SolarCity (SCTY)

[drinkerofkoolaid]

I wouldn't call this range bound, even though that's technically what it is. I think the market is waiting to see how the hundreds of billions of dollars that have been pledged to Solar, Electric Vehicle, wind, and other clean energy projects will be invested. The U.S. Government has basically officially announced support for Solar City. Also, Elon and his friends have very deep pockets. Let's see what happens. Elon bought $100 million in stock at $50, as did many big funds that tend to buy for the long term.

During the conference call, one of the analysts stated his opinion that the market is not pricing in anything beyond 2017. I think this is correct. I think the market is pricing in a scenario where incentives disappear, which is a bit strange since Solar City would likely be the least effected, because of its allies and partners who would gladly invest money in Solar City projects. A less than 1% delinquency rate is unheard of.

Very confusing that Solar City entering into more states and Mexico is being completely ignored. I think it might be due to investors having trouble visualizig what Solar City will look like in 2020.

SolarCity to Acquire ILIOSS, Expand to Mexico

 

[Noble Ninja]

Sigh. Range bound between $50-$60 continues...

One month of profit growing just to be wiped out in two days. This is the second time I thought SCTY would consolidate above $60. Last time was when it was ~$63 back in May. We're down 8% twice in a row with no news directly related to SCTY. Even with most of the solar sector down, SCTY shouldn't be down -16% in two days as the company fundamentally hasn't changed.

It went down an identical 8% yesterday along with TSLA. Coincidence??

 

[jhm]

SunEdison continues to slide, and I think that may be spooking investors in SolarCity and any other solar leasing company. See this article, for example:

SunEdisons Losses Become a Red Flag for Investors - NASDAQ.com

It may take the market to see the relevant differences between SolarCity and SunEdison. The biggest I think is that SunEdison had been pursuing a horizontal growth by acquisition strategy and had exposed their productive assets to the market through the TerraForm yieldco spin off. So they may have an overextended and fragile capital structure. By contrast SolarCity generates organic growth and pursues a vertical acquisition strategy aimed at optimizing its value chain. I am glad they have not spun off a yieldco or highly leveraged their book. This puts them in a position to use cash flow from the PowerCo to directly fund the DevCo. If the market beats the crap out of TerraForm, SunEdison may find itself largely cut off from this cash flow.

So we should probably have robust discussion here on the differences and similarities of SunEdison and SolarCity.

 

[Foghat]

I wouldn't call this range bound, even though that's technically what it is. I think the market is waiting to see how the hundreds of billions of dollars that have been pledged to Solar, Electric Vehicle, wind, and other clean energy projects will be invested. The U.S. Government has basically officially announced support for Solar City. Also, Elon and his friends have very deep pockets. Let's see what happens. Elon bought $100 million in stock at $50, as did many big funds that tend to buy for the long term.During the conference call, one of the analysts stated his opinion that the market is not pricing in anything beyond 2017. I think this is correct. I think the market is pricing in a scenario where incentives disappear, which is a bit strange since Solar City would likely be the least effected, because of its allies and partners who would gladly invest money in Solar City projects. A less than 1% delinquency rate is unheard of.Very confusing that Solar City entering into more states and Mexico is being completely ignored. I think it might be due to investors having trouble visualizig what Solar City will look like in 2020.SolarCity to Acquire ILIOSS, Expand to Mexico

Vermont is expected to be announced on Monday, which is now the 19th state. Mexico market is to be like California growth from 2010 to now soon... Not to mention the massive order on Powerwall + storage package to start being installed in Q4. NY state stakeholder said they are already looking for sites to expand on the 1gw Solarcity factory already... All the $7.7bln in current solar contracts are locked in current net metering compensation schedules for the life of their contracts, so a current 4.9bln market cap is completely nutty.Besides all the possible negative catalysts mentioned in comments, I can only offer that Nevada is ruling on extending the cap next week. Early indicators might suggest they WILL NOT extend the cap and grind the Nevada solar business to a stop. This could create a lot of negative press and so might cause some traders to act accordingly right now. Also, an article came out that 60% of all utilities are looking to revise net metering and that usually means for the worst. This is in addition to the California utilities looking to lower net metering and adding fixed fees.Again, regulatory uncertainty is mounting and that causes many to jump to the sidelines until some stability returns. I'm one to continue to accumulate right now because I'm betting DG wins big time when all is said and done.

