SolarCity (SCTY)

[TheTalkingMule]

Convince me that PPA isn't going away. Every time I read a head-to-head price comparison, it tells me people are better off (a) buying outright, which is obvious, no interest costs, and (b) getting a home improvement loan, which is the thing which threatens to kill PPAs.

You'll just have to figure that one out for yourself. From my perspective....I'm a childless solar nut with great credit who built my own deck and I'm still actually considering SCTY instead of a straight install. I want access to SCTY's services down the line and like the idea of being able to seamlessly jump from solar to battery to microgrid all while staying right at the cusp of the tech curve at no cost..

I also kind of like the idea of doing it myself and then maybe talking microgrid with SCTY in 6-10 years. I'm personally on the fence and will likely buy, but I'm 38 and I don't see the majority of my 2+ child friends ignoring the simpler route with a premium. The trend is clearly toward "____ as a service" and that's just what SCTY provides. Everyone wants to "go solar", but is turned off by the hassle. Sadly they care, but not THAT much.

 

[doggusfluffy]

This was the free blurb from the Morning Energy page. It sounds to me like the utility is at least trying to adapt, in California anyway, and officially recognizes the benefits of distributed generation to the utility itself. I couldn't find any other news on this proposal.

CALIF. COMMISSIONER PROPOSES TO UNDO UTILITY BUSINESS MODEL: A member of the California Public Utilities Commission yesterday floated a plan to shake up the utility business model in the state. Commissioner Mike Florio's proposal would have the state’s three largest utilities identify locations where the benefit of adding new distributed generation, such as rooftop solar, would exceed the cost and, with the CPUC’s approval, arrange for those projects to be built. Local customers could propose to have their projects included in the plan. Although the exact formula has to be worked out, Florio envisions utilities would receive an incentive payment of 3.5 percent above what the distributed generators are paid. Florio is seeking comment on his proposal by May 2.

 

[TheTalkingMule]

Shorts covering today I presume? Maybe they've decided to flee their positions in TSLA and SCTY en masse.

 

[jhm]

Bonaire, this thread has spent at least 100 pages debating PPA. It's a pet issue of SolarCity bears. I've lost interest in debating it further. If you see some way for SolarCity to grow faster without offering PPAs to their customers, I'd be interested.

 

[neroden]

Another angle on this is that utilities and industrials have used PPAs for quite a long time. I've heard no one suggest that one day utilities will abandon buying PPAs because it is somehow inferior financing to alternatives. If PPAs are good for utilities and commercial entities, why not residential?

Utilities are actually prohibited from owning generation where I live. PPAs are their only option. Industrial and commercial operators who have the cash or decent financing rates usually do take the cheaper option of owning outright.

 

[jhm]

Utilities are actually prohibited from owning generation where I live. PPAs are their only option. Industrial and commercial operators who have the cash or decent financing rates usually do take the cheaper option of owning outright.

Sure there are occasionally regulatory reason, as well as tax, balance sheet and other strategic reasons for PPAs. PPAs are a form of off take agreements widely used in many industries. For example, one could argue that airlines would be better off owning oil refiners directly for the fuel they need. And by extension they should own the oil pipe lines and oil wells as well. Yet many airlines are content to have forward purchase agreement with a fuel supplier. Off take agreements of all sort are important strategic options. And this is no less true when the product is electricity. Sophisticated power buyers know how to work through all the details to arrive at the best choice for them.

 

[doggusfluffy]

Mexico solar capacity to surge 521% this year, says GTM Research

"Clearly the solar industry globally has seen an opportunity in Mexico that has already been acknowledged by the likes of SolarCity last year," wrote GTM’S Mohit Anand. "Low labor costs, excellent irradiation, a stable economy, and a strong PPA by a government-backed utility in the auction are some of the common reasons why local developers and experienced international players alike have flocked to Mexico for a piece of the solar pie."

 

[Yonki]

Does anyone know what's driving this awesome upward SCTY march? TSLA halo effect? Gradual acceptance of importance of solar (despite some pending solar bankruptcies)? Shorts slowly getting out? All my dreams finally coming true?

 

[TheTalkingMule]

Does anyone know what's driving this awesome upward SCTY march? TSLA halo effect? Gradual acceptance of importance of solar (despite some pending solar bankruptcies)? Shorts slowly getting out? All my dreams finally coming true?

