For solar panels there is not much non-chinese choice, especially for the residential customer. When I bought my system a month ago (lease/ppa not a choice here in Virginia, PPA is not even legal), I got several quotes from installers and the choices for non-chinese panels were SolarWorld (USA made panels but this company could go out of business any day), LG (crazy expensive - $1/W more), Panasonic/Sharp (also crazy expensive - $1/W more). So Chinese is the only viable choice and as far as I can tell their panels are equal in quality to anyone else. Sunpower only sells through sunpower dealers and there isn't one locally and they are expensive. I ended up getting JA Solar panels. I paid $2.50/W before rebate. 10 year payoff.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
- Status
For solar panels there is not much non-chinese choice, especially for the residential customer. When I bought my system a month ago (lease/ppa not a choice here in Virginia, PPA is not even legal), I got several quotes from installers and the choices for non-chinese panels were SolarWorld (USA made panels but this company could go out of business any day), LG (crazy expensive - $1/W more), Panasonic/Sharp (also crazy expensive - $1/W more). So Chinese is the only viable choice and as far as I can tell their panels are equal in quality to anyone else. Sunpower only sells through sunpower dealers and there isn't one locally and they are expensive. I ended up getting JA Solar panels. I paid $2.50/W before rebate. 10 year payoff.
NigelM, that's a damn good deal on your system, congrats on the lottery win... Please keep us updated on the inverters or any warranty call results... The solar summit had a heated debate about inverter reliability and if someone were to be a test of reliability, your system would probably be as good a candidate as any...
- - - Updated - - -
10 year payback period... Would you have entertained a lease/ppa financing option from Solarcity if it were available (or legal) in Virginia?
I would have entertained it and it would have depended on how much exactly they are cheaper than what I pay - ~11c/kWh. I plan on staying here for a while but I'm wary of solar leases because
they are extremely long term and the value of the lease upon resale is iffy. I'm not sure I'd add any value when buying a house with a leased system unless I have the power to renegotiate/buyout the lease. Free power from an owned system, that is something I'd give value to.
But leasing does have the convenience factor. 5 years from now something might break in the system and I'd have to pay labor to fix it even though the components are under warranty. And that would lengthen the payoff period.
P.S. If you feel net metering might go away, leasing is the way to go.
I am in NJ not in TX. The other person in this thread from TX got $0.03/KWH.
Me and other 12 families that I have referred and got installed will say otherwise.
The only states where It is advantageous to buy system vs Prepay Leasing is NJ (Where I live), MD and PA - because of SREC. I don't think any other states have similar incentives where we get paid for producing electricity by Solar panels (Correct me if I am wrong). However, many people don't stay in the same house (ex. job changes) for no. of years (More than 5 years) for it to pay itself off and start enjoying the benefits..
From my understanding, home value is not based on PV system ownership, but rather on the home's ability to reduce operational costs compared to other homes in the area. If you sell your home, your production capability is what buyers will find valuable. If on year 18 you sell, Solarcity lease/ppa will produce exactly the same contracted production guarantee as it did on day one. Ownership might not provide that same production level so it might actually provide less value. Also, I've read that property tax burden ultimately stays the same for ownership as it does for lease. Solarcity itself has said that the problem is not new owners rejecting taking on their PV lease/ppa, but rather the home being vacant between ownership, so current buyers are seeing value in the lease/ppa apparently.
Net metering will change. How much is anyone's guess, but future consumers will face a different really soon. This will affect the entire solar industry. The only hedge against drastic downshifts in net metering is stationary storage. The only company positioned to continue compounding mass market growth in this emerging environment is Solarcity(and Tesla)... If someone can provide another company equally ready, please post here... Remember, Solarcity only makes money on daytime use, with storage, they will monetize the entire day of energy use cycle... An entirely new economic model from what we see today.
Last edited:
Yes, it was someone else who allegedly got the $0.03/KWh for prepaid lease or $0.08 for 20-year lease payments.
I still don't believe those numbers, because like I said the math for a 20-year pre-paid lease at $0.03/KWh adds up to $0.76/W installed. There is no way that SCTY can offer these rates for an extended period without going bankrupt. Maybe that one person did got a very special deal, but it is in no way representative of what SCTY is offering to other people. Case in point: the quote I posted from a solar panel forum for the exact same geographic area at $0.097/KWh for a prepaid lease (which is more than triple the $0.03/KWh fantasy number that you guys are trying to sell).