 

[jhm]

I wouldn't call this range bound, even though that's technically what it is. I think the market is waiting to see how the hundreds of billions of dollars that have been pledged to Solar, Electric Vehicle, wind, and other clean energy projects will be invested. The U.S. Government has basically officially announced support for Solar City. Also, Elon and his friends have very deep pockets. Let's see what happens. Elon bought $100 million in stock at $50, as did many big funds that tend to buy for the long term.

During the conference call, one of the analysts stated his opinion that the market is not pricing in anything beyond 2017. I think this is correct. I think the market is pricing in a scenario where incentives disappear, which is a bit strange since Solar City would likely be the least effected, because of its allies and partners who would gladly invest money in Solar City projects. A less than 1% delinquency rate is unheard of.

Very confusing that Solar City entering into more states and Mexico is being completely ignored. I think it might be due to investors having trouble visualizig what Solar City will look like in 2020.

SolarCity to Acquire ILIOSS, Expand to Mexico

Wow, Elon bought $100M at $50. I did not catch that. What sort of rate of return does it take to get Elon to invest cash.

I wonder if Musk might do this sort of thing with Tesla stock as a potential prelude to a capital raise. In a capital raise with equity, he wants to buy shares to retain his fractional ownership of the company. Buying low could be smart on his part. Serious bear trap potential.

 

[SBenson]

Wow, Elon bought $100M at $50. I did not catch that. What sort of rate of return does it take to get Elon to invest cash.

I wonder if Musk might do this sort of thing with Tesla stock as a potential prelude to a capital raise. In a capital raise with equity, he wants to buy shares to retain his fractional ownership of the company. Buying low could be smart on his part. Serious bear trap potential.

I think drinkerofkoolaid is referring to late 2013 when they did a raise. Musk bought shares as part of the raise for $46.54. I don't see Musk buying anything new.

- - - Updated - - -

Just briefly glanced over the CC transcript. Lots of talk about 2017 and ITC expiration. Management gave out lots of details. Worth listening to the audio (which I will do shortly).

 

[drinkerofkoolaid]

I think drinkerofkoolaid is referring to late 2013 when they did a raise. Musk bought shares as part of the raise for $46.54. I don't see Musk buying anything new.

- - - Updated - - -

Just briefly glanced over the CC transcript. Lots of talk about 2017 and ITC expiration. Management gave out lots of details. Worth listening to the audio (which I will do shortly).

Yes, those are the shares I'm referring to. Also, John Fisher, who is on the Board of Directors of Solar City has been buying a lot of shares. All of his sell orders appear to be automatic, and are likely for tax reasons. However, I'm a bit confused by the SEC filings. How did he go from holding 7,159,762 shares, to holding 293,963? Is this a glitch? Did he transfer the shares to his fund?

If any bank, company, state, or other entity says it is either loaning Solar City a few billion dollars, or is providing Solar City with a $5 -$10 billion credit line, the stock will double or triple in a week. $5 billion is a very small market cap, when you realize the long term potential for Solar City, and the amount of money that is about to be invested in and made available to companies such as Solar City. Impact investors alone could easily cause Solar City to double.

 

[sahanim]

SunEdison continues to slide, and I think that may be spooking investors in SolarCity and any other solar leasing company. See this article, for example:

SunEdisons Losses Become a Red Flag for Investors - NASDAQ.com

It may take the market to see the relevant differences between SolarCity and SunEdison. The biggest I think is that SunEdison had been pursuing a horizontal growth by acquisition strategy and had exposed their productive assets to the market through the TerraForm yieldco spin off. So they may have an overextended and fragile capital structure. By contrast SolarCity generates organic growth and pursues a vertical acquisition strategy aimed at optimizing its value chain. I am glad they have not spun off a yieldco or highly leveraged their book. This puts them in a position to use cash flow from the PowerCo to directly fund the DevCo. If the market beats the crap out of TerraForm, SunEdison may find itself largely cut off from this cash flow.

