SolarCity (SCTY)

[Skotty]

It really is simple math and it just doesn't add up in favor of residential solar. But please try to explain how residential solar will become viable using math.

As noted earlier, math is not always required, so long as the cost is tolerable. Sometimes it comes down to politics and ideologies.

Utility doesn't install solar --> I install my own solar

 

[Perfectlogic]

As noted earlier, math is not always required, so long as the cost is tolerable. Sometimes it comes down to politics and ideologies.

Utility doesn't install solar --> I install my own solar

Utilities do install solar, more than half the planned capacity additions this year is solar. Utilities chooses the lowest cost solution, pretty sure they are also required to do that. As utility scale solar becomes cheaper and cheaper, the utlities will install more and more.

 

[Skotty]

Utilities do install solar, more than half the planned capacity additions this year is solar. Utilities chooses the lowest cost solution, pretty sure they are also required to do that. As utility scale solar becomes cheaper and cheaper, the utlities will install more and more.

I'm not seeing it in my neck of the woods. I need to do more research to try to figure out what's planned in the future, but right now it looks like this:

http://www.kcpl.com/~/media/Images/Kcpl/About_KCPL/Company_Overview/GenerationMix.jpg

Also, lowest cost solution is often not the best metric when choosing solutions that impact people's safety and security.

 

[jhm]

look at today's net demand, California ISO - Todays Outlook and consider what would've happened if California had a nice breeze occurring while the sun was shining.

next year solar = this years solar + wind

Fun to watch. The forecasted peak demand is about 30 GW. Net demand at 11AM is down to 18GW, a little lower than early morning.

The peak tomorrow is forecasted at 32 GW. So imagine if this ISO had 32 GWh of battery capacity under its influence. The peak of 32 GW (after sundown) could be reduced by 8 GW from storage and the bulk of 32GWh spread out around this peak. So net demand gets capped at 24GW. It seems this would go a long ways towards minimizing the use of peak power plants. Moveover, these batteries can be charged when there is least need for baseload power, so base load or intermediate load plants do not need to ramp down or suffer low demand. This supports the price for baseload and maximizes its utilization. So the whole duck curve problem is resolved with about 1 hour of storage (1 hour times peak demand 32 GW).

So much of our hand wringing is brushed aside once storage gets to the 1 hour scale and beyond. Of course, it will take more than a couple of Gigafactories to build this out globally, but there are plenty of battery makers willing to step up as this market cracks open. But then there are all the legacy issues about what to do with some 8 GW of peaking capacity that only gets used a couple of hours each year if that. The basic answer is that we stop adding new peaking capacity and stop replacing at retirement. It's the same problem facing coal plants. It may take a decade just to build up 1 or 2 hours of storage, so that allows for a decade or so of depreciation. I think in five year's time, we'll have a very different view of how a grid should function, what's needed and what's no longer needed.

 

[TheTalkingMule]

Here's what the German energy picture looked like on Sunday. Ask yourself how the very rational German regulatory bodies will handle this.

Germany had so much renewable energy on Sunday that it had to pay people to use electricity

On Sunday, May 8, Germany hit a new high in renewable energy generation. Thanks to a sunny and windy day, at one point around 1pm the country’s solar, wind, hydro and biomass plants were supplying about 55 GW of the 63 GW being consumed, or 87%.

Power prices actually went negative for several hours, meaning commercial customers were being paid to consume electricity.

Last year the average renewable mix was 33%, reports Agora Energiewende, a German clean energy think tank. New wind power coming online should push that even higher.

“We have a greater share of renewable energy every year,” said Christoph Podewils of Agora. “The power system adapted to this quite nicely. This day shows again that a system with large amounts of renewable energy works fine.”

Critics have argued that because of the daily peaks and troughs of renewable energy—as the sun goes in and out and winds rise and fall—it will always have only a niche role in supplying power to major economies. But that’s looking less and less likely. Germany plans to hit 100% renewable energy by 2050, and Denmark’s wind turbines already at some points generate more electricity than the country consumes, exporting the surplus to Germany, Norway and Sweden.

 

[Skotty]

Critics have argued that because of the daily peaks and troughs of renewable energy—as the sun goes in and out and winds rise and fall—it will always have only a niche role in supplying power to major economies. But that’s looking less and less likely. Germany plans to hit 100% renewable energy by 2050, and Denmark’s wind turbines already at some points generate more electricity than the country consumes, exporting the surplus to Germany, Norway and Sweden.

I don't think critics have been completely proven wrong here. I think it's highly likely that we will need a massive infusion of energy storage for everyone to get primarily on solar. However, I am bullish on the future prospects for battery storage, especially with Tesla's work on the Gigafactory. Pumped storage can help in certain places too where the environment allows; any utilities doing that yet?

 

[doggusfluffy]

Yes, and national companies can not profitably install home appliances. This is one of my primary arguments for solarcity as a stupid business model.

I don't view SolarCity as merely installers. If you are talking about their new New York business model they are a solar utility, selling electricity directly to consumers cheaper than the utility. They will be design, manufacture, install, manage and maintain and bill clients in an end to end chain. I think of them as having an agile business model capable of adapting to a chaotic market and scale will benefit their operation with the regulatory clarity they mentioned.

 

[jhm]

I'm not seeing it in my neck of the woods. I need to do more research to try to figure out what's planned in the future, but right now it looks like this:

http://www.kcpl.com/~/media/Images/Kcpl/About_KCPL/Company_Overview/GenerationMix.jpg

Also, lowest cost solution is often not the best metric when choosing solutions that impact people's safety and security.

Holy cow, that's a lot of coal, even for 2013! Keeping the Koch brothers in politics, is this? No wonder you want out of a system you never chose to be a part of.

