SolarCity (SCTY)

[doggusfluffy]

But the cost savings to the grid are basically a mirage, (except for reduction of peak aircon load, which could've been supplied by utility solar anyway). Until a home actually disconnects from the grid, it is adding costs to the grid, one way or another, due to that cost burden, the payment for rooftop solar will be reduced to trend towards either wholesale price of solar or the TOU midday rate (these are effectively closely related, to a large extent (but not complete extent) they are same thing)). Think of solar as an alternate form of energy efficiency, not as a power source itself.

I think the goal is to pair 100% of the PV systems with batteries, let the utilities optimize the battery loads in this new era of cooperation...assuming they want to ultimately keep those customers connected to their grids. More home batteries to the party.

Nissan and Eaton develop home energy storage solution

Cyrille Brisson, Vice President Marketing, Eaton Electrical EMEA said: “The collaborative development between Eaton and Nissan enabled us to optimize development and production costs and deliver a well-integrated offer to consumers. Our system will be provided to end-users completely ready to use, with all required elements including cabling and installation by a certified professional, at a starting price of €4,000 (£3200) for 4.2KWh nominal. Our policy is to avoid hidden extra costs and achieve a lower total cost of ownership than other major offers already announced.

 

[Johan]

I'm looking for another large stock purchase by Elon here. Last time I bought he did so I'm fully expecting him to do the same now

 

[BornToFly]

On May 2nd and 3rd, when SCTY came back down from the mid 30 to 30, I sold Puts with 25 strike and 5/13 expiration. $25 was well below the 200 day, and if I remember right, the 50 day, and at or below the bottom BB. I thought I was safe. I'm glad to see some recovery this morning. I just hope we reclaim $25 soon so I can get out and just stick to TSLA....

 

[TheTalkingMule]

It's a bet on residential solar which is a business model with no guarantee of ever gaining significant traction.

You chastise people for not understanding the investment world, then turn around and deny the reality already playing out in front of us? Residential solar(distributed geneneration) is clearly the future to anyone with a decent understanding of energy markets and human nature. The future of energy is in the consumer's hands, not the utility. From here on out utilities will be.....a utility.

 

[doggusfluffy]

Senate votes down Iran amendment to energy spending bill

Before the vote, the bill’s sponsor, Sen. Lamar Alexander (R-Tenn.) said dispensing with the Iran amendment would allow the spending bill to move forward, and quickly.
“I believe we ought to be easily able to finish the bill today,” he said. “I think we should finish it today.”

 

[esk8mw]

I just got Jan18 20s at 5.25. Kind of feels like stealing.

Holy crap these are in the money already. That didn't take long. These could be quite valuable in a year or so.

 

[Skotty]

To me, rooftop solar isn't about supporting a distributed generation business model or trying to get ROI. It's just about the failure of federal policy, state policy, and the utilities to build and offer clean energy solutions. In the absence of those solutions, my only option is to go rooftop solar, which I wouldn't do if I could buy clean energy from the utility.

In the past, I have stated that I like the idea of installing load balancing batteries with rooftop solar as I can understand how the utility doesn't like the idea of having to balance solar with net metering. However, on the other hand, if you think of clean energy as a necessary part of our future, a rooftop solar install can be looked at almost as a subsidy to the utility as the installer is committing 10's of thousands of dollars to install solar capacity that the utility should have been installing for us in the first place. So maybe I shouldn't be so kind (to the utilities) as to expect consumers to pay for their own load balancing.

Anyway, it would be interesting to see a breakdown of reasons for why people install rooftop solar. Might give some insight for investors.

 

[Noble Ninja]

We're rebounding off the $16.50 low of the post-ER drop (-25%) yesterday after stabilizing. The +13% today looks like a combination of long-term investors scooping up more shares at an attractive price and possible short covering. Shorts would be smart to lock in profits now (I'm looking at you, Chanos), as SCTY is oversold and should not have gone down this low. We were down ~30% the week prior to ER and any bad ER results should've been priced in already (instead of an additional -25% slide).

 

[Perfectlogic]

You chastise people for not understanding the investment world, then turn around and deny the reality already playing out in front of us? Residential solar(distributed geneneration) is clearly the future to anyone with a decent understanding of energy markets and human nature. The future of energy is in the consumer's hands, not the utility. From here on out utilities will be.....a utility.