So we should probably have robust discussion here on the differences and similarities of SunEdison and SolarCity.

i think we should start a sunedison thread in these forums thats alongside the SCTY one.

 

[jhm]

What SolarCity Will Do for Mexico : Greentech Media

Another good article on SolarCity's prospects in Mexico. Author seems to down play residential, but elsewhere SolarCity has been affirmative about this segment. I also see community solar as a huge play here. The basic problem with residential is that the first 100 kWh or so are set at a really low rate. Essentially this is subsidized power for low use residents. The rates go up with usage tiers. So high use residents are the market for residential storage. But let's face it a home that only uses 200 kWh per month is not going to be a prime installation site. This is where community solar becomes much more interesting. SolarCity can use virtual net metering to take surplus power elsewhere and sell like 100 kWh at say 13 c/kWh to a home the buys the first 100 from the grid at 11 c/kWh but would otherwise pay 21+ c/kWh for anything above that. So these are small sales, but virtual net metering reduces this to signing up subscribers and minimal account maintenance. Another thing to consider is that the exist grid rate plan may be inhibiting residents from using more energy. This is good from a conservation point of view, but 100 kWh per month is really quite small energy use. By comparison the average US home uses 10 times as much. Even 200 kWh per month support lights, refrigerators, and consumer devices, but not air conditioning. So community solar at say 15 c/kWh could become the price point where middle class residents can finally get A/C. Electric vehicles also become an option when lower priced surplus per is brought to market. So we might view electricity sales in Mexico as largely demand constrained. Bringing lower cost electricity to market will increase consumption and substantially improve quality of life. By contrast in the US market, residents pretty much use as much electricity as they like, but will switch to solar to save money on the energy they consume. In Mexico, we may see that consumers sign up for solar not so much to save money, but to be able to consume more energy.

An interesting adjunct business for SolarCity to consider would be to install A/C along with solar. Clearly the installation skills of SolarCity could be brought to bear on squeezing the cost out of installing A/C while the marketing and financial resources can package this into a fully financed deal. A Solar A/C Lease that cools your home and saves money on your power bill could be quite a compelling offer.

 

[drinkerofkoolaid]

Can anyone explain what this SEC Filing means?

John Fisher, who is on the Board of Directors of Solar City, and is one of the largest shareholders, has been buying a lot of shares. I think this means he recently transferred almost all of his shares to his funds. What are some reasons he might do this?

How many shares does he own?

One of the only explanations I can think of is if the entities, that he just happens to be a part of, have been secretly accumulating a lot of shares. They might not need to disclose the amount of shares they own or have exposure to. It look like the number of shares directly owned by all of the funds he is a part of is between 10 and 15 million. Is this correct?

NASDAQ | SEC Filing

 

[blakegallagher]

One month of profit growing just to be wiped out in two days. This is the second time I thought SCTY would consolidate above $60. Last time was when it was ~$63 back in May. We're down 8% twice in a row with no news directly related to SCTY. Even with most of the solar sector down, SCTY shouldn't be down -16% in two days as the company fundamentally hasn't changed.

It went down an identical 8% yesterday along with TSLA. Coincidence??

If i just went all in every time it hit 60 and sold every time it hit 50 I would be doing much better than I am, I still believe in 8 months all these waaaay out of the money leaps will be worth something but right now it does look bleak when looking at the stock chart.

The next two quarters will be too big to ignore and volume manufacturing out of the Buffalo plant much earlier than expected should do wanders for the stock as well.

 

[hirox]

My fingers are itching, might buy. After all a 50% loss in a month is an overreaction.

 

[Foghat]

My fingers are itching, might buy. After all a 50% loss in a month is an overreaction.

If you're looking for good entry point, next week might be it. Nevada is looking to literally shut down all installs next week with a decision to keep the cap as is without changing it -- against all DG solar appeals to extend it. The original cap will be hit this month, so all sales will come to a grinding halt until new cap is decided and implemented. Buffet has planned this so that it will literally force the commission to take their added fee and net metering cut to keep DG install business in business. This is the final nail in the coffin which would force mass exodus of the install business. There are way too many opportunities elsewhere for those employees so I don't think they are going to wait around. Make no mistake, lawsuits will fly. But still going to hit he market hard if it happens. If they do up the cap so the DG business can keep going until they figure things out in December/January, then stock will have a small spike up.

