many years, so the more that jump on the boat, the less shares out there for a while and we all know what happens then. Elon stocks are more then just stocks to a large investment population out there. His companies are apart of a movement and that's hard for trader/broker/analyst type people to grasp...
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Hit it right on the head... Remember what happened to tsla when Elon rolled out his five part trilogy?�
1/1/2015
guest SolarCity - Definitive Proxy Statement
Go to page 42...�
1/1/2015
guest @futureproof I see about 30% shares owned by Insiders and Jurvetson's fund owning 16%. That makes it 45% outstanding. Curious, where are you seeing 71%?�
1/1/2015
guest @henryf,53mln by execs and board, 15mln by DFJ assoc... 68mln in total. Approx 92mln total shares outstanding... Am I missing something? Just did a quick look so I could be off...
Are you looking at page 42 of the proxy or something else?
update: Rive bros and Elon own over 35% alone... So I'm thinking you didn't get to the proxy numbers yet...�
1/1/2015
guest @futureproof Thanks for the proxy link. I was looking at some tool which has outdated info.�
1/1/2015
guest No problem...�
1/1/2015
guest I wonder if there is any double counting between
John H. N. Fisher (7) --> 14,367,790
Draper Fisher Jurvetson (14) --> 14,967,241
Especially given this:
(7) Includes 7,440,718 shares held of record by Draper Fisher Jurvetson Fund IX, L.P., 70 shares held of record by Draper Fisher Jurvetson Fund IX Partners, L.P., 201,637 shares held of record by Draper Fisher Jurvetson Partners IX, LLC, 1,173,770 shares held of record by Draper Fisher Jurvetson Fund X, L.P., 50 shares held of record by Draper Fisher Jurvetson Fund X Partners, L.P., 35,864 shares held of record by Draper Fisher Jurvetson Partners X, LLC, 5,051,859 shares held of record by Draper Fisher Jurvetson Growth Fund 2006, L.P., 408,429 shares held of record by Draper Fisher Jurvetson Partners Growth Fund 2006, LLC, 53,247 shares held of record by the John H. N. Fisher and Jennifer Caldwell Living Trust dated 1/7/00, as amended and restated on 3/27/08, and 2,146 shares held of record by JHNF Investment LLC. John H. N. Fisher is one of several managing directors of the general partner entities of these funds that directly hold shares and as such Mr. Fisher may be deemed to have voting and investment power with respect to such shares. Mr. Fisher disclaims beneficial ownership with respect to such shares except to the extent of his pecuniary interest therein. The address for all entities above is 2882 Sand Hill Road, Suite 150, Menlo Park, California 94025.
(14) As of November 14, 2013, the reporting date of the most recent Schedule 13D/A filed with the SEC pursuant to the Exchange Act on November 16, 2013, entities associated with Draper Fisher Jurvetson were deemed to have shared voting and dispositive power with respect to 14,967,241 shares. The address of the entities associated with Draper Fisher Jurvetson is 2882 Sand Hill Road, Suite 150, Menlo Park, California 94025.�
1/1/2015
guest HenryF, I'm thinking the DFJ fund is diferrent from entities associated with DFJ...�
1/1/2015
guest Yes�
1/1/2015
guest Henry, I'd love to know if SCTY stock price was ever this close to the 200 day moving average when releasing earnings? I have a feeling as long as the price holds above the 200 day MA the shorts will start bailing. They will get bored and the earnings report could easily make them rush for the exits if it's even remotely positive. We're seeing a lot of negative news out on SCTY with lawsuits and value discussion. We're not seeing good news out of the company lately so this quiet time is keeping the stock down. I see a good ER coming and a short covering rally. With 71% of the stock held by insiders and 23% of it sold short, that spells trouble for the shorts in a big way on any strength, whether news related or ER.�
1/1/2015
guest Here in MA they by default SCTY does get the SRECs. HOWEVER, if you ask nicely, they will quote a system where the customer gets the SRECs.�
1/1/2015
guest Shares Outstanding[SIZE=-1][SUP]5[/SUP][/SIZE]:91.50M
% Held by Insiders[SIZE=-1][SUP]1[/SUP][/SIZE]:73.30%
% Held by Institutions[SIZE=-1][SUP]1[/SUP][/SIZE]:7.60%
Shares Short (as of Mar 31, 2014)[SIZE=-1][SUP]3[/SUP][/SIZE]:10.74M
Short % of Float (as of Mar 31, 2014)[SIZE=-1][SUP]3[/SUP][/SIZE]:49.90%
Short 49%? That can't be right? Holy cow talk about a short squeeze.�
1/1/2015
guest Unlocking Solar Energy's Value as an Asset Class | Alternative Energy Stocks
interesting article about yeildco and securitization. The articles discussion of retained value supports the point HenryF makes about truly understanding the best metrics to assess value and health of Solarcity...�
1/1/2015
guest Retained value is a really bad metric to use to value solar assets: it is garbage in, garbage out.
SUNE sees $0.48 of retained value for generation in years 21-30, but what if the panels don't work that long or degradation is a lot worse?
It seems like companies also use an arbitrary 6% discount rate, but why not 5% or 7%? A 1% change in discount rate will have a huge impact on retained value.
SPWR used to show retained value for its solar lease business as well, but has stopped doing it because it is a garbage metric. And SPWR's retained value per watt is a lot higher than SCTY, so they would have an incentive to use it to show that they are better. But they are coming up with different metrics to show to investors that are not misleading like retained value is.
SUNE builds projects so their projects will still be there after 20 years and producing energy, so their assumptions of retained value in years 21-30 is somewhat realistic.
SCTY on the other hand assumes that after 20-years all lessees will renew their leases with SCTY. This is a completely bogus assumption, because we have no idea what the world, and solar industry will like like in 20 years. If you take away this assumption and use a 7% discount rate instead of 6% then all of a sudden SCTY's retained value is half of what it claims.
Retained value is a just a way to mislead investors. Garbage in, garbage out.�
1/1/2015
guest futureproof - I am going to give you some really good investment advice for your personal benefit, so please don't take this the wrong way:
I think that you should be a little bit more open-minded in the solar sector. You are dangerously looking at everything with your SCTY-colored glasses on. SolarCity is a great company, and I am sure that they will do well in the future and continue to grow. But because Tom Werner, CEO of SunPower, did not use the word 'lease' in his CNBC interview does not mean that SPWR is no competition to SCTY. You are looking for holes, that don't exist, with the sole intent of spinning it into a SCTY positive. I don't think you are doing this intentionally, which makes it all the more dangerous for you as an investor. I would recommend that you look at the whole solar sector with an open mind, because if SCTY were to start falling apart (hypothetically speaking) then I am fairly certain that you would see it as a "buying opportunity" and that you would ride SCTY all the way down to $0.
There is 1 residential market, and it doesn't matter if you do lease, PPA, or cash sale; it is the same thing. Once a solar system goes up on a roof, it is over and that is one less potential customer. 99% of people don't have solar, and 99% of those have no idea if they would want a lease, PPA, or cash sale.
That said, SPWR just raised over $500m in a few short months to do "residential" solar systems. This is obviously all dedicated for leases, because you don't have to raise money to do cash sales, duh!
SPWR also said in their presentation that they will do 420MWp - 450MWp of residential in 2014, and this doesn't include DG or power plants. SCTY on the other hand will do 475MWp - 525MWp in 2014 in total, including DG and other. It doesn't matter if it is lease or cash sale, even though the vast majority will be lease, because it is direct competition to SCTY. SPWR's MWp is a lot more valuable than SCTY's MWp, because SWPR's 420MWp (low end) will produce more energy than SCTY's 525MWp (high end estimate).
Now lets not forget about other competitors: Vivint, Sunrun, RGSE, EON, NRG, other utilities, CSIQ, etc.
Everybody wants a piece of the residential market, because margins are too high and they are going to get squeezed in the future, especially when the 30% tax credit expires in a short 2.5 years.
Therefore, SPWR is going to do more in residential alone than SCTY will do in residential and DG combined in 2014. Then SPWR will do another 800MW in DG and power plants in 2014, and their growth rate is pretty impressive as well (it will double from 1GW to 2GW from 2013 to 2016). SPWR also has some potentially awesome C7 technology in its pocket that can increase growth rates exponentially.
So the real question is why is SPWR a $4.2b market cap, while SCTY is a $5.4b market cap?
IMO SPWR is a far better investment than SCTY, and I would be looking at them for the best risk/reward in solar. I am not saying that SCTY will not outperform them, but the risk is significantly higher in SCTY and they would have to retain what are IMO unsustainable growth rates in order to outperform SPWR as an investment.
This is just my honest opinion.
Good luck to everyone and happy investing!�
1/1/2015
guest VC Steve Jurvetson: Elon Musk is more capable than Steve Jobs was | VentureBeat | Entrepreneur | by Richard Byrne Reilly
Interesting article into the mindset/thoughts of a significant institutional investor in Solarcity... might help to understand the type of people/entities deeply embedded in Elon's ventures...
here's another(Antonio Gracias)...
Why one man invests millions in doughnuts and rocket ships | Voices
and another (JB Straubel)...
Tesla And Solar City Looking To 100% Renewable Grid Future | Inside EVs
and another(Elon himself on IPO day)...
Musk: SolarCity IPO Price Sought Wasn't Aggressive: Video - Bloomberg�
1/1/2015
guest Once again: high short interest does not mean that a short squeeze is imminent. Historically, stocks with high short interest underperform the market in general. This is a fact.
SCTY's short interest was at a record high of 11.3m shares as of trade date 3/10/14 with a stock price above $73. Since then the short interest has gone down to 9.6m as of trade date 4/10/14 and the stock has come crashing down to $55. Once again the shorts were correct in this case, made their money and exited their positions after riding the stock down 30% - 40%.
I have said this about short interest many times before, but when people look at high short interest all they see is an imminent short squeeze coming. Many times before, I warned about high short interest not being a good thing, and SCTY just proves my case here.
Same goes for TSLA: the short interest recently peaked on 2/25/14 with the stock at $248. Since then short interest has declined 20%, while the stock lost more than 20%.
High short interest does not mean that a short squeeze is coming.�
1/1/2015
guest i also believe i saw that spwr had 30,000 leases already. do you know the number for scty?�
1/1/2015
guest Haven't heard any public news on this yet... anyone got anything?