Residential solar is still a very small part of the energy mix, and it is only viable if you can use the grid as a free battery there is no way around that. I believe I have written this before in this thread but I might as well write it again as it is pretty simple why residential solar just isn't viable today. The cost of electricity consists of 3 things, the generation of the power itself, balancing the supply and demand and the distribution. The 2 last parts actually make up more than 50% of the total cost and it all adds up to around 12c/kwh today for the utility.

For residential solar to be viable it has to compete against this cost, that is around 12c/kwh. That is simply not possible when generating the power alone from residential solar is the same cost (12c/kwh) as the total cost from utilites. It is true that if you went completely off grid the distributing part of the cost structure would go away, but even talking about this scenario makes no sense unless battery costs fall to something like 1/3rd of todays cost because it would add a huge amount of cost the balancing your production and consumption. Because if you wanted to go off grid you would need a large battery and probably a diesel backup generator for the winter months.

So residential solar under the current model has a cost structure of 12c/kwh for generation + around the same amount for distribution as you need to use the grid for it to work and an even higher cost in balancing the load as solar is more clumpy in output. That means that if everyone were to switch to residential solar tomorrow the cost would end up at least 8c/kwh higher (the added cost of generation), probably more than 10c/kwh higher. The gap to make residential solar viable in a level playing field environment is just massive.

 

[Johan]

I talked about Elon buying half jokingly half seriously. We'll see soon enough as he would have to file with the SEC.

 

[Skotty]

I suggested to my wife (as she handles the stock in the family) to buy when it had dropped to about $21. Not sure if she did or not. I don't see SolarCity going out of business. They could be a good long term investment, IMO. They've got the right pieces in play.

 

[esk8mw]

I talked about Elon buying half jokingly half seriously. We'll see soon enough as he would have to file with the SEC.

Just FYI, most companies impose a trading blackout lasting until 2-3 business days following ER. Then the company has 2 business days to file the Form 4 to cover the transaction, so we may not have an answer until Friday or next week.

 

[jhm]

I agree that distributed solar will play a huge role in the future, I come from a state where 25% of residences have rooftop solar. But the cost savings to the grid are basically a mirage, (except for reduction of peak aircon load, which could've been supplied by utility solar anyway). Until a home actually disconnects from the grid, it is adding costs to the grid, one way or another, due to that cost burden, the payment for rooftop solar will be reduced to trend towards either wholesale price of solar or the TOU midday rate (these are effectively closely related, to a large extent (but not complete extent) they are same thing)). Think of solar as an alternate form of energy efficiency, not as a power source itself.

I've bought 2 solar PV systems, one about 8 years ago, one recently. Pre subsidy, the first was around US $5 per watt?, the second was around US $1 per watt. After-subsidy it was much better than that. Solar is great, but to me Solarcity is quite reprehensible when they sell PPA to the asset rich, income poor (ie the elderly), if there is an escalation clause. Its also why I think of SCTY as having a terrible business plan, they have high FICO grade customers, but seriously sub prime backing assets. Overtime, USA retail customers will trend towards what business customers pay, fixed + variable + demand charge. with big blocks of midday solar causing the midday to the cheapest time of day. Its also demonstrates the most probity. (Ie business customers pay that way because it is the most cost defensible way to apportion the electricity bull)

Solar power is co-ordinated by an extraterrestrial energy source called the sun. In the USA $1 of utility solar buys about 3x as much solar energy as a $1 of SCTY solar. Its really quite a simple and somewhat binary proposition.

The legacy grid was not optimized to integrate intermittent renewables. There is plenty of friction as the system converges to something optimized for renewables. A lot of legacy cost is being shifted to ratepayers, but utilities like to blame the renewables.

