You have to look at the SCTY value proposition and work backwards.
If their competitive advantage is based on the ability to create a convoluted financing scheme that removes all the hassle and up-front money from the process of "going solar", would they want to hand the blueprint to SUNE?
You are quite correct, of course. It is quite possible that they have a supremely profitable financing scheme and have managed to keep it opaque enough that nobody else can clone it. If you're right, then it's a great investment. I am not comfortable say8ing that they're right.
It's 2016, folks like SBenson and institutional investors can take the data available and create their own simplified model that loosely represents the inputs/outputs of the SCTY model to gauge approximate profitability. We know install costs, we know the amounts "financed", we can back out installs from total expense and see how much debt is being built up to expand.
But not the rates.
But that's not even the most important part of their product, anyone can finance and banks are now working with local installers to provide a million different near-zero-down products for purchases.
That's the lack of competitive advantage which I worry about.
What SCTY provides is truly full service solar at a price that's lower than what your utility charges. As we move through this transition period people are going to need a full service energy provider to guide them through the various stages.
So basically you're saying they're going to be able to charge a premium because people are lazy, won't do their homework, and will want a "turnkey" solution. OK; that makes sense. I don't see why that can't be cloned by, well, anyone, including local installers. The financing is harder to clone.
We are making our won power now, a third party having your back with things like storage solutions will be a vital for keeping costs down.
As for cheaper grid prices.....Utilities are quietly
divesting from production in the US just like they
did in Germany once distributed solar gained any traction, there is simply no money in fossil production once distributed solar is in place. Does that sound like a scenario where grid rates will ever go down?
Um.... yes?
I live in New York. Our utilities were already required to divest from production, years ago. All the power plants are "merchant plants". Utility-scale wind and solar can sell into this market with great success, as you might expect.
Once an open market is created a few years down the line, solar homeowners will likely see some insanely cheap juice on offer from the new grid, but with transmission charges that's unlikely to be a compelling purchase options. Especially since they'll have all the juice they want at the very same time.
Transmission charges have already been raised to cover transmission costs where I live. Transmission costs are at 4 cents -- it might go up to 7, maybe, but probably won't go up at all. There's also a flat service charge per month of $15/month for having a grid connection at *all*, and *this* actually is fairly likely to go up.
Add 4 cents for transmission to future utility solar at 4 cents or less, and you have 8 cents/kwh. Good luck beating that with rooftop solar. Rooftop solar has some value due to grid-independence, but it's actually going to be quite tough for rooftop solar to compete with the grid on price.
Now, if you can go completely off grid and cut the monthly "grid access fee", you have a better value proposision. But *here*, to go off grid you need to be able to ride out a snowstorm: SCTY is simply not selling a system which will do off-grid in the Northeast, and has no plans to do so, as far as I can tell.
SCTY can and will be able to charge a massive premium to local installers because they provide considerably more value than simply installed solar panels(Keeping in mind that SCTY installs at a loss in newer markets like southeast PA). With the trajectory of installation costs and the rapid spread of solar knowledge throughout the customer base, this will all shake out in a matter of a few quarters. The PPA model will either remain compelling or will be trimmed by super low cost installs, that's for the individual investor to decide. I see the market as 50/50 PPA/purchase today and in the future. As things gets more complex over the next couple years, it may even shift more toward full service PPA.
In territories like NY where the transmission operator has completely divested from generation, I see residential retail-level PPAs dying completely because they will be more expensive than grid power. Perhaps looking at different utility territories is giving us different perspectives. I think of the NY model as being the future, but it's possible that stupidity will reign in other states...
The battery business is another matter entirely; I see the battery business as competing with the cost of *upgrading your electrical service*. Most people's heavy electrical loads don't last long. A big enough battery could be an alternative to upgrading to 400 amp service, and for *that'* a battery is quite competitively priced. But Tesla owns the value in the batteries, not SCTY...