 

[ggies07]

This article was posted in another thread, but thought this statement was relevant with the current discussion going on in here right now:

Tesla Supplier Sees `Extreme Growth' Making Utilities Smarter

“The old hierarchy was a few power plants but we’re reinventing that -- we’re making a distributed production and storage market.’’

 

[electracity]

I don't think critics have been completely proven wrong here. I think it's highly likely that we will need a massive infusion of energy storage for everyone to get primarily on solar. However, I am bullish on the future prospects for battery storage, especially with Tesla's work on the Gigafactory. Pumped storage can help in certain places too where the environment allows; any utilities doing that yet?

For this stock to still have upside solarcity needs a competitive advantage. What the barrier to entry in any of solarcity's businesses? The primary reason investment in renewable companies generally suck is the commodity nature of the business. Revenue is easy in business - just buy a lot of gas stations. The hard part is ROI. Good ROI needs IP or other barriers to entry.

Storage will likely be commodity-like too. I don't see why it would be different than making or installing PV.

 

[jhm]

For this stock to still have upside solarcity needs a competitive advantage. What the barrier to entry in any of solarcity's businesses? The primary reason investment in renewable companies generally suck is the commodity nature of the business. Revenue is easy in business - just buy a lot of gas stations. The hard part is ROI. Good ROI needs IP or other barriers to entry.

Storage will likely be commodity-like too. I don't see why it would be different than making or installing PV.

Oil and gas are commodities. Yet Exxon is a pretty impressive company and does alright by their investors.

 

[Perfectlogic]

I'm not seeing it in my neck of the woods. I need to do more research to try to figure out what's planned in the future, but right now it looks like this:

http://www.kcpl.com/~/media/Images/Kcpl/About_KCPL/Company_Overview/GenerationMix.jpg

Also, lowest cost solution is often not the best metric when choosing solutions that impact people's safety and security.

Electricity generation capacity has a lifetime of something like 40 years, only recently has the transition to solar and wind begun as it is only recently renewables has become competetive on price. The transition to 100% solar and wind won't happen overnight, that is just impossible. It will probably happen in 15-20 years.

 

[jhm]

Electricity generation capacity has a lifetime of something like 40 years, only recently has the transition to solar and wind begun as it is only recently renewables has become competetive on price. The transition to 100% solar and wind won't happen overnight, that is just impossible. It will probably happen in 15-20 years.

Over the last decade in the US, massive coal capacity has been shut down and largely replaced with natural gas. This trend was already in place by 2013. Natural gas is extremely cheap in the US, ~$2/MMBtu.

 

[Perfectlogic]

Over the last decade in the US, massive coal capacity has been shut down and largely replaced with natural gas. This trend was already in place by 2013. Natural gas is extremely cheap in the US, ~$2/MMBtu.

I know, but even here at this historical low price it still translates to 3-4c/kwh I believe, which is comparable to current solar prices in top US locations. Someone in this thread linked to a project in California at something like 3.7c/kwh I believe it was.

 

[electracity]

Oil and gas are commodities. Yet Exxon is a pretty impressive company and does alright by their investors.

Exxon has created many barriers to entry and also established IP.

I have never worked in solar or similar. Yet today I could sell and install solar systems.
What would be my odds of success if starting a deep water drilling business? Fracking also sounds interesting. I'll start by digging some holes in the backyard. Anyone know what I put in the hole to force oil out?

 

[dandurston]

Any thoughts on the price action today? Maybe some large buyers (funds, elon?) picking up shares in the morning driving the price up and then a gradual return the more normal boost we'd expect based on oil going up?

We might see morning boosts the next fews mornings if parties are establishing positions.

 

[jhm]

Exxon has created many barriers to entry and also established IP.

I have never worked in solar or similar. Yet today I could sell and install solar systems.
What would be my odds of success if starting a deep water drilling business? Fracking also sounds interesting. I'll start by digging some holes in the backyard. Anyone know what I put in the hole to force oil out?

Why don't you write some battery aggregation code and go into business as a DER aggregator? That ought to be pretty easy, don't ya think?

 

[electracity]

Why don't you write some battery aggregation code and go into business as a DER aggregator? That ought to be pretty easy, don't ya think?

Yes I do, as application programming is my primary technical skill. There are literally hundreds of firms, big and small, in this space. If SCTY has some success in this space it will be due to the right strategy, not their ability to implement tightly defined specifications.

There is an enormous difference in the challenge of implementing DER aggregation compared to something like autonomous car. Not only is DER aggregation straightforward, but doesn't produce defensible IP.

Since I have never fracked or drilled in the arctic, these areas seem like a pretty big deal.

 

[dandurston]

Fracking and drilling are pretty straight forward, which is why we see everyone fracking today and not just the one or two companies who developed the technology. The barrier to entry isn't the IP, it's the vast capitol requirements, which incidentally are also the biggest challenge for companies like SCTY.

 

[jhm]

Is this the end of the centralised energy network?

This is a nice illustration of grid economics. Western Australia is very spread out with lots of remote, sparsely populated areas. Most of the network is unprofitable to operate and the WA government must subsidize the network to the tune of $500 per family (per year, I suspect).

So the network operator is experimenting with microgrid and thinly connected modular grid concepts. Some communities will be completely islanded.

So it's always been an unprofitable idea to operate a grid here, but distributed generation and storage technologies are bringing to light alternatives that may prove more economical.

This is one reason why it is very important to consider the locational value of distributed energy. Certainly a state like Nevada faces the same challenges as Western Australia. There are lots of remote little communities more than 60 miles from the nearest grocery store. (I've actually visited several of these communities.) Maintaining 60 miles of power lines to serve a dozen families just cannot make economic sense. So NV Energy stands to reduce costs spread out to all customers encouraging solar and batteries and working toward detached or thinly connected microgrid solutions.