Also, JB Straubel is the keynote speaker at the 2014 Energy Storage Symposium May 21st...
2014 Silicon Valley Energy Storage Symposium
In addition to Solarcity news coming down the pike before then, should be interesting what he's going to highlight reference PV+ storage and the network effect...
And... Solarcity CEO Lyndon Rive and Nancy Pfund (4.6% Solarcity stakeholder) will speak at Fortune Brainstorm Green Conference 19-21May...
2014 Agenda | Fortune Conferences
Both conferences will be about a week after Solarcity's Q1 conf call, so might help keep SCTY in the positive news column going into June shareholder meeting (for all those interested in near term/post-quarterly stock performance).�
1/1/2015
guest I've never understood and have not participated in the Jobs-Musk conclusory of superior dialog. It can only be made from local perspectives. And drawing conclusions of 'capable' diminish one for the other unnecessarily. Elon has and will accomplish objectives Jobs could not; while concurrently Jobs' accomplishments in the use of technology applied to the Arts - Music, Animation, human communication and interaction, self fulfillment, etc. were different goals than Elon and required different (not lesser) skills. I see no point in concluding 'the best athlete' from 2 different sports. Neither man would condone those conclusions as I'm sure one would have equal respect for the other' accomplishments.�
1/1/2015
guest Here come the lawyers again. Same name Pomeranse firm that went after tesla. I think it's wrong advertising for clients by claiming how the target hurt them. I can see advertising the strength of a firm but not by claiming informing potential clients of the how they were hurt by the target without it being proved first. Are they immune to libel claims and damages if they encourage a case and lose? Would only seem fair since there can be damage by reducing share price.
And why are these ads published as stories? They are ads for clients. These firms get free advertising. If a news organization wanted to carry a story about these claims fine but these are just ads written by companies trying to get business�
1/1/2015
guest Thank you Sleepy for your contributions to this thread. I would assume that SCTY provides an incentive to renew the lease in 20 years, otherwise it would be a bit ludicrous to include any value from that. No? Do they really use 6% discount rate to calculate the retained value of the leases? Forgive my lack of experience with economics, but does that strike you as odd when they are almost certainly using a higher rate to determine whether to pursue the lease in the first place? Or doesn't that matter?�
1/1/2015
guest 6% is a fair discount rate and I have nothing against that number; SUNE also uses 6%. My problem is that 5% or 7% are also fair numbers, and if you change the discount rate by 1% then it will change the retained value by 10% - 20% if I had to guess.
Another problem is that 30% of the retained value comes from the assumption that customers will renew leases after 20 years. We don't know how the solar industry will look like in 20 years, so it is impossible to tell whether people will be renewing leases or not.
I think that retained value is not a good way to calculate the value of a watt installed. It is about as useful as a DCF is in valuing a company, i.e. garbage in, garbage out and extremely sensitive to inputs/assumptions.
If you take away the lease renewal assumption and increase the discount rate to 7% then all of a sudden SCTY's $1.50 retained value per watt will go down in half.�
1/1/2015
guest Nice Grid Offers a Glimpse into the Future for Solar PV Plus Energy Storage
a fascinating development in carros, France... The entire town will be run by PV+networked storage...�
1/1/2015
guest Taking another close look at the ownership in the proxy statement:
****
John H. N. Fisher (7) --> 14,367,790
Draper Fisher Jurvetson (14) --> 14,967,241
****
(7)
7,440,718 shares held of record by Draper Fisher Jurvetson Fund IX, L.P.,
70 shares held of record by Draper Fisher Jurvetson Fund IX Partners, L.P.,
201,637 shares held of record by Draper Fisher Jurvetson Partners IX, LLC
1,173,770 shares held of record by Draper Fisher Jurvetson Fund X, L.P.,
50 shares held of record by Draper Fisher Jurvetson Fund X Partners, L.P.,
35,864 shares held of record by Draper Fisher Jurvetson Partners X, LLC,
5,051,859 shares held of record by Draper Fisher Jurvetson Growth Fund 2006, L.P.,
408,429 shares held of record by Draper Fisher Jurvetson Partners Growth Fund 2006, LLC,
53,247 shares held of record by the John H. N. Fisher and Jennifer Caldwell Living Trust
2,146 shares held of record by JHNF Investment LLC.
John H. N. Fisher is one of several managing directors of the general partner entities of these funds that directly hold shares and as such Mr. Fisher may be deemed to have voting and investment power with respect to such shares.
Mr. Fisher disclaims beneficial ownership with respect to such shares except to the extent of his pecuniary interest therein.
The address for all entities above is 2882 Sand Hill Road, Suite 150, Menlo Park, California 94025.
****
(14)
As of November 14, 2013, the reporting date of the most recent Schedule 13D/A filed with the SEC pursuant to the Exchange Act on November 16, 2013, entities associated with Draper Fisher Jurvetson were deemed to have shared voting and dispositive power with respect to 14,967,241 shares. The address of the entities associated with Draper Fisher Jurvetson is 2882 Sand Hill Road, Suite 150, Menlo Park, California 94025.
****
It does very much look like these two entries overlap. The only reason for explicitly listing John Fisher (and not Steve Jurvetson for example), is that he is on the Board (where as Steve Jurvetson is not). I don't think John Fisher independently owns or has separate set of funds that own another set of 14mil+ shares separate from DFJ investments.
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Hi, where did you find this information?�
1/1/2015
guest Finance.Yahoo.com�
1/1/2015
guest Given that SCTY is a recent IPO, it has limited 200-day-moving-average history. It only spans last two ERs actually.
ER Date Price 200-day-MA %Away %Fall Next Day
3/18/14 77.10 51.20 50 -5.71%
11/6/13 59.65 32.65 82 -16.70%
So you might be right, given that now the stock is literally around the 200-day-ma, it may not fall as much or may even go up on ER.�
1/1/2015
guest I haven't paid much attention to EPS numbers in the past as I thought they are sort of irrelavent. As I take a close look now, the ship has already turned!!
These are the GAAP numbers (including some restatements):
Q4 13 -> 0.280
Q3 13 -> 0.040
Q2 13 -> -0.310
Q1 13 -> -0.410
Q4 12 -> -1.300
Here is the real kicker: analysts are expecting -0.629 eps for Q1 14. LOL!
Now I'm feeling very positive about ER actually.
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I agree with the gist of this. I look at Retained Value and Retained Value/Watt to get a feel for the trends. I don't think of them in absolutes.
Lets say we agree that SCTY's retained value is in reality only half as worth as they say it is. All it means is that it will take an extra year to grow into their number (or any future target number), as they are growing at 100%+ rate. For a long term investor that should not be too much of a big deal.
Another key related point, I don't think we should look at Retained Vale as company's true worth or some sort of proxy for the company's fair value. It's a confusing/messedup metric. I know it takes out tax equity partner's shares but I'm not sure if it takes out monetisation through debt. This is the reason why I like to look at Book Value (with a reasonable multiple) as a better proxy for fair value.
Having said that SCTY assumes 90% renewal rate for the later 10years. Not sure what they assume for the remaining 10% - a complete write off?
Here is a blob from the footnotes in one of the quarterly presentation:
�Retained Value Renewal� represents the forecasted net present value of the payments SolarCity would receive upon Energy Contract renewal through a total term of 30 years, assuming all Energy Contracts are renewed at a rate equal to 90% of the contractual rate in effect at expiration of the initial term. This metric is net of estimated operations and maintenance, insurance, administrative and inverter replacement costs. This metric includes Energy Contracts for solar energy systems deployed and in Backlog.�
1/1/2015
guest HenryF, Retained value will ultimately give way to traditional metrics as they hit break even and begin to self finance... Since this is a business currently expanding at 100% compounded, there needs to be a way to express the end result value to investors while they're getting to this point. The npv is that expressed way. If they didn't show the future value of returns on intensive capital now, they would be just another installer, growth would be severely slowed. The retained value has been extremely helpful in raising billions of dollars for Solarcity.
To me, using my systems engineering brain, it is just like the millions of projects that go on around the world where you finance the construction using simple npv. Analysis/ break even analysis, etc...
update: and if some people out there think Solarcity hasn't done the sensitivity analysis on assumptions such as discount rate, etc... those people are very misinformed and need to pay attention a little more in detail to the management running this thing...
dont forget Elon has been 100% behind this analysis from day one... Check out what he said on IPO day...
Musk: SolarCity IPO Price Sought Wasn't Aggressive�
1/1/2015
guest Anyone have any ideas why TAN is getting hit 6% today and 7% for SCTY? Seems to be a washout I'm hoping. Nasdaq is only down 1% but entire solar sector is getting hit hard and I can't seem to find any news why.�
1/1/2015
guest Weak volume for Solarcity compared to many of the main solars...�
1/1/2015
guest nope- there's no specific Solar news to drive it. 10% down across the Solar board- good buy-op here. It's basically a risk off- US econ data coming this week and Ukraine. IMO a big market miss as usual. I'm currently adding to position�
1/1/2015
guest credit suisse downgraded chinese solar demand, so chinese solar companies are getting pummeled:
Credit Suisse Lowers China Solar Demand And Yingli Green Energy TP - Emerging Markets Daily - Barrons.com�
1/1/2015
guest Next number in that series is 74c.�
1/1/2015
guest SolarCity Announces Date and Conference Call Details for First Quarter 2014 Earnings Report - Yahoo Finance
this could get fun since Tesla's conf call will start a half an hour into solarcity's call!!�
1/1/2015
guest Here is the deal on SCTY's stock price.
Elon Musk bought 214,869 shares and Lyndon Rive bought 107,434 shares at a price of $46.54 per share in Oct 2013, in the secondary offering.
Most definitively, these two guys know of the company's prospects and vision than anyone else on the planet.
Media reports Elon Musk as a Billionaire and thus giving the impression he is very rich. That is all very true. But the other truth of the matter is, he doesn't hold much cash. In fact he has personal loans north of $300 million with Goldman Sachs etc. So any sizeable purchases he makes are all on borrowed money.
I vividly remember during the secondary, Musk basically said "I will invest this amount regardless of the price, just give me whatever shares I can get." I'm unable to find a link at the moment but will post once I have it.