The difference in this thread is that I am quoting real numbers, and others are using "fantasy" numbers. And then people like you have the audicity to call me out for "playing games", while quoting someone else's fantasy numbers.
I am going to quote NigelM here; "Good luck!"
So you are saying that other person and me are lying and Only you are saying truth.. Got it.. That makes sense.
BTW, I helped get same/similar deals for 12 other families, Look at the picture of my community (Not all of them got $0.03/KWH bTW, Some got $0.045/KWH), I posted in previous page.
So the lease is then a lot less valuable than ownership because it would reduce your operational costs a lot less than an owned system. For example if a system offsets usage by 70%, then the owned system would offset 70% of energy costs. Same system leased lets say you pay 30% less than the utility for that power. In that case, your monthly operating costs would be 0.3+0.7*0.7 = 0.8 = 20% reduction in energy costs. How much would I pay for 20% reduction in energy costs? Would it really affect the price of a house I was going to buy or would I balk at taking over a long term lease?
You own an identical system, I'm not sure why you think that.
This is why I bought a few shares of SolarCity - first dibs at Tesla's energy storage batteries. California storage mandates will soon get rid of the bottlenecks that SolarCity is facing in getting approval for their battery systems. And if utilities keep complaining and dilly-dallying or lobbying against net metering, they are obsoleting themselves faster. By my back of the napkin calculations at current prices for solar and some estimated pricing for Tesla batteries, 33c/kWh is a sweet spot for going off grid. SCTY can then be a real utility. Longer term, if they get neighborhoods to sign on, they could just have everybody's systems linked together for production/storage, use common areas for more production/storage.
Taking on a long term lease is less scary as it appears actually. Without a solar system, you are effectively in a PPA with your utility for perpetuity!
It's actually worse than a PPA as you don't get to lock-in any kind of prices.
Chickenlittle
Banned
I do live in Virginia but no matter where I lived would not lease or borrow except in crisis. You are working for someone else. I see many people working income going for interest payments. I realize many are not in a position to do this but by delaying some purchases will accumulate worth a lot faster. I paid off my mortgages and have never bought the largest home I could which has resulted in my being able to afford more ultimately. Sorry to preach. Buying solar system was the best option for me
I said most women and you replied by stating you take more risks than 90% of the people reading this so you're clearly not covered by the statement I made about most women not wanting to take risks on solar panels. You're also reading posts about solar panels so it's clear there's a high chance you already have them. I was mainly asking if you believed most women would prefer to lease vs. buy the panels for the reasons I've already mentioned.
bonnie
I play a nice person on twitter.
You asked for an opinion from a woman reading this. So I'm a little confused as to why you're now saying that because I'm reading posts in this forum, I'm clearly not in the group you were referring to. (Note that my reply about risk-taking was in direct response to your assertion that women are not risk-takers.)
I have no idea why you've broken this out into a gender issue. When I think about all the people I know with solar panels, purchased/leased, I don't see a clear gender-bias. Why is that so important in your mind?
I am a SCTY ultra-bull. But I have to admit that sleepyhead has a point here which needs careful assessment.
The core point he is making is, leases provide very high margins for scty. We can't disagree with that. In addition his point is that margins will come down as:
a) more people will progressively choose to buy outright - and/or -
b) competition will catchup and offer same product for cheaper
Point-a is highly debatable as we see over many pages in this thread. I personally find it hard to speculate a trend for such a large market. My take at this point is 'lets see when it happens'. So far there is no evidence of such consumer shift it seems. But we do have to admit if this comes into full play there will be significant repricing of scty. It's a genuine risk and it's in our best interests to keep an eye out for such a trend.
Point-b I'm not worried about so much. Even if SCTY lowers it's prices, it could still be making comparable profits as it's costs come down too (due to scale). SCTY is amassing a significant scale which competition won't be able to compete with. There is already evidence that SCTY is putting competition ever behind each passing quarter.
PS: Someone mentioned 60% of scty business is leases/ppas. I don't think that's entirely accurate, I believe they said it's 90%+ in the latest presentations. You may get 60% if you look at Income Statement, but there the lease/ppa's are prorated over 120 quarters and its accumulative from quarter to quarter, so it's not apples-to-apples comparison.