Probably all those things.
Loosening of the corporate bond market.
Far less worry of a global or US recession.
Jobs reports.
The election primaries.

I still think we drift up toward that semi-pessimistic $50 level over this month then do the 20% tank after earnings in May. That being said, I've timed this wrong so many times, my guesses should probably be taken as the exact opposite of eventual reality.

If Nevada resolves itself either locally or federally, that could be the big symbolic trigger. Perhaps that's happening in the background as part of that Senate energy bill seemed to have fizzled.

May have to bite the bullet and buy the final batch of 2018 options, but will wait til some folks hopefully take profit and we drift back down.

 

[doggusfluffy]

Probably all those things.
Loosening of the corporate bond market.
Far less worry of a global or US recession.
Jobs reports.
The election primaries.

I still think we drift up toward that semi-pessimistic $50 level over this month then do the 20% tank after earnings in May. That being said, I've timed this wrong so many times, my guesses should probably be taken as the exact opposite of eventual reality.

If Nevada resolves itself either locally or federally, that could be the big symbolic trigger. Perhaps that's happening in the background as part of that Senate energy bill seemed to have fizzled.

May have to bite the bullet and buy the final batch of 2018 options, but will wait til some folks hopefully take profit and we drift back down.

I think it's also becoming clear to many investors that the Tesla Gigafactory is now on hyper expansion planning and not a fairy tale. No matter what the utility monopoly tries to impose, solar + Powerwall can compete directly with the increasing retail grid prices. Plus the Riverbend payments are back on track and the Senate is debating a solar friendly metering policy, supposedly, I think.
Lots of blue sky perhaps?

 

[TheTalkingMule]

Looks like pressure is mounting from all sides to get the Senate energy bill passed, so perhaps that's a reason for the upswing. Two idiots from Utah and Florida(shocking) are holding the whole thing from getting a vote. Pretty much a walk if it can just get to a vote.

Flint, energy bill talks stall in Senate

It is my understanding that any changes to net metering in any state would be required to account for the benefits of solar to all ratepayers when attempting to revise net metering rates. Essentially, they'd need to use realistic math and accounting rather than just look at costs. Since solar is going to be more efficient(cheaper) in almost any scenario, this means net metering will be very hard to challenge. Also somewhat locks in grandfathering of net metering rates for existing solar customers. You can imagine how huge this all would be for SCTY.

 

[kenliles]

Nice update and run down on the SC Buffalo factory
A Gigafactory Is Rising in Buffalo, And It May Change the Solar Energy Industry

 

[Jack6591]

SolarCity Closes $150 Million Non-Recourse Financing Facility with Credit Suisse for Commercial Solar and Battery Storage

New financing information.

 

[TheTalkingMule]

I like how they included commercials for their hardware partners in the release. They're learning.

No cost info though? I assume that means it's ugly.

 

[TheTalkingMule]

Ex FERC chair joins SCTY as Chief Policy Officer. I like the sound of this.

 

[TheTalkingMule]

$188M in the second tax equity deal. Money is flowing, we just need some federal protection for net metering.

 

[dakh]

Warmed up to an idea of picking up some OTM LEAPs.. Alas, J17's are too close (or put other way, not cheap enough) and J18's too expensive.

 

[Jack6591]

Ex FERC chair joins SCTY as Chief Policy Officer. I like the sound of this.

Wellignhoff is tremendous additional to Solarcity. Perfect background in legislative & regulatory matters, with the right mindset regarding electric vehicles and renewable energy.

 

[jhm]

Mexico solar capacity to surge 521% this year, says GTM Research

Holy frijoles!

 

[jhm]

Elon Musk on Twitter

SolarCity is getting some free tie-in publicity from Tesla. Riding the Model 3 wave could be a good thing for SolarCity. Market, yes, but also policy. Consider net metering for a family with two EVs. They need about 20 kWh extra each night for charging. This could be variable, but even just night time demand should be attractive to utilities. Policy makers will need to think through how best to support EV charging and rooftop solar. Utilities need to consider what they lose when a two EV family goes offgrid. Residential consumption coukd rise from 30 kWh per day to 50 kWh. That's a 60% growth opportunity that utilities won't want to miss out on.