I think the decision will come down this Wednesday.

 

[blakegallagher]

If you're looking for good entry point, next week might be it. Nevada is looking to literally shut down all installs next week with a decision to keep the cap as is without changing it -- against all DG solar appeals to extend it. The original cap will be hit this month, so all sales will come to a grinding halt until new cap is decided and implemented. Buffet has planned this so that it will literally force the commission to take their added fee and net metering cut to keep DG install business in business. This is the final nail in the coffin which would force mass exodus of the install business. There are way too many opportunities elsewhere for those employees so I don't think they are going to wait around. Make no mistake, lawsuits will fly. But still going to hit he market hard if it happens. If they do up the cap so the DG business can keep going until they figure things out in December/January, then stock will have a small spike up.

I think the decision will come down this Wednesday.

Interesting, I doubt you will see a time to buy too much lower than where it is. I guess it could fall to 48 but It has held for quite awhile above that level and the fundamentals are so strong right now I think were near the low. Arizona is a large market though, Not sure how that would effect the stock if installs there come to a halt.

Thanks for keeping us up to date Foghat.

 

[Foghat]

http://in.reuters.com/article/2015/01/25/bangladesh-solar-idINKBN0KY0O220150125

3.5 million homes in Bangladesh running on DG solar in 2014. Expect 6 million DG homes by 2017. This small nation (in size not people)has the most solar homes in the world. They have already cut $180mln per year in national kerosine cost(primary fuel to run the home).

bangladesh is the post card from the future. Solarcity has taken notice ref the same kerosine market in their Tanzanian company market (and Kenya as well). They are also exploring Bitcoin-like payment systems (mpesa) to do pay as you use model. 98% of the Kenyan population now have cell phones(that need to be charge); as well as primarily use digital currency(mpesa & Bitcoin) as means of money payment within their countries. Cell phones are a key surprise in this throughout the entire developing world. If you can now picture all those cell phones needing to be charged with a high percentage of those homes not having electricity, you can see the scope of this. India has nearly 1 billion cell phones in operation but 300 million people without electricity at their homes... With solar being cheaper per month then the cost of kerosine and charging your phone with a third party, it becomes even more interesting.

As JB Straubel once said, we have to start thinking much bigger here...

 

[jhm]

http://in.reuters.com/article/2015/01/25/bangladesh-solar-idINKBN0KY0O220150125

3.5 million homes in Bangladesh running on DG solar in 2014. Expect 6 million DG homes by 2017. This small nation (in size not people)has the most solar homes in the world. They have already cut $180mln per year in national kerosine cost(primary fuel to run the home).

bangladesh is the post card from the future. Solarcity has taken notice ref the same kerosine market in their Tanzanian company market (and Kenya as well). They are also exploring Bitcoin-like payment systems (mpesa) to do pay as you use model. 98% of the Kenyan population now have cell phones(that need to be charge); as well as primarily use digital currency(mpesa & Bitcoin) as means of money payment within their countries. Cell phones are a key surprise in this throughout the entire developing world. If you can now picture all those cell phones needing to be charged with a high percentage of those homes not having electricity, you can see the scope of this. India has nearly 1 billion cell phones in operation but 300 million people without electricity at their homes... With solar being cheaper per month then the cost of kerosine and charging your phone with a third party, it becomes even more interesting.

As JB Straubel once said, we have to start thinking much bigger here...

I love seeing this kind of development. Imagine the return on investment in replacing kerosene lighting with efficient LED lights, solar panels and batteries. I would expect at least a 20% return. This adds wealth, not just energy. 3.5 M families saving $180 M in kerosene each year already frees up over $50 per year per family. This will free up discretionary income which will further energize these local economies.