The core point he is making is, leases provide very high margins for scty. We can't disagree with that. In addition his point is that margins will come down as:
a) more people will progressively choose to buy outright - and/or -
b) competition will catchup and offer same product for cheaper
Point-a is highly debatable as we see over many pages in this thread. I personally find it hard to speculate a trend for such a large market. My take at this point is 'lets see when it happens'. So far there is no evidence of such consumer shift it seems. But we do have to admit if this comes into full play there will be significant repricing of scty. It's a genuine risk and it's in our best interests to keep an eye out for such a trend.
Point-b I'm not worried about so much. Even if SCTY lowers it's prices, it could still be making comparable profits as it's costs come down too (due to scale). SCTY is amassing a significant scale which competition won't be able to compete with. There is already evidence that SCTY is putting competition ever behind each passing quarter.
PS: Someone mentioned 60% of scty business is leases/ppas. I don't think that's entirely accurate, I believe they said it's 90%+ in the latest presentations. You may get 60% if you look at Income Statement, but there the lease/ppa's are prorated over 120 quarters and its accumulative from quarter to quarter, so it's not apples-to-apples comparison.
It is an important riskt to keep an eye out for irregardless of whether they do leasing or selling systems.
Solar panel manufacturers were selling panels for $1.70/W just 3 years ago at 30% gross margins, which means they got $0.50/W of gross profit for every watt they sold.
Fast forward 3 years and solar panels are selling for $0.65/W at 20% gross margins. So they are now getting $0.13/W gross profit just 3 years later, since panel costs have come down 60% - 70%.
Residential solar was installed at $5/W a year ago.
Residential solar will be installed at $2/W 3 years from now.
I am afraid that SCTY and other solar installers will see similar struggles that the solar panel manufacturing business suffered over the last 3 years.
But this is just my completely independent and unbiased personal opinion on the subject that has not been influenced by anyone. I have never heard anyone else come to a similar conclusion before, so I may turn out very wrong on this "risk".
But I have a feeling that I will be correct, so that is why I don't invest in SCTY. I still think that the company will definitely prosper and grow installations, but I just don't see a potential for great returns under this business model as some others do.
I am very bullish on SCTY's business model and its ability to scale and grow installations calculated in MW's. But I am also very skeptical that they will be able to grow revenues and profits fast enough to yield a great return on investment to shareholders from these elevated valuations.
SCTY is in a business where its product will sell for 60% cheaper just ~5 years from now, while TSLA has a product that will sell for ~10% more 5 years from now. It will be a lot easier for TSLA to grow into its valuation than SCTY. TSLA to me is a buy, while SCTY is a hold. I am actually long SCTY via a deep ITM bull call spread, and have no short positions at all.
Would the same risk assessment then apply to cell and panel makers, or are you thinking they have already suffered the brunt of that challenge moving forward?
They already suffered the brunt of that challenge due to the oversupply situation that existed: it forced panel manufacturers to cut costs a lot quicker than anyone expected. Solar panels are down 99% over the past 30 years, and they are at a point where they can't get much cheaper, since all of the low hanging fruit has already been picked.
That said, panels will get cheaper since companies are still cutting costs; but the rate is more like $0.04/W per year rather than $0.40/W per year like it was two years ago.
Solar panels can come down in price about 10% per year or less going forward. Companies are making them at ~$0.50 - $0.55/W and selling at ~$0.60 - $0.65/W. Next year they might make them at $0.45 - $0.50, but even as costs come down 5% - 10% per year, eventually they will hit a bottom as will residential installation costs.
The reason why I am excited about panel manufacturers in the short run, is because demand is going to outstrip supply this year and could lead to higher ASP's. Here is GTM saying that panel prices in US will exceed $0.80/W this year, when they were selling under $0.70 recently:
http://www.greentechmedia.com/articles/read/chinese-module-price-to-increase-20-percent-in-2014
So even if ASP's stabilize and do not grow, then solar panel makers will see margins go up a lot as they continue to cut costs. I can see long term gross margins around 20% - 30%, since anything under 20% and you are losing money but anything over 30% and you are inviting competition. In the future though ASP's will be coming down as well, but roughly 5%-10% per year and not 20% - 30% like in the past or what I expect in the future for residential system installation costs.
There will be a few big winners in solar manufacturing and it will become an oligopoly IMO as barriers to entry become a lot bigger in the future (mostly due to poly shortages and economies of scale).
So the same applies to panel manufacturers in that as ASP's go down, they have to grow in size just to keep revenues flat. But a 5% annual decline in ASP's is manageable, while a 20% - 30% decline can be catastrophic (as it was in the 2011-2012 period).