The way I read that is "I can only afford to spend this much at this time. Whatever price you financial nuts come up with in the primary market, that will be way lower than the true potential of this company. So just give me whatever number of shares you think is right."
Elon Musk is a person with the highest business acumen of our times and quite possibly of all time. I often tell my friends that Musk will beat Rockefeller in becoming the richest person world has ever seen. Now we see this man, going on credit and buying the stock without regard to price.
What does all that tell about the price of $46.54?
After ER (or any other time), if stock drops close to $46.54, I will buy the stock like a mad man. I honestly think I would be stupid not to. It can always go lower esp if there is an imminent recession or some abnormal event. But I think the current price or any lower price for this stock is a real bargain.�
1/1/2015
guest HenryF, to add, that purchase was made over six months ago... A lot has changed since then, big milestones achieved, and many more coming soon...
not much company direct news put out since last ER, so to me, pure technicals at play in current stock price. Seems to me players are just shuffling money in and out of the sector and between companies at advantageous times. When big news comes out of tesla and Solarcity, big swings up will occur... These coming months are filled with big news events, just thing what the finalized gigafactory is going to do to things... Add in any slight bit of govt investigation results, or battery storage install news in Cali, etc... Ii do have my pie in the sky high prices, but I do feel that prices won't go too much lower ever again soon. (Barring any truly material breach). They just have the right mix in the right states at the right time with the right future strategy/corporate culture... Everything I want to see in an investment in good times and in bad, in the best of markets and the worst...�
1/1/2015
guest I made a point in one of my posted to state SCTY is recession-proof in my opinion. Everyone needs electricity and needs to save money during a recession. How could a recession possibly hurt this company? During a recession people may not want stocks but they'll buy SCTY ABS at a fixed rate with little risk. The capital should be easy to get in good times and bad. I just don't see how this company can do poorly during a recession. I really don't understand the market volatility either, other than pure manipulation. This is one of those stocks I just wish the shorts would leave alone so long term investors will buy and hold.
Personally, I would love to see Elon buy the dips and sell the highs. He would be doing his stockholders a huge favor. He can calm the stock down a lot by announcing his insider trades. He owns so much of the stock he can really help set the price and keep things more stable.�
1/1/2015
guest I said this before: SCTY will not do well in a recession and the stock will tank even more all the way to the teens if a recession started in the next few months.
You guys are going out of your ways to spin a huge negative into a positive/neutral in regards to SCTY.
First of all, SCTY will not be able to issue ABS easily, if at all, in a recession and a bear market.
Here is an example of what could happen in a recession:
States (not named California who put in net metering rules for 20 years) begin to struggle financially even more than before, so they take away net metering rules (this can happen in a bull market and is happening in some states like Colorado or Arizona).
Without net metering customers are losing money big time on SCTY leases, so they stop paying their bills. SCTY issued ABS's begin to implode and so does the company's stock.
Now, I am not saying that this will happen, but it is a realistic possibility and you wrote "I just don't see how this company can do poorly during a recession."
Another more simple example is that people lose jobs and stop paying for the solar lease, because they don't believe that SCTY will cut them off. Or they can simply play the "wellfare" card to get free/subsidized electricity from the utility instead having to pay SCTY.
There are many things that will go wrong for SCTY in a recession. If the recession is severe, such as in 2008 then you might be seeing SCTY trade below its IPO price. Make no mistake, all other solar stocks will get hit really hard too but SCTY would get hit just as hard if not a lot harder IMO.�
1/1/2015
guest You probably picked the absolute most negative scenario imaginable for SCTY. What you describe would be a depression, not a recession. People buy bonds and secure investments during recessions and the SCTY ABS would be quite attractive at 5% during a low inflation environment. That settles the ABS problem during a recession.
People pay their electricity bills before they pay their mortgages. They also pay their credit card bills/utilities/car loans before making the mortgage. A person is not going to stop paying a lease on electricity just as they don't stop paying the electric bill. Sure, anyone without a job might not pay. You don't need a recession in order to find people without jobs. The number of people not paying due to job loss will be much smaller than the number of people signing up for a lease to save money. Saving money is easier than spending it when you're in a tough spot.
The government may continue the rebates if the economy slows. You seem to forget the Fed is pumping money into the economy and swears to continue in the event of a recession. Financing solar panels is going to be a long term certainty regardless of economic health.�
1/1/2015
guest Thats a thought, but iit seems that when he, and everyone else, accumulates and holds for the long term, all long term investors win. The volatility happens but at the end of the annual production cycle, the stock should a lot higher then at the beginning(barring any material breach of course.)
we should get a good snap shot after the q1 conf call and q2 guidance(and reaffirmation of YE guidance).�
1/1/2015
guest The instability of the stock stops a lot of people from investing in the first place. If it was rising and falling a lot more smoothly then a lot more investors would hold on. People do not like all this crazy volatility. 50% swings is crazy. I can deal with 25% swings easily, as can most "investors". Too many traders in the stock and way too many shorts. He's letting the shorts control the stock more than they ought to.�
1/1/2015
guest I hear you, swings are crazy. I think it will all pan out in the end. Have to remember it was in the teens at the beginning of 2013. At the beginning of 2014 in the fifties. And in my opinion, closing in on the 100's at the beginning of 2015. I feel they will set somewhere in between 900MWs-1GW goal for YE 2015, RV between $3-4bln.
with growth like that, tough to see investors run away...�
1/1/2015
guest
Tesla Power Light | EnergyBiz
this is a recent JB interview on Solarcity/tesla energy storage. Although it could be shorter variation on this article from a few weeks ago... Tesla's Power Play | EnergyBiz
JB STRAUBEL: "Our long-term goal is to invent ways to solve storage problems to facilitate a 100 percent renewable grid. That shouldn�t threaten utilities. It's the logical and future evolution of the grid. Utilities have a key part in this. Our role is to invent and improve the products that make a 100 percent renewable grid possible."
All in all, I think we will see more of the tesla/Solarcity energy storage narrative in the coming weeks and throughout the second half of the year...�
1/1/2015
guest We Are SolarCity - YouTube
Saw this video, I'm wondering if Solarcity is approaching 2 residential installs per day now... Also read a tweet from a Solarcity installer he finished installing a 7kw system by noon... My own little back of the envelop number says Solarcity average system size is about 6.8kws so could be a possibility. Last reported by Bob Kelly in March was an improvement from .4 installs/day to .9/day... So getting to 2/day would be a big milestone in such a short amount of time... I wonder what the competition rate of install is?
Is the zep aquisition paying off? This is a video on how zep mount works...
ZS Comp Overview on Vimeo
Mounting Market Will Grow $1.5 Billion By 2018
solar mounting will grow $1.5bln by 2018...�
1/1/2015
guest Net Energy Metering: Update on Key Distributed Generation Policy
solarcity is hosting a webinar on May 20th about all things net metering... Should be helpful to all for understanding a very important topic to the future of DG...�
1/1/2015
guest Does anyone have any idea how much SCTY would have to charge lease customers up front to become profitable in the first 12 months of the lease?
I think it would be great if SCTY had an option where the client could pay the install/design fee and then get a reduced lease rate. It gives the client a little skin in the game in return for a lower cost of power over 20 years. I wonder how many people would choose that option.�
1/1/2015
guest Chandler adding more solar projects - Chandler - EVTNow
"As with previous solar projects, Chandler will not owe more money if the panels produce more power than the contract guarantees. But SolarCity will reimburse the city if the panels under-perform, Norris said."
South Central Connecticut Regional Water Authority SolarCity Commemorate Major Solar Installation
�This solar photovoltaic system, one of the largest of its kind in Connecticut, will allow the Authority to be more efficient and lower our energy costs. These savings are passed on to our customers in the form of reduced rate increases,� said Larry L. Bingaman, the Regional Water Authority�s President and CEO."
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I personally haven't heard any kind of package deal like this, but if there is a market for it, I'm sure Solarcity would do it. Only thing is the upfront cost that consumer would have to pay... Some people are all or nothing if they have the funds to buy, they buy... However, if it ultimately is cheaper and less risky to do it the way you described, then should be a market for it for sure...�
1/1/2015
guest My thoughts on the hybrid pricing model based on the feedback I've seen on this thread is that some people want to take 100% of the risk (purchase panels/paying installer/future maintenance) vs. those who don't want any risk at all.
I bet there are plenty of people in the middle who are willing to pay for the design and labor for the actual install but do not want to take on risk if the panels/inverter breaks 10 years from now.
I personally would never pre-pay the lease to get a better rate but I'd prefer to pay for someone to install the panels and then lease the electricity off the panels. If the panels fail, I pay nothing and SCTY would need to replace/repair them.
I think it would help the company also be more profitable, faster. SCTY takes on all the risk day 1 of the lease and operates at a loss for what seems a long time. They have to charge a premium KwH rate for that risk.�
1/1/2015
guest Thebanker, they are operating at a loss only because they are scaling. Scaling takes a lot of capital as you know. Scaling will ultimately make the design/install cheaper. If the design,labor, etc, costs come down, Solarcity can keep creating competitive products. This is an industry that varies really on each contract, each company competes for every customer individually. Different utility and government incentives, etc.. So, really have to see the competition on a per contract basis. I'm sure, if you wanted/could, you would get a quote from a few different solar companies to determine what best works for you. And that is the key to Solarcity's success. I feel cliche, but P.F. Drucker was right, the sole purpose of a business is to create a customer. I feel Solarcity does that in any product, lease or buy, they put out there. In the words of Elon, just let them compete for your business and see what happens.�
1/1/2015
guest This depends on the level of maturity of the ABS market at the time of recession. If ABS market evolves enough, there will always be a market. The rates may go higher but that's about it. In a normal recession Markets don't completely seize the way you are imagining. 2008 was an anomaly. Even in the "great recession" of 2008 not all markets seized up.
Something is a miss here. How does helping utilities retain their revenues help the State? Are you saying states "own" utilities?
SolarCity will be best prepared of all solar companies to deal with any paring of net metering. If you want to play solar there is no better choice in this perspective.
Please speak numbers. This statement sounds something like 60% of population will become jobless in a recession.