I would love to see Tesla Energy design a product specifically for this sort of market. I would call it the Powerpod. Here's how it works homes would buy a Powerpod base with an inverter in it and stack 1 to 10 battery modules on it. Each module would be portable, weigh about 5 pounds, hold 600 Wh of energy, and be capable of 1.2 kW output. Families would be able to buy or rent models as their needs change. Portability adds value because it facilitates power sharing. Invidivuals can take their modules to a neighbor's home or local business for recharging. A local business could install lots of solar for charging rental modules. The price of single discharge rental could cover the cost of energy and the module. An enterprising business could even offer a delivery service for fully charged modules. As an economy develops around Powerpods, families and businesses can progressively add solar panels and connect into microgrids. Additionally Powerpod modules can be designed for use in vehicles, power tools and other devices. At first the portability of Powerpods is important, but as more solar and microgrid resources come into an area, they become more stationary in their use. As users max out their 10 module stack (6 kWh), they can upgrade to Powerwalls. With a healthy market for secondhand Powerpods, there should be no problem selling pods off when upgrading. So as a transitional product, Powerpods should be well used over its lifecycle.

 

[jhm]

So how big could this Powerpod market be. We begin with 3.5 M homes with solar, and suppose each needs a base and 2 module. Another 1.5M homes lack solar, but also want a base plus about 2 modules to rent or own. Suppose we price bases at $100 and modules at $150 for 600 Wh. Thus, 5 million bases and 10 million modules are about $2B in sales and 6 GWh in storage. I reckon that this is nontrivial, and the Powerpod systems would be attractive in many more markets than just Bangladesh. Perhaps the global market is 10 times this size, $20B and 60 GWh. Now we're at Gigafactory scale.

 

[Foghat]

I love seeing this kind of development. Imagine the return on investment in replacing kerosene lighting with efficient LED lights, solar panels and batteries. I would expect at least a 20% return. This adds wealth, not just energy. 3.5 M families saving $180 M in kerosene each year already frees up over $50 per year per family. This will free up discretionary income which will further energize these local economies.

I would love to see Tesla Energy design a product specifically for this sort of market. I would call it the Powerpod. Here's how it works homes would buy a Powerpod base with an inverter in it and stack 1 to 10 battery modules on it. Each module would be portable, weigh about 5 pounds, hold 600 Wh of energy, and be capable of 1.2 kW output. Families would be able to buy or rent models as their needs change. Portability adds value because it facilitates power sharing. Invidivuals can take their modules to a neighbor's home or local business for recharging. A local business could install lots of solar for charging rental modules. The price of single discharge rental could cover the cost of energy and the module. An enterprising business could even offer a delivery service for fully charged modules. As an economy develops around Powerpods, families and businesses can progressively add solar panels and connect into microgrids. Additionally Powerpod modules can be designed for use in vehicles, power tools and other devices. At first the portability of Powerpods is important, but as more solar and microgrid resources come into an area, they become more stationary in their use. As users max out their 10 module stack (6 kWh), they can upgrade to Powerwalls. With a healthy market for secondhand Powerpods, there should be no problem selling pods off when upgrading. So as a transitional product, Powerpods should be well used over its lifecycle.

interesting concept... I think the solar home systems in Bangladesh include a battery already. Wonder if tesla powerpod could be cost competitive with such a small system requirement?

solarcity already is invested in a company that does pay-as-you-go solar. They install he solar and battery. The customer prepays for the amount of energy they want to buywith a digital currency transfer. Then turns the system on with a text message code they put into the home system. The interesting part is Solarcity could get paid instantaneously around the world without currency exchanges not going through any banking system. this is why I say this could be very significant when we're talking about 100's of millions of these small transactions are happening and coming into Solarcity daily via Bitcoin tokens. Read Tanzanians could be paying over $25/month for solar package, so expand that to 300 million in the same boat right now globally and we're looking at potential $7billion/month just in cell phone users that have no electricity at home that could benefit from these small units right now. And with the rise of digital currencies in these countries, those payments go directly into Solarcity's bank account from a cell phone in potentially re middle of nowhere near a bank. (Many pay rolls are done in digital currency now in Kenya; people feel it's safer then carrying around cash on pay day and/or having to walk many miles to cash a check. Just look at their phone from safety of home and see tokens deposited in digital wallet.)