In the long run, the grid will be managed around maintaining a suitable state of charge in batteries widely distributed across the grid. So transmission and centralized generation will mostly be about keeping the batteries charged at the lowest cost, rather than real-time supply-demand management as is currently the case. When the grid mostly exists to keep batteries charged at lowest cost capacity requirements are much lower. An analogy here is that of milkmen making daily deliveries of milk before the days of refrigeration. This was an expensive distribution system. Deliveries had to be made daily. But once electric refrigerators became common place, the milkman did not need to come as frequently. Eventually, the whole distribution system disappeared as families could get milk with their weekly groceries and keep it fresh all week. To be sure, electricity is at much higher frequency than milk delivery, but the same principle holds. Storage changes how inventory is managed. It's hard for people to imagine what this grid would look like because it does not yet exist. But try to imagine what the food supply was like before refrigeration. Try to imagine any commodity without the ability to store or stockpile it. Matching real-time production to real-time consumption is very costly. Matching real-time production to what is needed to restock inventory over the next 36 hours allows for huge logistical efficiency gains. Even just 1 hour of system wide storage would radically change the economics of production and delivery. It would pretty much eliminate the need for peaking plants for anything but occasional back-up, not regular daily use. It would substantially compress the spread between daily max and min spot prices.

 

[The Blue Owl]

-

The legacy grid was not optimized to integrate intermittent renewables. There is plenty of friction as the system converges to something optimized for renewables. A lot of legacy cost is being shifted to ratepayers, but utilities like to blame the renewables.

Case in point: Germany had so much renewable energy on Sunday that it had to pay people to use electricity.

According to this article, last year in Germany the average renewable mix was 33%.

 

[doggusfluffy]

San Francisco is requiring new homes have solar pre-installed...today. Wait until the costs are roughly the same as any modern appliance like furnace, water heater, air conditioning or having a refrigerator as jhm illustrated above.

Looks like the Energy bill is back on track...plus a picture of Kate.

ENERGY BILL CONFEREES MAYBE, POSSIBLY COMING NEXT WEEK:E&C Chairman Fred Upton told Dariushe thinks conferees on the House and Senate energy bills could be named as soon as next week. "A couple of the chairmen are going to sit down later this week and see where we are," he said as he gave a tour of the Capitol building to his niece,Kate Upton, and her boyfriend, Tigers' pitcher Justin Verlander. Here's a picture of the trio from the Detroit Free Press.

 

[electracity]

Residential solar is still a very small part of the energy mix, and it is only viable if you can use the grid as a free battery there is no way around that. I believe I have written this before in this thread but I might as well write it again as it is pretty simple why residential solar just isn't viable today. The cost of electricity consists of 3 things, the generation of the power itself, balancing the supply and demand and the distribution. The 2 last parts actually make up more than 50% of the total cost and it all adds up to around 12c/kwh today for the utility.

For residential solar to be viable it has to compete against this cost, that is around 12c/kwh. That is simply not possible when generating the power alone from residential solar is the same cost (12c/kwh) as the total cost from utilites. It is true that if you went completely off grid the distributing part of the cost structure would go away, but even talking about this scenario makes no sense unless battery costs fall to something like 1/3rd of todays cost because it would add a huge amount of cost the balancing your production and consumption. Because if you wanted to go off grid you would need a large battery and probably a diesel backup generator for the winter months.

So residential solar under the current model has a cost structure of 12c/kwh for generation + around the same amount for distribution as you need to use the grid for it to work and an even higher cost in balancing the load as solar is more clumpy in output. That means that if everyone were to switch to residential solar tomorrow the cost would end up at least 8c/kwh higher (the added cost of generation), probably more than 10c/kwh higher. The gap to make residential solar viable in a level playing field environment is just massive.

You make some good points, but I think it's an overly pessimistic analysis. First, I think the aspect of self generation and energy safety is perceived as a major benefit of home solar plus storage. Especially in the next decade I believe this will become a standard feature of new homes in many affluent countries. If climate change becomes noticeably more pronounced people with disposable incomes will increasingly choose safety.

Second, solar and wind are going to be the main path to decarbonize. Home solar plus some battery may just need to be close to the cost of utility solar/wind plus transmission. Denmark may be largely decarbonized with nuclear, but most of the world isn't going that route. The process of decarbonization in the U.S will probably continue to provide incentives for home solar, even if the approach isn't entirely rational.

 

[electracity]

San Francisco is requiring new homes have solar pre-installed...today. Wait until the costs are roughly the same as any modern appliance like furnace, water heater, air conditioning or having a refrigerator as jhm illustrated above.

Looks like the Energy bill is back on track...plus a picture of Kate.