Unemployment will go up by utmost 5 to 6 points in a recession. Add to that, recessions hit lower income groups harder than higher income groups. Lower income groups have lower home ownership. Put it all together, it would be significantly less than 5% of homeowner population which will have job losses. Now if you properly account for dual-income households, the percentage of families that own homes that can't afford electricity will be minuscule.
Take a look at any of the utilities revenues through past recessions. Duke's revenues were flat even in a catastrophic recession of 2008.
Quite the opposite actually. Many of your negative posts on SolarCity have an alarmist tone and are not grounded in logic or backed up with data. It's a shame that an expert investor/trader like you somehow deliberately tries not to see the positive aspects.
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Ultimately, the stock could fall in a recession but that would be based on sentiment than loss of revenues. Similar to how Apple�s stock fell in 2008 even though its revenues and profits were going up every single quarter throughout the recession. I guess we could argue that growth slowed (than expected) which caused the drop. Even Duke fell during both tech crash and in housing burst. So the stock could fall and it very well might, but that would NOT be due to loss of revenues or profits.
A better way to think about it is, a recession would be a great buying opportunity if you were to have spare cash at that time. Because once it�s over the stock will fly back into it�s proper valuation (and we know the recession won�t have a material impact on the business).�
1/1/2015
guest You guys are consistently ignoring all risks and brushing them aside like they are immaterial, non-existent or require a black swan event and/or great depression in order to materialize. Good luck in your investments, but you guys are making a big mistake by not acknowledging anything that I say.
Maybe you will listen to S&P Credit Rating Agency instead:
SCTY got BBB+ rating and that barely qualifies for investment grade on their scale (BBB- is considered lowest investment grade). Here is their definition of BBB:
�BBB��Adequate capacity to meet financial commitments, but more subject to adverse economic conditions.
It doesn't take a genius to figure out that a recession could impact these ABS quite possibly in a significant way (I posted all this stuff before knowing what the credit rating was). But it does take an ignorant person to think that a recession will not have any impact on the ABS issued by SCTY.�
1/1/2015
guest Are you talking about the same agency which rated sub-prime mortgages as AAA? To top it off they lowered US rating from AAA only to see Treasuries take off.
Data is firmly on my side of the argument. Default rates on solar leases are lower than on prime-mortgages. Take a look at:
SolarCity - Events Presentations -> Featured Event -> Page 15.
If a recession were to happen right today, ABS market may not evolve as quickly as hoped. But that's different from a recession happening next year or later. By that time the ABS market would have evolved quite nicely and a recession will have very little impact if any.�
1/1/2015
guest Standard Poors Thinks SolarCity is Investment Worthy, Should You?
"SolarCity (NASDAQ: SCTY ) got the blessing of Standard & Poor's this week. The ratings agency said that SolarCity's recent bonds are reated at a BBB+, an investment grade rating. This should actually come as a surprise for some investors because it got that rating despite not having a long credit history and it got a better rating than some of the other utility giants such as Duke Energy (NYSE: DUK ) and Exelon (NYSE: EXC ) ."
https://www.greentechmedia.com/articles/read/SolarCitys-New-70M-Securitized-Rooftop-Solar-Portfolio
The new offer, 2014-1, comes with a new set of insights into SolarCity's securitization strategy:
- S&P assumes a solar module degradation rate of approximately 1.3 percent per year
- Residential customers need a FICO of 680+ with no bankruptcy in the last five years in order to qualify for a lease or PPA.
- Weighted average PPA price is $0.15 per kilowatt-hour with a 2.07 percent escalator.
- California, Arizona, and Colorado (the top solar states) accounted for approximately 90 percent of SolarCity's total portfolio.
- 2013 vs. 2014: The number of PV systems in the pool jumps from 5,033 to 6,596, and the price-per-kilowatt-hour escalator drops a bit. FICO score expectations and assumed solar module degradation rate are essentially unchanged. The 2014 pool leans toward longer customer agreements with a greater focus on residential rooftops, because the money for this type of company is in long residential leases.
- Net energy metering: S&P's take on the regulatory climate for solar expects "some balancing of utilities' and solar developers' needs, including potential transition periods to modified rates for existing solar customers." S&P sees this trend as mitigating the regulatory headwinds.
- Inverter modeling: S&P anticipates inverter replacement ten years after each solar system is put into service. "The transaction has a reserve built up leading up to this expected expense."
�
1/1/2015
guest Tesla's Power Play | EnergyBiz
STRAUBEL Stationary and mobile storage have a nice synergy involving economies of scale. The more batteries that are manufactured, the lower the unit cost. We help to drive down the cost of batteries for electric vehicles by making more stationary storage, and vice versa.
�
1/1/2015
guest Wow, this is an awesome interview, thanks for posting the link. Everyone should read this, I got inspired by it to load up more SCTY versus profit taking before the stock price gets too close to my cost $29 basis. Load up on the dips and hold for 5...10...15...20 years if you can afford it. In my opinion, as long as the company survives a major downturn, you will be massively rewarded.�
1/1/2015
guest It's a fallacy that solarcity's operations will seize up in a recession due to lack of funds. It's thoroughly rebuked by someone here by directly referring to the official 10K document. Pasting here for convenience.
***
The topic of what will happen to SCTY's financing if there is a recession came up here. So I though this snippet from the 10K document is relevant:
"We finance our operations, including the costs of acquisition and installation of solar energy systems, mainly through a variety offinancing fund arrangements that we have formed with fund investors, credit facilities from banks, preferred stock equity offerings and cash generated from our operations. As described below under�Financing Activities�Financing Fund Commitments, as of December 31, 2013 we had $544.3 million of available commitments from our fund investors, including a $344.0 million financing fund structured as a debt facility, that would be available through our asset monetization strategy.
While we have reported operating losses for the year ended December 31, 2013, we believe that our existing cash and cash equivalents, funds available under a secured credit facility and funds available in our existing financing funds that can be drawn down through our assets monetization strategy will be sufficient to meet our cash requirements for at least the next 12 months."
Another thing to note, Solar City is constantly expanding it's funding choices. The list includes:
- Incoming cash from lease payments
- Tax equity funds
- Syndicate loans (eg: the latest 250Mil financing facility)
- Asset backed securities (example)
- The upcoming crowdsourcing platform
It's worth noting, not all recessions are as bad as 2008/09 recession. Most recessions are moderate lasting about 2 to 3 quarters.
***
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1/1/2015
guest Riverkeeper's Annual Fishermen's Ball | Riverkeeper
solarcity will receive the Big Fish Award tonight...
Riverkeeper�s Big Fish Award recognizes individuals and organizations that have had a transformative impact on the movement to protect our natural resources. Their innovative problem-solving, bold leadership and dedication inspire all of us to follow in their footsteps and be better citizens and stewards of the earth.�
1/1/2015
guest Mod Note: Enough already with the personal stuff. Yet another post (and that quoting it) got moved to snippiness. This thread is among the worst for having posts moved....I've left warnings before and now have zero tolerance for bad behavior.�
1/1/2015
guest Hopefully he's just buying a house for his mother
Form 4: Update Filing for SolarCity Corp (SCTY)
Apr 30, 2014 (Vickers Stock Research via COMTEX) --
Document Processing Date: April 29, 2014
Stock Name: SolarCity Corp
Stock CUSIP: 83416T100
Filer: RIVE, LYNDON R.
Position: Chief Executive Officer
Stock Symbol: SCTY
Exchange: NASDAQ
Stock Type: COM
Transaction period: April 29, 2014
Trade amount: 160000 shares
Trade type: Automatic Sell
Trade price range: $52.254
Shares still held: 1899812 shares
Own Type: Indirect�
1/1/2015
guest SolarCity - Statement of Changes of Beneficial Ownership
he actually still holds over 2.6millions shares. Sold roughly 6%. Also sold at pretty much the 200 day area before earnings release... I'm thinking it is for personal reasons unrelated to health of the company.
if he sells another 6% this week or after earnings, then I'd be a little concerned...�
1/1/2015
guest I wonder what the "Automatic Sell" represents. I wonder if this was a planned sale. It would be nice to see more details about these transactions. Luckily Elon isn't selling. I don't care what reason Elon would be selling for. If he sells at this price range I'd really be concerned.
Does anyone know Lyndon's salary? Maybe he also has a low salary like Elon so selling stock is his only way to make large payments in his life.�
1/1/2015
guest @thebanker,
SolarCity - Definitive Proxy Statement
He makes 276k.(pg37)
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http://www.innov8energy.com/blog/innov8energy-solarcity-partner-to-provide-solar-energy/
looks like they might be adding more marketing power in the MD/DC area now...�
1/1/2015
guest Senior executives at public companies don't get to trade shares in those companies just whenever they want. They have to have a "trading plan" in place, and in a case like this would have to have committed to selling the shares months in advance.�
1/1/2015
guest +1
i wonder how far out they set their trading dates? Does anyone know 105b-1 stipulations?�
1/1/2015
guest I think you mean 10b5-1. That 'rule' actually just requires that the trading plan is established when the trader (in this case Rive himself) is not in possession of non-public, material information; the concept being that 10b5-1 plans can be used (they are not mandatory) as an affirmative defense for company officers against accusations of insider trading. Normally the plan is established at least 30 days in advance but may be up to a year or more; there's no set time requirement or even recommendation. Plans simply commit the officer/insider to trades specified in advance for certain days. Typical time frame for such plans is for adoption immediately after an earnings release when officers would hopefully have zero material, non-public, information.
Existence of a 10b5-1 plan for any given company officer does not preclude them from making other trades outside of that plan provided they are not trading based on insider information.�
1/1/2015
guest Is an Energy Storage Tsunami About to Hit California? : Greentech Media
More energy storage momentum in California...
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Thanks for the info... It seems like in this case, right now is a bottom, flatline moment for the stock. One might think there is nothing to point to insider trading given the high volatility around ER time. There typically is a run up into the ER, then a drop post ER. To sell right after ER doesn't make sense here, so typical time frame as you mention might not apply. Some may even say he did sell post q4 release but that could be a stretch since q1 release is next week.
who knows right? This has nothing to do with the health of the company,IMO. I think they are going to have a good Q1 ER and put out strong Q2 guidance, so no worries.
update: Board member J. Shulkin just acquired 30000 shares today on behalf of Valor Solar, so insider buying going on now too.
