Alternative Energy Investor Discussions

[smorgasbord]

I guess my skepticism comes from investigating solar panels for my house. Solar City was in the middle of the pack of mostly local companies (I talked to about a half dozen), including some "mini-chains" (for lack of a better term for companies spread out across CA). Everyone offers leasing terms, buying terms, etc, etc. They all have similar support and maintenance plans and costs. Sunpower had the best panels (non-Chinese, higher efficiencies), and at the time was coming out with integrated inverters. Others had micro-inverters (that apparently don't last) or the larger single inverters that don't put out when your panels are partially obscured in shade. I forget what Solar City had, but it was not special at all.

At any rate, for me as a potential customer, I saw nothing in Solar City's offerings that I couldn't get elsewhere - and they weren't particularly aggressive on price. My feeling is that SCTY stock is up because Elon Musk is involved, not because the company itself has some market-beating sauce. That makes it a LOT different than TSLA. I see no reason to invest in SCTY except for momentum market plays, at which I'm not particularly good.

 

[Citizen-T]

I don't disagree with your assessment. The only thing I would say is that a lot of those other companies that you were looking at probably aren't publicly traded, and SolarCity is the market leader in the space. Anyone that wants exposure to solar is going to be buying SolarCity. It is really a call on the industry, not on SolarCity in particular.

 

[smorgasbord]

-You are correct: they do not manufacture Solar Panels. This is a good thing, they essentially can get stuff cheaper as technology improves.

So does everyone else except Sunpower, which makes a better panel.

-They aren't a financing/leasing company. This is their "hook" for people to get them onto Solar Tech. Their goal is something like network distribution and Software as a Service. Elon's cousins made a similar company with computers and sold it to Dell later on which is the true value proposition here. It's a network (this will play into my next point).

The utility companies have the network distribution, not Solar City. SaS isn't a big deal anymore.

-Overarching goal of Solarcity is to become a provider of a third type of Energy (you guessed it-- Solar). Something to the likes of National Grid, etc. The way their system is structured enables this. With Solarcity, any extra energy not used is fed back into the grid and the customer gains credit back. *This part is extremely important because it boosts SCTY's value and future prospects.

Again, it's the utilities that are doing this, not Solar City. They are just middle men.

-Battery technology. This is important as well.

None of the Solar Companies do anything with batteries directly today.

The short term fluctuations will stink but I have a target in mind that is higher than $24.

On what are you basing that target?

- - - Updated - - -

I don't disagree with your assessment. The only thing I would say is that a lot of those other companies that you were looking at probably aren't publicly traded, and SolarCity is the market leader in the space. Anyone that wants exposure to solar is going to be buying SolarCity. It is really a call on the industry, not on SolarCity in particular.

The question is whether a large national company can out sell the local companies that are more easily able to tune their offerings to the specifics of their local market. From what I saw in my own solar investigation, Solar City was not. Every local utility has different rates for electricity usage and buy-back, which affects the economics of putting solar on your house.

What's ironic is that while some blast at Tesla for profitting off the government's loans to companies and rebates to consumers, the solar industry is completely dependent on government incentives, both in terms of rebates as well as depreciation tax advantages. Without those, solar doesn't make economic sense.

 

[CyberDutchie]

I guess my skepticism comes from investigating solar panels for my house. Solar City was in the middle of the pack of mostly local companies (I talked to about a half dozen), including some "mini-chains" (for lack of a better term for companies spread out across CA). Everyone offers leasing terms, buying terms, etc, etc. They all have similar support and maintenance plans and costs. Sunpower had the best panels (non-Chinese, higher efficiencies), and at the time was coming out with integrated inverters. Others had micro-inverters (that apparently don't last) or the larger single inverters that don't put out when your panels are partially obscured in shade. I forget what Solar City had, but it was not special at all.

At any rate, for me as a potential customer, I saw nothing in Solar City's offerings that I couldn't get elsewhere - and they weren't particularly aggressive on price. My feeling is that SCTY stock is up because Elon Musk is involved, not because the company itself has some market-beating sauce. That makes it a LOT different than TSLA. I see no reason to invest in SCTY except for momentum market plays, at which I'm not particularly good.

I have a much different experience. I went with SolarCity and have been completely impressed so far. I've had four visits, one thing struck me, they are all well educated, young, very professional and very knowledgable. I can't believe all the work that is involved in navigating the local building departments, the detail that is required in the permitting process, and how they shared every step with me along the way. They went to great lengths to accommodate my situation, even took into consideration a planned addition. I just can't see any other local shop putting in that much work, and the good thing--it's all essentially free (well probably baked into the monthly lease, but that's still quite a bit lower than what I would have to pay PG&E for the same power from the grid).

Regarding the panels, they pick the most reliable panels, not the cheapest or technically most advanced. Since I signed the contract three months ago, they called me that the panels I will get are actually better and generate more output than what is in the contract. So, I'm very happy with them so far and reason I'm investing in the stock is not just Elon, but to me, their offer is just a no-brainer. Why wouldn't everyone want to get free solar panels installed on their roof and lower their electricity bill?