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

 

[TheTalkingMule]

Residential solar is still a very small part of the energy mix, and it is only viable if you can use the grid as a free battery there is no way around that. I believe I have written this before in this thread but I might as well write it again as it is pretty simple why residential solar just isn't viable today. The cost of electricity consists of 3 things, the generation of the power itself, balancing the supply and demand and the distribution. The 2 last parts actually make up more than 50% of the total cost and it all adds up to around 12c/kwh today for the utility.

Yes, you've made this point a thousand times. My apologies if I offend, but that's quite a linear outlook on a system that is literally changing by the month. You talk as if the cost variables of today are set in stone yet the whole industry is in it's infancy for 90% of consumers. You talk about cost as if Germans haven't been installing residential solar at $2/W for three years now, we have a full dollar per Watt to shave yet and that just at the cost levels of maybe 2 years ago. At scale, we should be installing at $1.90/W right now with all parties making enough profit. That is certainly more likely to become reality than for the whole country to insist on keeping the entire energy supply on the other side of a meter just to save $.45/W.

Having purely utility-owned energy production is done. Once your energy source turns to something that can't be hoarded this becomes an inescapable reality.

A utility will be just that moving forward....a utility. It's already happened in Germany and multiple states in the US are following their lead. Now community solar at what we consider "utility scale" will certainly seen quite a bit, but it won't be run by a utility. Third party renewable energy companies like SolarCity will run the production operation and the utility can balance the load.

We're breaking up monopolies here and the savings will be massive.

 

[Perfectlogic]

You make some good points, but I think it's an overly pessimistic analysis. First, I think the aspect of self generation and energy safety is perceived as a major benefit of home solar plus storage. Especially in the next decade I believe this will become a standard feature of new homes in many affluent countries. If climate change becomes noticeably more pronounced people with disposable incomes will increasingly choose safety.

Second, solar and wind are going to be the main path to decarbonize. Home solar plus some battery may just need to be close to the cost of utility solar/wind plus transmission. Denmark may be largely decarbonized with nuclear, but most of the world isn't going that route. The process of decarbonization in the U.S will probably continue to provide incentives for home solar, even if the approach isn't entirely rational.

First of all Denmark doesn't get any power from nuclear, at all. We do get a lot of our power from wind, the highest percentage in the world I believe, and we have the largest wind turbine producer Vestas. You are implying that we need residential solar to move away from fossil fuels but that makes no sense. Utility scale solar is 1/3rd the cost of residential solar, the choice is obvious. While residential solar is more than 50% more expensive than status quo, utility scale solar has become as cheap as fossil fuels, and in some places even cheaper which is why most of new planned production capacity this year is solar. The solution to move away from fossil fuels and save money in the progress is here today and it is utility scale solar and wind.

 

[Perfectlogic]

Yes, you've made this point a thousand times. My apologies if I offend, but that's quite a linear outlook on a system that is literally changing by the month. You talk as if the cost variables of today are set in stone yet the whole industry is in it's infancy for 90% of consumers. You talk about cost as if Germans haven't been installing residential solar at $2/W for three years now, we have a full dollar per Watt to shave yet and that just at the cost levels of maybe 2 years ago. At scale, we should be installing at $1.90/W right now with all parties making enough profit. That is certainly more likely to become reality than for the whole country to insist on keeping the entire energy supply on the other side of a meter just to save $.45/W.

Having purely utility-owned energy production is done. Once your energy source turns to something that can't be hoarded this becomes an inescapable reality.

A utility will be just that moving forward....a utility. It's already happened in Germany and multiple states in the US are following their lead. Now community solar at what we consider "utility scale" will certainly seen quite a bit, but it won't be run by a utility. Third party renewable energy companies like SolarCity will run the production operation and the utility can balance the load.

We're breaking up monopolies here and the savings will be massive.

I apologize if I offend but you make zero sense. Even at $2/watt residential solar isn't viable as you would still need the grid so the only difference would be the generated electricity would be twice as expensive compared to utility scale solar. Residential solar would have to become cheaper than utility scale for it to make sense, or trashing the grid completely and let everyone handle their own system and this just isn't realistic even 10 years from now (to do cheaper than a grid solution).

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.