SolarCity - Statement of Changes of Beneficial Ownership�
1/1/2015
guest @futureproof Do you remember how much of the planned 50GWhs from the giga-factory is sort of allocated for stationary storage?�
1/1/2015
guest Those are options, not common stock acquisition.
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Just FTR: although I summarized 10b5-1 plans in general, there's no indicator I have seen suggesting that Rive's stock sale was part of a 10b5-1 plan or not. I'm guessing it was a predetermined trade though due to the timing (after Q1 but pre-earnings means he must be in possession of insider info right now).�
1/1/2015
guest Rive's sale was in accordance with the 10b5-1 plan. SolarCity - Statement of Changes of Beneficial Ownership
The options exercise price is $52.90, so I think they hope to see the current stock price go a lot higher in the future... I'm sure they're not going into this hoping it goes down... So, I'm going to go out on a limb and say they're pretty optimistic about Solarcity's future with these 30k today...�
1/1/2015
guest Ha, I wish I knew that. I'm guessing, if all things go well, they will try to have enough to meet Solarcity demand at a minimum. So, if solarcity achieves 1mln customers by mid2018, then they will forecast from that number... My best guesstimation right now...
Update: I've read some residential storage systems are currently about 10-11kwh, so maybe 1/6-1/8 of total battery pack production(based on 60,85kwh auto packs). So, maybe 568k-650k storage units at 10-11kwh each. Again, more guess work.�
1/1/2015
guest There you go, in the notes it states his plan was in effect on 8/30/2013. IOW, the sale was fixed 8 months ago.
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The options are priced at the time of the gift, they were most likely a gift to the director in return for board participation or the result of an earlier agreement. Pricing options below market creates a taxable event for options; those options may go down so it almost never happens that they are priced lower.�
1/1/2015
guest That would really suck if that gift turned out to be a turd, right? Gift or not, still think it's a vote of confidence in the company. The way the notes read, it seems more as a retainer or performance bonus as long he sticks to be "issuer's service provider"...1/48th Vest each month after March 2015...�
1/1/2015
guest You are over-analyzing this.
He simply got granted 30,000 stock options with a strike price equal to Monday's closing price. Probably gets these every year.
If some random director gets 30,000 then I would watch out and keep an eye out for dilution when you add up all employee stock and option grants. I have the same concerns with TSLA.�
1/1/2015
guest you know what, this is probably it. Simple enough. And I think it's the same for the all the "insider selling." Nothing more then planned events that would've happened regardless of current stock price.�
1/1/2015
guest Selling happens all the time, so I wouldn't worry about. I was laughing my ass off last year when a SPWR executive sold all of his stock at $10, while I was buying more.
Insider selling doesn't mean that they don't think that the stock will go up. Some people do not like having too much exposure to the company they work for, so they cash out stock any chance they get, since they will get more next year.�
1/1/2015
guest in addition to sleepy's comments; Even Execs who do know the stock potential future sell at regular intervals to fund other investments- don't forget what they are also receiving many more future options to replace those for future performance etc. It's a virtual non-issue you guys are discussing.�
1/1/2015
guest Solar Energy Takes Over Professional Sports | EnergySage
might we one day see the NFL/MLB/NBA games in Solarcity Stadium, Solarcity Field, or Solarcity Center?
FYI, also read some tweet that Solarcity will make an announcement on knpr tomorrow about "new solar jobs." Not sure if this anything significant, still thought it something to share away...�
1/1/2015
guest SolarCity Launches First-of-its-Kind Solar Service in Nevada
hopefully, this won't tip the hat toward Nevada for the gigafactory too soon... Maybe New Mexico is next for Solarcity to do the same as it just has done in Nevada... Hint to New Mexico and others on energy incentives
Solarcity has now expanded its market to 15 states. It will also add 400 new jobs for a total of 800. Since New York has 180 Solarcity employees for 19.3mln population, curious why Nevada with pop of 2.7mln gets over 4x more work force... Hmmm....�
1/1/2015
guest How big is launching SCTY in NV? Any idea how many homes could potentially have panels installed in NV?
I'm surprised the stock is only up 1.5% today.
I saw something yesterday mentioning 2 possible gigafactories in the future to reduce risk. It was an interview with Elon. News out of SCTY lately has been very thin lately. I wonder if this is a strategy to hold back info until after earnings next week.�
1/1/2015
guest q4 conf call they hinted at reduced commercial projects and it sounded intentional. This could be interpreted as making room for gigafactory capacity building, but could be a stretch. They will now have 800 employees in Nevada, again expanding capacity what seems disproportionate to current population. Nevada is restarting its
SolarGenerations Program in August so this seems curious timing. As far as gigafactory in two places... Pure negotiation tactics to expedite permits as well as to receive other incentives... Make the states commit resources with minimal time delay if competition is set all the way to ground breaking... There will only be one gigafactory at the end of the process. Nevada looking very promising still with this latest development.�
1/1/2015
guest So you think the 800 employees hired over the next year will be doing more than just solar installations on homes?�
1/1/2015
guest Sounds a bit overkill, doesn't it? I could be underestimating the current rooftop market in NV. Maybe you need 400 more employees to cover it. In that case, NV is a good addition to Solarcity and bodes well for accelerating the achievement of 1mln customers by mid 2018...�
1/1/2015
guest 15 states still seems pretty low. I'm surprised they haven't tried to break into even more states. Whatever it takes to stay on their path to 1m by 2018 would be nice. SCTY definitely doesn't need to be missing any targets anytime soon.
I see such a huge cycle of growth for them I just can't see them missing their target of 1m by 2018. I'd love to see them add an add-on service to the systems they sell and do not lease. If buying a system becomes more popular it would be nice to see some retained value there from services sold to people who do take the risk and buy the system outright. I know if I bought a system from SCTY in the future, I'd like to buy an insurance policy from them that would repair the system if it broke and the monitoring service that would help me manage my usage.�
1/1/2015
guest 80% of all residential installs in the US are done in 5 states. California accounts for 52% of that... Solarcity appears to be where they need to be in that regard...�
1/1/2015
guest Solarcity has a central operations office in Vegas where a lot of the design, monitoring, scheduling etc takes place. That's why there are already employees there. There are videos on there Vimeo with more info, but I'm on. Phone at the moment.�
1/1/2015
guest SolarCity Launches First-of-its-Kind Solar Service in Nevada
" SolarCity can allow Nevada homeowners to go solar for as little as $30 per month, with design, installation, financing, insurance, monitoring and a performance guarantee included."
$30/month? Wonder how the competition stacks up?
By the looks of the photos on twitter, looks like local politicians are patting themselves on the back for bring Solarcity to Nevada.
Also, look at the "careers" page, and you'll see Elon as the star interview for the Company... For those that still think Elon doesn't have a big impact on Solarcity should really think about their position for a while. As energy storage starts to ramp up in the second half of this year, the tesla as supplier to Solarcity relationship will become a big news event. I talked directly with Solarcity management and they see energy storage as just another piece of the means of which they will deliver clean, cheap energy. I have yet to hear any other solar company think in such a way...�
1/1/2015
guest Arizona May Impose Unusual New Tax On Customers Who Lease Solar Panels
http://thinkprogress.org/climate/2014/04/30/3432172/arizona-solar-property-tax/
I really don't see how / why TSLA gigafactory should be considering either AZ or TX.�
1/1/2015
guest well, let's see what happens to this "interpretation" as the gigafactory negotiations wind down in the coming weeks... 6500 new jobs and $5bln wins the day every time... I think it's just a matter of Tesla keeping that carrot alive in everyone outside of Nevada... Also, keep Nevada on edge so they will be even more accommodating in expediting permits and instituting great incentives... Again, 6500 jobs and $5bln in new tech manufacturing will change a state overnight and everyone knows it regardless of what part of the political spectrum you stand on...
think about it this way, the benefits/incentives given to Tesla/SolarCity, will be by far dwarfed in comparison to the economic benefits brought by 6500 new tax paying residents working at a new tech manufacturing factory building product that will funnel billions of dollars annually to your state that would've never happened if tesla didn't set up shop there. This is about decades of prosperity and growth. Partisan politics tend to crumble away in the 11th hour in these type of situations.�
1/1/2015
guest Wow, not sure if this is social media wide, but if you type "Solarcity" or "Scty" in twitter, a Solarcity generated post pops up. You refresh the feed, and another Solarcity generated post pops up until someone tweets, then another Solarcity generated post pops up again, repeat... Used to always see a natural gas ad every time I refreshed now they are gone...
I have a feeling may 1st kicked off a new stage in solarcity's marketing campaign. Definitely feels that way...
Update: holy crap, it's the same thing for tesla,Elon musk, spacex, etc... This is an Elon enterprises wide thing, they are all working together... Things are ratcheting up, man, Elon is a fierce competitor... I like it�
1/1/2015
guest Cramer appears to be pumping up the mo-mo stocks again on CNBC in the video section. Maybe the selloff is over and it's time for all the smart money to pile back into high-growth stocks. I would not want to be a SCTY or TSLA short right now going into ER next Wed.�
1/1/2015
guest For those who don't know, Arizona is also trying to repeal net metering.
Also, Arizona just passed a law that allows utilities to charge you and extra fee for having solar; $5/month.
Arizona is the second biggest solar state in the US.
Strike 1 - $60 annual fee for using solar
Strike 2 - Avg. $152 annual increase in property taxes
Strike 3?
Strike 3 is if net metering goes away. If that happens then you bet that people will be breaking lease contracts because solar is losing them money every month, and a lot of it. Without net metering, rooftop solar is not economical.
Battery storage would be great if it was free, but it is expensive. So if you have to pay another $40/month or more for battery storage on top of those fees then solar is not economical at all, unless you go completely off the grid; but then you need a bigger battery.
My average size solar system at 7.68kW produced 46kWh's today and 30 of those were sent to the grid. So those 8kW batteries that SCTY is offering/testing right now for ~$10 - $20 per month are worthless for me, and for most other people as well. I would need at least a 20-30kW battery, but then it starts getting expensive.
If this new tax gets implemented on solar leases after imposing a new $5 fee and net metering does go away in Arizona, then I am fairly certain that at least a few (if not a lot) of people will be cancelling or re-negotiating (doubtful) their contracts with SCTY. And that is another risk for ABS holders, which are only triple B rated for a reason.