Question Sleepyhead - if you buy your system, then do you have to install a slightly bigger system than what you need right now for the future to still be able to offset the electricity bill? Because solarcity locks in a price for the term of the contract, but if you buy then you have to deal with rising cost from the utility company every year, correct?
Also, since we both live in Texas, have you heard of this company? - Electrical Repairs, Roofing, heating, air conditioning - All Pro - Keller, Tx
My neighbor went with them and got a 7kwh system for $12.5 with a $7,400 tax deductible. I'm thinking about using them, good deal?
Also, since we both live in Texas, have you heard of this company? - Electrical Repairs, Roofing, heating, air conditioning - All Pro - Keller, Tx
My neighbor went with them and got a 7kwh system for $12.5 with a $7,400 tax deductible. I'm thinking about using them, good deal?
right thanks for that. cell-panel suppliers can more effectively grow in both volume and return commensurate with the coming market demand- where the lease margin has not yet been squeezed down to a market level for the future demand (against it's competition of loan-buy). That's a reasonable argument imo and one that could and likely will play out. As a buffer compared to panel mfg, the elasticity of SCTY model in the lease v. buy scenario is much greater because the cost curve squeeze remaining in the 'system' cost is no longer in the panel (as you point out), but in 1) cost of scale to the customer 2) cost of value proposition sale to the customer. These are the focus of SCTY even if lease migrates to buy-lease hybrid (ala Tesla offering both). If DG does succeed (as many of us believe), the flexibility and scale of SCTY's model may well prove to be the oligopoly of DG, as they have already positioned themselves correctly forecasting that panels will be commodities, of which they will have the largest single sourcing ability (US). Bottom line for me currently is, I agree with your risk assessment and will monitor it closely. I also believe there is a risk of under investment in the eventual DG market if not positioned in SCTY (especially perhaps with the recent pull back in valuation going forward). thanks as always sleepy
Your numbers make sense in theory but the actual numbers are showing the exact opposite trend.
I'm pulling these numbers from respective quarterly slideshows.
Total Retained Value $/watt
Q1 2013: $1.25/watt
Q2 2013: $1.27/watt
Q3 2013: $1.37/watt
Q4 2013: $1.51/watt
Note these numbers are cumulative at each period, including all contracts done throughout company's history. So in reality the Retained Value/watt is actually growing substantially faster for the contracts done in the specific quarters than these numbers imply.
In fact I remember seeing $2/w retained value for contracts done in Q4 specifically. But I can't locate that now, don't remember where I saw it.
- - - Updated - - -
Complement that with Market Share growth info:
Q1 2012: 12%
Q2 2012: 16%
Q3 2012: 19%
Q4 2012: 20%
Q1 2013: 20%
Q2 2013: 26%
Q3 2013: 32%
So while scty is grabbing ever more more money on a per watt basis, it is increasing it's market share!!
I agree that the solar panel sector will consolidate and will be left with probably a few to several big players, but I question who will be the big winners. The reason being is margins will be quite low. On the other hand, solar as an overall industry will continue to grow, so these low-margin panel manufacturers can match growth of the solar industry but not with high margins. I see panel manufacturers as more like component suppliers (ie., think of component suppliers to smartphones). These players will reap some profit and grow, but they won't be the "big winners" like Apple, Samsung, etc since Apple/Samsung take the retail segment where the real high margins are. Same thing applies to solar... big margins won't be had in the component supply sector (ie., panels, etc) but will be had in the retail sector (the companies that pull everything together and provide a simple/easy experience).
For solar panel manufacturers, I think their main hope for decently high margin is to go into building utility-scale plants. This is what they're starting to do and it's smart. They won't be making high margin off of panels and they know it. If you listen to the conference calls for these companies, not many are super excited about expanding panel capacity. Rather, they're more excited about expanding into higher margin businesses like utility-scale plants. The reason why utility-scale plants give high margin is because it's not just supplying components but it's building/servicing as well. Meaning, they're adding a service component to their business and that's where the margins expand.
So, companies that only produce panels - as an investment long-term, I think they're so, so. Sure the good ones will grow but it's not a sexy sector to be in. Low multiples with valuation.
But companies that produce panels and install utility plants - now this is an interesting place. Higher margin, and as an investor I can give higher multiples for valuation.
- Status
Similar threads