also, I been thinking about Tesla's "100,000 reservations" for tesla energy. I'm going out on a limb that there aren't that many utilizes worldwide, so a vast majority of those reservations are for powerwall. I know that more capacity is being bought by utitlies, but the volume of customers is from powerwall. Like 98k or more in my opinion. From comments here on tesla motors and from scanning social media, most if not all reservations passed/passing through Solarcity sales teams first. As such, I feel Solarcity is going to have a massive solar+storage roll out. First ramp with be in q4, but 2016 is going to really do damage to the market. Like I've said before, these numbers will create an aggregation capable Solarcity in a matter of months from now. That when it gets really interesting with whole sale energy sales under purpa which buffet has already tried to change in anticipation of this happening. With buffet spending $32billion on a company that makes utitlity scale power generators(among other things) I can see his concern if aggregation of DG could cut the use of utility scale peakers that use these utility scale gas turbine generators. It sure would not be good for his recent billions invested in NV Energy which coincidentally is pushing through the most anti- DG policies in American history(yes, worse then Arizona) as I write this.

 

[jhm]

interesting concept... I think the solar home systems in Bangladesh include a battery already. Wonder if tesla powerpod could be cost competitive with such a small system requirement?

solarcity already is invested in a company that does pay-as-you-go solar. They install he solar and battery. The customer prepays for the amount of energy they want to buywith a digital currency transfer. Then turns the system on with a text message code they put into the home system. The interesting part is Solarcity could get paid instantaneously around the world without currency exchanges not going through any banking system. this is why I say this could be very significant when we're talking about 100's of millions of these small transactions are happening and coming into Solarcity daily via Bitcoin tokens. Read Tanzanians could be paying over $25/month for solar package, so expand that to 300 million in the same boat right now globally and we're looking at potential $7billion/month just in cell phone users that have no electricity at home that could benefit from these small units right now. And with the rise of digital currencies in these countries, those payments go directly into Solarcity's bank account from a cell phone in potentially re middle of nowhere near a bank. (Many pay rolls are done in digital currency now in Kenya; people feel it's safer then carrying around cash on pay day and/or having to walk many miles to cash a check. Just look at their phone from safety of home and see tokens deposited in digital wallet.)

also, I been thinking about Tesla's "100,000 reservations" for tesla energy. I'm going out on a limb that there aren't that many utilizes worldwide, so a vast majority of those reservations are for powerwall. I know that more capacity is being bought by utitlies, but the volume of customers is from powerwall. Like 98k or more in my opinion. From comments here on tesla motors and from scanning social media, most if not all reservations passed/passing through Solarcity sales teams first. As such, I feel Solarcity is going to have a massive solar+storage roll out. First ramp with be in q4, but 2016 is going to really do damage to the market. Like I've said before, these numbers will create an aggregation capable Solarcity in a matter of months from now. That when it gets really interesting with whole sale energy sales under purpa which buffet has already tried to change in anticipation of this happening. With buffet spending $32billion on a company that makes utitlity scale power generators(among other things) I can see his concern if aggregation of DG could cut the use of utility scale peakers that use these utility scale gas turbine generators. It sure would not be good for his recent billions invested in NV Energy which coincidentally is pushing through the most anti- DG policies in American history(yes, worse then Arizona) as I write this.

What is the name of this company SolarCity is invested in?

Regarding batteries and NV, I think that accumulating customers with batteries gives SolarCity a big chip. They can show that halting net metering won't stop the advance of solar. Moreover, if batteries are aggregated, it can be used to hurt the utility. If the rate plan is flat and not accepting net metering, then charge batteries when the spot market is at its highest to the day. This forces the utility to sell retail power at a loss. This is essentially a form of economic protest only to be used if the utility is unwilling to cut a reasonable deal. Aggregated batteries can be used in a way that creates value for which the the utility ought to rightly compensate or to destroy value. Utilities have been using their scale and status to bully DG. So it is only fitting for DG to return the favor.

 

[dalalsid]

What is the name of this company SolarCity is invested in?

Off-Grid Electric : https://www.greentechmedia.com/articles/read/solarcity-leads-7m-round-in-off-grid-solar-firm