Once again, I am not short SCTY. I think that the company will be very successful. Just playing devil's advocate in this thread, because I know that a lot of people appreciate hearing the other side of the story too.�
1/1/2015
guest Wow this is BS. I'm a shareholder now of some scty, but really I'm going "this is bs" because it's such a regressive move.�
1/1/2015
guest Can you elaborate on what is bs? The stock is down and it was taken down with all the other momentum stocks that have no positive earnings. Earnings come out Wed the 7th. Assuming those come out as expected or better, SCTY should trend higher again soon. Even Cramer now admits the bloodbath against the momentum stocks is likely over. The jobs report today was strong and prior months were revised stronger. This all should be positive news for stocks in general.
Cross your fingers SCTY doesn't do something goofy like delay or botch the earnings release as they did last time. Now that would be BS!�
1/1/2015
guest @Thebanker, the volume is low across the board for a while now... It's about the guidance, if great, should see a lot of people jump in at that time... Feels like people are waiting for some kind of number to be leaked or pre-announced. There is a lot news coming out this summer, so it might not be as extreme of a price fade as it was last year... That spring run up was in tandem with Tesla first quarter smash so much different dynamics this year. Feel energy storage might start to be a bigger story (gigafactory too) going into fall... And of course, and regulatory success if that pops up as well.�
1/1/2015
guest Not enough is mentioned about short interest helping move the stock price. I think any positive news next week that shines a light on continued long term growth is going to send the shorts running. They are holding the stock down, not the lack of buyers. When 25% of a stock is sold short and 70% is held by insiders, you can see how the shorts are really holding the stock hostage. They only have the upper hand for the moment since all the profit-taking sent the stock down so they have a chip on their shoulder believing they might win this time. They see the stupid lawsuit news almost daily and think that might keep buyers away. Both TSLA and SCTY have been news-deprived lately as far as company releases go. Yesterday's news about NV was nice to see cause it sent the stock up 7% while the stock market was flat. That might prove my case a bit showing that the shorts will cover on new long term growth moves by the company.
Playing devil's advocate - the shorts could smell the blood when the accounting "errors" or delay of earnings report hit us. I have to admit, that was a dumb move on the companies part and I hope they don't repeat that again anytime soon. When you do that as the stock is making all-time highs you send a lot of people running that may never invest again. It's already hard enough to place a value on this company - screwing up the earnings release is just a horrible thing to do. I'd much rather seem them offer low/conservative guidance and hit the numbers 100% of the time vs. shoot for the moon and then delay an ER report! Let's hope they learned their lesson and don't repeat it.
As far as statistics about the company go, I'd love to see more updates out of them. I'd love to see the waiting list and "sale to install" backlog on a monthly basis. As far as I'm concerned, the backlog and the sale-to-install delay are key numbers. It shows me the supply/demand for the product. If the delay to install is dropping and the backlog is growing, that's something to be very excited about. If you're thinking about selling this stock short and you can see a backlog a mile long you'll think twice.
As the saying goes, not one wants to eat at an empty restaurant. I think displaying the backlog would be a great marketing move for the company. It would be a good point to add to their sales pitch as well. "We have so many people wanting solar leases that it's going to take us 4 months to install it and 1000 people are on a waiting list!"
The backlog for delivery of TSLA model S is impressive to me. If that backlog ever shrinks to the point you get your vehicle in 1-2 weeks that would worry me. I'll never short TSLA but having no backlog would stop me from adding to my position as it goes higher.
I intend to add to my SCTY position as it rises again.�
1/1/2015
guest @thebanker, the accounting error wasn't related to performance, it was an overhead allocation equation error. If it was material, the stock would've plummeted the instant it hit the wire. It actually stayed in the 80's for a few days after...
I have to disagree on backlog. The less the better.�
1/1/2015
guest The accounting error may have been just a minor error but it also delayed the release of the full earnings report and that spooks a lot of investors. You and I know it didn't mean anything substantial but we do not make up the market of average investors.
A large backlog shows high demand for the product. It may be a negative for customer service since everyone wants their panels installed tomorrow, but for growth seeing the backlog is good news. You don't want the installation crews working at 90%, you want them working at 100%. The backlog helps keep the crews swamped with installations. It improves their efficiency by having one job after another lined up ready to keep them busy. I'm sure it helps them install multiple systems in the same area on the same day too.
Maybe it's just me, but I love knowing their product is in such high demand it takes months to get it installed (SCTY)/delivered (TSLA).�
1/1/2015
guest Apples and oranges. Tesla has a unique product with no real competition, a backlog there indicates potential and creating a market; Solar City is residential PV and there's literally hundreds of competitors already, they do their job very well but investors would not be happy seeing any significant backlog of unfilled demand as they would see SCTY as slipping on fulfillment.�
1/1/2015
guest @thebanker, the way I see Solarcity backlog is people don't want to wait for install, so customer satisfaction problems if backlog. However, I see what you're saying. What's hot, people want. But since the untapped market is so big, I think demand is huge now. So the more customers you can service, meaning the higher volume you can handle, the better. Solar PV tends to be a long time purchase, so the market could shrink precipitously as saturation occurs. Not like the iphone, which people seem to buy every 1-3 years...
@nigelm, you are missing one key point that makes Solarcity exactly the same as Tesla... Energy storage. No other solar company has or will have a PV+storage product that can compete. Solarcity is years ahead of the game here. They are already planning for a networked DG grid with utilities, specifically PG&E, so I'd have to disagree with you there.
again, I ask anyone out there to post here a company that will be able to compete with Solarcity on PV+storage. No one seems to be able to come up with one and that should scare you relating to the competitors you support/invest in right now...
solarcity is looking to the absolute future of energy, not just the PV install business. Networked storage takes the power out the utilities hands and puts it squarely in the consumer's. Net metering will change into a energy market. Each roof is a power plant producing that energy the utility(and other producers/consumers) will buy and sell at a market price. Solarcity will most likely be a major player in the market exchange. There are already PV energy "bitcoin-like" currencies popping up out there. This is big picture stuff that Elon and crew have been working on for years. Have to start opening up about what Solarcity is preparing to do here... Cleaner, cheaper energy...�
1/1/2015
guest SunPower/Total�
1/1/2015
guest The story is compelling but let's not get ahead of the game here. Solar City themselves say:
The definition of "nationwide" is highly questionable, I think they probably mean "in the states we operate".
Also the storage looks expensive which is why it's only back-up for critical functions like refrigerators etc. For most people outside of earthquake and hurricane zones partial storage makes little sense; now if they got larger storage at a reasonable price there's a whole market of folks who'd happily go off grid.�
1/1/2015
guest "Our battery systems are currently offered in selected California markets. We hope to offer the service nationwide by the end of the year."
That demandlogic product just helps businesses offset demand charges. No reason it couldn't be offered nationwide. Does it rely on any kind of subsidies?�
1/1/2015
guest What's their product? Can you elaborate on where they are currently implementing this product in commercial or residential DG?
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NigelM, you can go off grid. Just have to forgo selling your excess energy or buying when you need it.�
1/1/2015
guest I'm sure SCTY can set you up with a battery before long. As TSLA engineers better batteries those are available to SCTY I'm sure. Anyone looking at just a 12 month future for SCTY is really missing the big picture. They are going to gain market share, become more efficient, keep pricing down to keep competition at bay, roll out new technology other companies won't have, etc etc. This is like a CA mudslide that just keeps coming at you. Even when moving slow a mudslide will bury you and I imagine SCTY is going to be responsible for burying much of the competition. Living off the grid is becoming more and more popular. Not to bring up conspiracy stuff here, but the government is becoming more and more invasive in our lives and the trend to get away from the cities will be back in full force when you have a combo of efficient solar panels, battery storage and $35k electric vehicles that people actually love to drive. Now you can go live in a low property tax area that generally has lower cost of living as well. So let's not just think about the lower electricity costs solar provides but let's focus on the ability for the average person to build a decent home off the grid and actually live a cheaper life in general with more privacy. I predict that is going to be something that's more popular down the road. People are getting sick of the government, nosey neighbors, etc. I can't wait to get off the grid. The next thing we need for solar to really take people off the grid is national high speed wi-fi so people can live off the grid and work from home.
Imagine the freedom you can have with panels, batteries, electric car, long range wi-fi and a small greenhouse. There are plenty of people that want to move in this direction and it's going to be available soon. That's what I'm excited about when I see the potential of SCTY/TSLA working together.�
1/1/2015
guest Interview: SunPower CEO Tom Werner on solar, storage (r)evolution : Renew Economy�
1/1/2015
guest @thebanker, see, regardless of lifestyle or political views, Elon and crew are creating a future that's better for all of us. I believe Solarcity with Tesla energy storage will get you to that off grid reality sooner then anyone else. That's why I say, you can go off grid, but you'll have to forgo the ability to buy and sell energy when you need to. In your case, you don't give a rip, so no worries there...
The current utility grid will ultimately become just a series of wires that connect other DG(industrial, commercial, residential)energy producers/consumers...
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So, you're saying no, Sunpower doesn't have a product that can compete with Solarcity. Thanks for showing your support for my point here.�
1/1/2015
guest If you live off the grid you probably want to add a small vertical wind generator or two for the winter and cloudy days. If you supplement with wind then the battery storage becomes less of an issue. Why spend all that extra money on storage when you can add some wind power to the mix? Off the grid I'd be heating with wood as much as possible to help keep energy needs lower. Battery technology will continue to improve so over time we'll all have more freedom to get rid of the grid. If you like living on the grid then pray netmetering stays in place. As corrupt as our politicians are in this country, I don't expect that netmetering will last forever. They don't want you to be truly free so they might talk a good game now about letting everyone move to solar but as soon as their pockets stop getting full of your cash they'll figure out new ways to tax that money out of your pockets. Living off the grid isn't 100% foolproof to get them out of your life but it sure makes it a lot harder for them to bother you when you're living off the beaten path. I imagine millions of people want to live off the grid but feel they are stuck. Maybe I'm just wishful thinking but I really think technology is going to help people sprawl out to areas where they truly want to spend their time.�
1/1/2015
guest Originally Posted by futureproof
"No other solar company has or will have a PV+storage product that can compete."