 

[Curt Renz]

SolarCity CFO Bob Kelly will present at the Bank of America Merrill Lynch Smid Conference in Boston today at 12:25 pm EDT. There will be a simulcast. Link to announcement: SolarCity to Present at the 2013 Bank of America Merrill Lynch Smid Cap Conference (NASDAQ:SCTY)

 

[smorgasbord]

I went with SolarCity and have been completely impressed so far.

I'm not saying SolarCity doesn't do a good job, I'm just saying that job isn't really any different than any of the other companies provide. The company is not yet profitable, and I personally don't understand what will make them profitable.

Regarding the panels, they pick the most reliable panels, not the cheapest or technically most advanced.

That's a bummer for you. As a homeowner you don't own the panels, you don't pay additional if they fail. You want the most output per dollar invested. If the panels fail every other year, so what?

Why wouldn't everyone want to get free solar panels installed on their roof and lower their electricity bill?

First, you need enough sun. I'm in the woods, so I have issues with some redwood trees.

There's the long term economics. What happens when your utility changes their rate structure? PGE is doing that in NorCal - lowering daytime rates you sell power back at while raising rates for evenings when you charge. It's precisely due to solar that they are changing the rates.

Then there's resale. What happens after the 15 (or whatever) year lease is up? You've got solar panels not producing as much, you might have roof leakage issues, and do the new owners want to deal with that?

 

[JRP3]

I mostly agree with Smorg's assessment, and I've stayed out of SCTY because I don't know how to price the stock or where it's headed. Obviously I wish I had jumped in near the IPO but at this point I don't feel confident enough to get in.

 

[jeff_adams]

I'm not saying SolarCity doesn't do a good job, I'm just saying that job isn't really any different than any of the other companies provide. The company is not yet profitable, and I personally don't understand what will make them profitable.

City of Sacramento and SolarCity Announce Completion of Solar Projects at Two City Water Treatment Plants: Business Wire Business News - MSN Money

These kinds of deals can make them profitable. They are building out their own electrical grid, with instant customers per installation. The individual sales might not mean much, but the larger grid will. People will always need to buy power.

 

[CyberDutchie]

As a homeowner you don't own the panels, you don't pay additional if they fail. You want the most output per dollar invested. If the panels fail every other year, so what?

I really don't want constant maintenance and troubleshooting on my roof, just as I would rather not bring my car in for service multiple times a year.

There's the long term economics. What happens when your utility changes their rate structure? PGE is doing that in NorCal - lowering daytime rates you sell power back at while raising rates for evenings when you charge. It's precisely due to solar that they are changing the rates.

You will get screwed by PG&E no matter what. I live in a small home on a small lot and the consumption of a "similar" house that they base the tiered rates structure on is such that I'm always up to tier 4 and now tier 5. I just wonder, these "similar" homes, don't they have TVs and a computer and a washer/dryer?

 

[kenliles]

yeah- I'm mostly in smorg camp here with the exception of the network play. I think the public grid and utilities will serve as a capital put while SCTY uses it to establish their power generation network. In the end, this may be the cheapest distributed fusion reactor ever created, that stealthily reverses the network flow. I have a small amount of SCTY stock that's betting on that play- but due to similar concerns expressed I keep it meaningful but not substantial (unlike TSLA)

 

[c041v]

I'm wondering if SCTY will experience and bleed air from TSLA's impending run. It has been mentioned that Elon's involvement alone could be manipulating the price...

 

[Citizen-T]

Oh yeah. It's up more than 4% after hours today. I'm sure there are people buying it as a "cheap TSLA". Or there are shorts that are changing their mind about taking on an Elon company.

 

[Curt Renz]

SolarCity builds Tesla Motors' Supercharger stations. Elon, the chairman of both companies, will make what he calls a "big" Supercharger announcement next week. That will likely be an important element in his rolling thunder campaign for Tesla, which could also have a major impact on SolarCity.

 

[ShortSlaver]

Oh yeah. It's up more than 4% after hours today. I'm sure there are people buying it as a "cheap TSLA". Or there are shorts that are changing their mind about taking on an Elon company.

In all the TSLA excitement I didn't even notice this. This makes me happy! I almost sold all my SCTY to throw major dice on TSLA right before the close today but decided I have plenty and more of myself leveraged in TSLA so I kept it alone and hey, pleasant surprise!

 

[Citizen-T]

SCTY moving with TSLA again today.

 

[kenliles]

congrates to those that added at $23-$24

 

[ShortSlaver]

Helluva a day here, so busy with TSLA I didn't even notice how nice it went over here too! Wallet is feeling fat with the Musk ETF.

 

[Neech]

SolarCity builds Tesla Motors' Supercharger stations. Elon, the chairman of both companies, will make what he calls a "big" Supercharger announcement next week. That will likely be an important element in his rolling thunder campaign for Tesla, which could also have a major impact on SolarCity.

I've read that Solar City is releasing their Q1 reports on Monday. More good news I hope.

 

[smorgasbord]

What would make SolarCity's Q1 report justify the recent steep price increases?

Maybe today's the day to buy some Puts...

 

[Citizen-T]

What would make SolarCity's Q1 report justify the recent steep price increases?

That's exactly what I said about Tesla...