Guess I'm saying I don't know, and I suspect neither do you. But I'm not the one making the claim in the face of other possibilities. I guess @futureproof, only the future-is-proof�
1/1/2015
guest @thebanker, like I've said before, net metering will evolve. Utilities will buy and sell your energy from DG sources. The major complaint from utilities with DG is they have no way to aggregate it. If they had a way to aggregate it they would love to go full tilt into it. Economic, scaled storage(that you can network) is the answer. The only company that is preparing to scale in the millions is Tesla Motors and Solarcity. No one else has the capability to scale to this level and that's the moat Solarcity is building with Tesla. Economies of scale coupled with brand recognition equals real trouble for the rest of the competition.
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Economies of scale is a very big indicator of competitive edge. Even CEO Tom Werner acknowledged that in the article you posted. If economies of scale is a significant competitive edge, and no one other then Tesla/Solarcity has or is developing these economies of scale, then it is logical to conclude they are ahead of the competition. I've checked everyone else that offers energy storage, no one even comes close.
Solarcity started its pilot program over three years ago. They deployed a commercial $0 lease storage product in US in December. They have a direct supplier relationship with Tesla which is on track to produce between 2.1-3GW of ENERGY STORAGE(60kwh-85kwh packs) this year alone. Solarcity has expectations to expand its residential storage into the thousands of US customers through the second half of this year.
Sunpower is planning to start a pilot program... in Australia... at some point this year...
You starting to see the difference now?�
1/1/2015
guest I agree with the economies of scale beating the competition. But having the right partner like TSLA is what makes the difference regardless of size. Let's not forget the unknowns that are still growing inside Elon's head. This guy might think of something in the future that really blows out the competition. Who's to say he won't reinvent the solar panel??? We really don't know what he's capable of engineering but we do know that tons of engineers would love to go work for him. So not only do we have the genius of Elon working for us but his fame is going to attract other engineers to help him do amazing things in the future. I do not know if he's an easy man to work for or if he inspires others to succeed or not. I hope he is both. He's definitely young enough that he will be around a long time to help see his creations unfold.
I do not know enough about the networking to comment but I do know as a former IT guy that networking in general provides efficiency in the workplace. If there is a way to network an entire neighborhood to allow sharing among the homes that would be great. My first question that comes to mind is if a person is using solar and they have excess capacity (sun is shining) to feed back into the network, I imagine everyone else with panels will have excess capacity too. So the network would have to be combined with huge batteries in a central location to tap into. Transmitting power along the lines loses power. So if the power comes off my panels, goes into the grid and into storage there is loss of power due to conversion. I guess it's more efficient than power traveling 10-20 miles from the main source.
In an already established neighborhood with no space remaining for a battery location I don't see how this would work. If there are any links to a presentation on networking power I'd take a peek.
I don't see networking power as such a great thing if the utilities are still controlling it. I don't trust them at all. I'd love to see the economics on any project where Elon would hope to make some money other than just selling batteries.�
1/1/2015
guest Mythbuster alert:
I have a PV system and I'm evaluating 3 alternatives for going off grid. SCTY is not present in my state. All I want to say is that SCTY doesn't have a patent on the idea; they may have an advantage in being able to offer a package but it's something that can be duplicated. IOW, if I can duplicate with two phone calls what SCTY is offering then that's not sustainable advantage.
The SCTY/Tesla battery configuration is only back-up for certain limited house functions; it isn't whole house storage (yet!). To go off-grid the homeowner needs to have enough stored power for a fully functioning house through the night and, depending on geographic location, enough stored power to last for 2-3 days. Wind power as back-up is nonsense unless uou can guarantee it will be windy on the days it isn't sunny.
The current TSLA battery back-up is too expensive to cover whole house needs right now. I'm hopeful that the cost will come down considerably in the next couple of years and make it more feasible. SCTY's advantage may come in an exclusive deal with the new battery gigafactory.�
1/1/2015
guest Does Apple have a patent/copyright on iOS? Does Goggle have a patent/copyright on Android?
Might Solarcity have protection on its energy management systems??? I know they own plenty of patents on mounting systems thanks to Zep...
Again, I think everyone can go off grid soon as energy storage tech costs come down with scale... it's just a matter of being able to buy and sell. If you don't care about that, then it doesn't matter. Can't discount convenience to the mass market. Have to remember, there was a reason the current utility structure developed the way it did in the first place...�
1/1/2015
guest Irrelevant IMO to the point that SCTY offers storage with PV; there are other storage (and back-up!) options out there right now.
Can SCTY come up with a better option? I don't know for certain, but I think they might.�
1/1/2015
guest I think any battery back-up is too expensive to cover whole house needs right now, if you're going to go off grid and expect high reliability. In round numbers, you should have no less than 3 days' energy use in storage; in a typical American home, that means about 90 kWh, roughly the same as the larger Model S battery pack. With power electronics, housing, etc. you're looking at something north of $25,000. Such a figure can only be rationalized (on economics alone) if grid interconnection isn't an option. The more logical solution, to my way of thinking, is some lesser amount of batteries (for normal use) plus a conventional backup generator to handle longer outages--preferably one that uses natural gas/LP. A good generator costs <$4,000, far less than the equivalent in batteries.�
1/1/2015
guest I'd have to disagree with you... management system/operating system is what makes the entire PV+storage work. Even in the article @kenliles posted above, Sunpower CEO relates the current Pv business to the landline/mobile phone transformation... in fact, Mr. Werner sounded like he was reading from SolarCity's investors brief(slide 5) (http://files.shareholder.com/downloads/AMDA-14LQRE/2751889977x0x664578/add6218d-90ec-4089-9094-4259533d473e/SCTY_Investor_Presentation.pdf) on the entire subject to be honest...
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Makes sense.�
1/1/2015
guest I would imagine SCTY might have patents covering their solution from Tesla. I don't think that or the scale will afford a stand-alone market position. The scale of the market for this solution is several years away. The scale of the GF will also scale other battery manufacturing pricing (common sub components). I think other solutions are in the works with this in mind. SCTY will have some of the best customer acquisition scaling. SPWR may be better vertically integrated (similar to a Tesla for its markets) producing a better or matched cost leverage, including patents that include higher efficiency solutions. I don't think an investment in SCTY with assumption of monopolistic control of PVC-storage is wise and so I won't partake on that assumption.
I am long SPWR, JASO, SCTY, CSIQ, JKS currently�
1/1/2015
guest I think solarcity is module brand agnostic, so panel efficiencies are probably welcomed. If less panels have to be put on roofs, labor costs/time to complete will go down as well. Would be interesting to know what the ratio of panel efficiency to install costs is? If there is a strong and proportional/disproportional correlation....
I've also inferred some potential for solarcity/tesla to possibly get into the inverter business (JB Straubel talks late last year) Inverter innovation is important to both Solarcity and Tesla, so this might not be too much of a stretch. Again, only issue is scaling, so might not be something they want to do by themselves... I guess we'll see. Zep acquisition did create a manufacturing arm of Solarcity so anything is possible...�
1/1/2015
guest And you are completely ignoring that SPWR has the backing of Total who happens to own several battery companies in its portfolio.
Tesla is using lithium ion batteries and those are far from the best solution in household energy storage. There are a lot more promising technologies in household battery storage, such as flow batteries, that will be significantly cheaper than what Tesla uses (but they couldn't use those other technologies in cars).�
1/1/2015
guest I think that's part of the point I am making. SPWR makes the best panels (and not for sale to SCTY), includes the profit of using its own panels where SCTY must profitize that component, controls it's own converters and management system, and via Total has access to many more battery solutions, and via Total has access to scaling and financial capital SCTY does not. It may not produce the better solution, but it foolish to argue those facts don't constitute one potential competitor. I think you are trying to convince yourself of your own conclusions, which carry valid points but don't necessarily conclude to the same futureproof.
The fact you recognize Werner statements as taken from SCTY play book shows promise. Suggest further looks might shed light that SCTY has not been the only one working on that shared vision, but may only be the most vocal about the work they are doing.�
1/1/2015
guest Mod Note: a number of posts got quarantined; and yes I've taken to using a chainsaw instead of a scalpel. A number of folks also received negative reputation points for wasting moderator time.
Last warning, if you all want to go onto auto-moderation keep going like this.�
1/1/2015
guest You're free to disagree but the truth is that I had battery back-up on a previous system almost 5 years ago. It's not complicated and back then they were lead acid boat batteries. Lithium Gel batteries are quite common already but as has been mentioned many times the battery cost/life is the issue. Management and switching/operating is pretty simple.
I have a full house (LP) generator as back-up (as Robert.Boston referred to up-thread) but I don't want to go off grid with that so right now I'm net metering; but, I'm also evaluating custom battery production, Lithium Gel batteries and hydrogen fuel cell to take me off-grid. Operating system is the easy part. I'm also wondering if I hang out long enough whether Tesla batteries will become a better option for me.
The SPWR CEO isn't referring to back-up in that interview you quoted.�
1/1/2015
guest First off, don't know what made you think I was referring to your system, but in the system Solarcity and what Sunpower is looking to do, does most certainly rely on software in the function/management of their PV+storage systems.
Not sure what quote I made you are referring to, but here's a couple anyway:
"RE: Last time I talked to you was about home energy management systems, do you still see a prospect of that? TW: We are doing a pilot in Australia, we are not quite ready to go into the specifics. It is primarily a storage pilot, but it makes a whole lot of sense here."
And here's one from the link on "home energy management systems" the interviewer provided in his question:
"SunPower also believes is it inevitable that storage and other home management systems will be included, possibly even extending to electric vehicles. How that all fits together remains to be seen, and will likely vary between regions and markets, depending on local policies, incentives, market design and solar resources. �What we are not saying is here is the model, you have a house , solar, and storage, and home energy management and we�ve solved it,� Werner says. �What we are saying is that those are things that we likely to offer in combinations that are not defined yet.�
update: that first quote is directly from the CEO interview @kenliles posted. The second quote is from an embedded article within the CEO interview @kenliles posted. So, you're not correct in your statement. That's the truth. That is fact.
�
1/1/2015
guest HECO pursues energy storage system so it can take more PV - Hawaii News - Honolulu Star-Advertiser
"Energy Storage is one of the key missing elements in integrating high levels of renewable energy from variable sources like solar and wind," said Colton Ching, HECO vice president for electricity delivery.
not sure if Solarcity/tesla would put in a bid for such a large system, but hey you never know... To add maybe this is an opportunity to move into Hawaii with residential storage.�
1/1/2015
guest If you recall (you can check up-thread) the discussion was about claiming SCTY had a competitive advantage by offering storage with residential systems. That's why I quoted you in my post:
My point was that storage in it's current offering is not a competitive advantage, so I wrote:
I also noted that you referred in that quote on the same subject to the landline/mobile phone reference. If you read that article then you'll see that comment was not made in connection with energy storage.
It's the one embedded in my post and re-embedded in this one a few lines back but I'm happy to re-post it for the sake of clarity [my bold]:
Now you referred to a different quote entirely and said:
So you see I was correct. Please don't imply I wasn't being truthful when your own quotes are there in black and white and clearly embedded in my reply to you.�
1/1/2015
guest Wow, where do I start... I guess I'll start by saying this is the last bit I will post on this particular debate and move on to keep the conversation moving forward...
so, this whole thing started when I said Solarcity has a competitive advantage over competitors in the Solar business because of their long standing relationship with tesla(economies of scale)as well as early start in moving to market with products which no on else is doing. Energy storage is an inevitable addition to the PV system product, so clearly Solarcity is creating the moat. Second, you said it doesn't have anything a competitor can just copy and do they same. I said they have copyright on software/operating system(my reference to iOS and Android). You said that's not relevant (the phone software/operating system comparison) and I said yes it is and referenced Werner using using wireless/landline reference of here is the direct quote from the article:
"TW: � so if you think about smart phones, or the i-phone, the shift in 2007, those product life cycles ar so fast, the conversion from land line to wireless to smart phones, the incumbents never thought that this is a good idea, so you get a little of that both here and in America."
as far as you saying that "back up" wasn't in the article I quoted, I took that as back up wasn't mentioned in the article. I had said earlier post that sunpower was behind in energy storage development compared to Solarcity reference mr. Werners comments in the article @kenliles posted. So might have been crossed intentions here...
I'm going to finish up by saying when you say "feel free to disagree but the truth is..." It comes of as implying I wasn't being truthful as well. I think it is best to leave the one-ups-man -ship alone and keep to bringing good debate and information to this forum. Only makes for a positive environment regardless if you like Solarcity or not...�
1/1/2015
guest Uh, no. This is what you said:
Tip: If you click on the little blue/white arrow after the name on a quote you'll find it's a hyperlink to the original post so that you can actually see what was written.
In any case, I'm going to stop posting in this thread completely; it gets out of hand waaaay too often so I'm limiting my participation to that of moderator for the time being.�
1/1/2015
guest I agree with Nigel. This is a very interesting topic but it seems like the conversation is dominated by very few posters with a narrow mindset. If we could just self moderate ourselves a little that would be awesome.
Also, a number of the frequent posters on here have extremely similar opinions and writing styles. Would it be unreasonable to ask them to post a picture of themselves holding a piece of paper with their username and maybe a drawing of their favorite solar setup so that we could verify we are not being trolled by someone with multiple accounts?�
1/1/2015
guest Yes, we prefer to give the benefit of the doubt.
And that's an awesome suggestion! Thank you.�
1/1/2015
guest Mod Note: one post went to snippiness.�
1/1/2015
guest This is a (great) SunPower article on the fool, but posted it here in the SCTY section, because it confirms what I have been saying about using retained value as a metric to value SCTY:
What SunPower Is Really Worth? The Answer Might Surprise You
SolarCity (NASDAQ: SCTY ) has addressed this problem by publishing what it calls retained value. This is the present value of all future cash flows from contracted projects, discounted into today's dollars at a 6% discount rate. At the end of 2013, SolarCity said it had $1.05 billion in retained value, so if the company's assumptions are correct, it could close down its operations and still generate that much value over 20-plus years.
SunPower chooses not to disclose the same numbers, in part because management feels that SolarCity's assumptions are aggressive. But it does hold assets on its balance sheet just like SolarCity does so there's value that's not shown in the $1.88 in non-GAAP earnings delivered over the past year. As its HoldCo/YieldCo strategy unfolds, even more assets will be held on the balance sheet, further complicating valuation.�
1/1/2015
guest Thanks Sleepy, excellent article.�
1/1/2015
guest Bgarret actually found the article, and it is a good one.
Edit: using retained value, the author comes up with a SPWR valuation between $50 and $150 in about 2 years. Retained value is therefore not a good metric to use to value a company as evidenced by his huge price target range.�
1/1/2015
guest Retained value is very much real for SCTY. You and 1000's of people may disagree with what retained value should be, but I'm sure the US gov/IRS has approved SCTY's method of calculating retained value. We also have no clue what products SCTY will roll out in the future to sell to these same clients. We assume this is the only agreement SCTY will enter with their clients. How do we know they won't sign another 10-15yr lease at a reduced rate most people would be crazy to pass up? We just do not know. I doubt SCTY is going to be taking down perfectly good panels from homes when they can lease them again at the appropriate price that 90% would agree to. It's going to be supply/demand for that last 10-15yrs of life on the panels. The customer will be in control of that price. If not enough customers want the panels kept on the roof then the price will come down to the point where most renew lease or buy the panels. Everyone keeps forgetting the company does have the ability to sell the panels to the client at the end of the lease. They will not be worthless which is why retained value makes sense.�
1/1/2015
guest IIRC, neither the US gov nor the IRS has a pre-determined definition for calculating retained value. I think you might be confusing the term with retained earnings or residual value which are covered by GAAP. Investors may agree or disagree with the numbers but don't rely on the government to have "approved" anything.�
1/1/2015
guest Hmmm... Or are you going to quit posting because it's simply a waste of time and you have better things to do? Sleepyhead felt the same way but he comes back in the room once in a while. I hope you'll do the same. :smile:�
1/1/2015
guest So if so-called retained value is not the best way to value these two companies, then what is? From reading the article the author basically uses the sum of future cash flows, or present value of projects, to come up with a valuation. This is what everybody's calling "retained value." Sure, the valuation has a broad range depending on a number of assumptions. Nonetheless he basically decides it's the best method and uses it to calculate a value. I can't see what SCTY should do differently in that regard. That's why I asked up-thread if the discount rate was reasonable. Nobody really knows if it's reasonable, but they have to pick a number.
I guess what I'm asking is, what's unreasonable about the way SCTY is calculating their revenue and balance sheet? If there's a better method, why didn't the author use it in his valuation of Sunpower? I'm not trying to argue, just trying to clarify...�
1/1/2015
guest Considering Elon is a lot smarter than all of us, I'm going to use his retained value vs. my own. Until someone comes up with something more reliable then I imagine SCTY has put a lot of energy into developing it's retained value and is probably more accurate than our models would be. I'd love to see a better model developed by someone who is not selling systems or heavily invested in selling vs. leasing. Obviously their opinion would be very biased. The fact that everyone seems to want to lease these panels would suggest they'll also want to renew their leases if the price is right at the end of the lease.�
1/1/2015
guest FSLR earnings appear strong and stock is up nice after-hours. SCTY seems to be up too on the news. I hope SCTY beats tomorrow as well.�
1/1/2015
guest FSLR seems to be settling barely above the days high, SCTY closed $3 down on the day, $4 down on the days high and only regained $1 after hours. Neither is cause for breaking out the champagne IMO.
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Just noting that Elon is a non-executive Chairman so his main task is leading board meetings. Yup he's much smarter than me, but you might want to consider a Chairman's actual duties before assuming that he came up with the retained value calculation personally.
Also note that a metric only has comparative value if other entities use the same calculation method.�
1/1/2015
guest The market was down quite a bit today so I wouldn't expect FSLR to jump above the high of the day but it obviously surprised to the upside which was my point. It took the sector higher in after-hours. It's a hell of a lot better than a miss or just matching expectations.
I never said Elon came up with the retained value model but obviously as chairman he's standing by the math behind the calculation. As an engineer and an even greater businessman, I'm going to go with his model over someone else's. At least until I see a much better one that makes any sense. Moaning about 7% vs. 5% is just semantics at this point. I bought the stock last August so to tell you the truth, if there was no retained value at all I would have still bought the stock at much lower levels and profited even more over the next 20 years if I hold that long. The retained value calculation could end up being conservative if oil/gas prices rise at a 5% clip going forward, which is definitely possible. We have no idea what the spread between the lease price in 20 years vs. the utility rates. 6% may end up being a high number when 20 years roll by.
I wish everyone who is negative on this stock would go ahead and short it or stay quiet. It's so easy to bad mouth a company and their models when you have zero money on the line.�
1/1/2015
guest We have shorted and bought puts on SCTY, probably for more money than most people would risk on this stock. We got lucky with timing (~$80) and took profits when the stock hit ~$52. We're still negative on the stock. We list all our trades on our site. We take real positions in crowdsourced investment opportunities where investors who publish a thesis can actually make money when we invest in their ideas.
Retained Value is smoke and mirrors. If you look at how much money the company raised in debt and equity and how little 'Retained Value' they generated it becomes exceedingly clear that SCTY won't be around 10 years from now. It may have a decent next 2 years as consumers rush to get into solar before most benefits expire in 2017. It's so obvious that I very much question the bull case that keeps getting promoted on this board as very naive at best. Some of the things that were said by Elon this year made me question his integrity as well. Elon has created a great company with TSLA and there is no need for him to pump the price of TSLA into the stratosphere. Unfortunately, I have a feeling that tomorrow will be a massive sell-off in TSLA and SCTY.�
1/1/2015
guest Then you're in the wrong place; we encourage all points of view on this forum. Informed investment decisions are much more likely to succeed.
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Mod Note: one post got moved to snippiness.�
1/1/2015
guest Perhaps TSLA is rising rapidly for some reasons. I failed to see EM pumping the stock, but I have seen him doing the opposite, tempering its rise with his comments.�
1/1/2015
guest You're correct Auzie. Elon said on tv that the stock was fairly priced if not a little overprice. I've never seen or read anything where he hyped up the stock price of SCTY or TSLA stating it was undervalued.
It's ok to bash a stock here and have it posted but the moment you come to defend the stock your posts end up in the trash.�
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