Hawaiian Electric Co. can't solve rooftop solar issue alone, SolarCity exec says - Pacific Business News more support for a q1 revenue beat is Hawaii connecting a substantial backlog of over 2500 customers over the fist three months of 2015. Systems were installed so as soon as they were connected, revenue started flowing in to Solarcity. maybe why we also saw Solarcity hit record 4GWh/day and 5GWh/day production within two weeks of each other.
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Perfectlogic
Member
First Solar: Likely The Best Bet In The Solar Industry - First Solar, Inc. (NASDAQ:FSLR) | Seeking Alpha
Interesting article that compares the cost of utility and residental solar about half way down the page, according to the study its $1.88/w and $3.60/w respectively, now the margin addon is significantly higher on the residental side, but even discounting the margin cost is still more than 35% higher for residental. I guess this is why I'm not as excited about residental as others, the growth might have been higher in residental compared to utility but you certainly pay a premium for this growth in the stock, and how sustainable is it when utility is cheaper?
Interesting article that compares the cost of utility and residental solar about half way down the page, according to the study its $1.88/w and $3.60/w respectively, now the margin addon is significantly higher on the residental side, but even discounting the margin cost is still more than 35% higher for residental. I guess this is why I'm not as excited about residental as others, the growth might have been higher in residental compared to utility but you certainly pay a premium for this growth in the stock, and how sustainable is it when utility is cheaper?
jhm
Well-Known Member
SolarCity has an installation cost of $2.09/W. SG&A is another $0.76/W, for a combined $2.86/W. Also note that residential solar need only compete with residential rates, while utility installations must compete with wholesale power rates. The ratepayer is still paying a profit margin to their utility for whatever power they buy. So it is not apples to compare retail and wholesale prices.
Perfectlogic
Member
There is margin both in residental and utility, unless you are producing your own panels and mounting them on your roof. The price of a residental and utility watt is an apples to apples comparison as I see it, unless people are able to disconnect from the grid entirely which would save money on infrastructure, but that wouldn't make much sense as it would take a lot of batteries.
jhm
Well-Known Member
SolarCity is able to sell power to their customers a few cents cheaper than utility rates, and that is good enough to make the sale. That is a retail to retail comparison. If SolarCity were to offer the same rates to a utility, they would not buy it. Utilities buy power to resale. They need wholesale rates, not retail rates. The question you should be asking is, if utilities can install solar more cheaply than SolarCity, why don't they offer retail rates lower than SolarCity? If you think that utilities have an absolute cost advantage over rooftop, then why are they losing market share to rooftop installers? I think it has something to do with not wanting to destroy the value on their balance sheets.
Those prices don't tell the whole story. Utility is cheaper when you consider cost per watt on a large scale but there are many advantages of rooftop.
No transmission losses - Land is rarely free and sometimes very expensive for a utility solar farm and sometimes they must be placed pretty far from where the power is used. This requires expensive Transmission lines and losses. So you already lose some of that advantage.
Strengthens grid- Having distributed solar helps lower peak demand all over, When combined with small batteries it will alter peak demand dramatically as solar reaches higher penetrations.
Individuals can invest- One thing rarely mentioned is there are a whole lot of homeowners who want solar and they don't have the option of building utility scale solar so they go residential
The main reason I am excited about residential over Utility is it so much easier to execute. Each Utility Project is unique and requires extensive engineering work and paperwork. Their is a high likelihood that there will be delays with utility projects because there are so many actors at play.
Solar City Management has found a way to double every year and it looks like they will continue to do that which is going to result in some staggering wealth generation
You also have to consider the ITC step down. It sure looks like the US utility solar market will be hit hard if it drops down to 10 percent for them like scheduled. I guess you could argue this one both ways but I think SCTY and other US rooftop installers will fare better than US utility players.
jhm
Well-Known Member
We should probably talk more about ITC step down. I don't have a feel for how it might impact utility or rooftop differently. I suppose for utilities after the step down, it will just be harder to pencil out solar projects relative to other projects a utility might consider. For rooftop customers there are fewer choices: utility or solar with or without batteries.
Another issue that should be consider explicitly is the problem that utilities have with integrating too much solar into their mix. I alluded to this in my comment about balance sheets, but it does need to be said. As more solar is added, whether utility or rooftop, it decrease midday demand net of solar. Traditionally these are peak hours and most generation assets are most profitable during these peak ours. As the demand net of solar declines, these assets can become unprofitable to operate. So too much solar has the risk of impairing many assets on a utility's balance sheet. The utilization assumptions that justified their investment many years ago just do not hold up. So the utility industry is at risk of a serious asset bubble. Adding yet more utility solar could do more financial harm than good. But it gets worse as even more solar is added. Taken too far an power generation can exceed demand and the spot market puts a negative price on power, that is, wind and solar operators may be paid or forced to curtail production. This is where grid storage and perhaps aggregated customer side storage can be enormously helpful. With sufficient storage capacity the spot price would never go negative. Storage assets would soak up power selling a just a fraction of a penny per kWh. Later when the sun goes down storage assets would then sell the power back. In this way, the energy mix could integrate 100% renewable sources. Additionally, the daily spread from the lowest spot price to highest would be no greater than the levelized cost of storage, maybe 5c/kWh some day. So in the long run as solar goes to 5c/kWh and storage to 5c/kWh, the price of power could be bounded between 0 and 10 cents, and these prices would be obtainable from a utility or on your rooftop. The pace at which we converge to such a state determines whether the utilities can get a full return on their prior investments. So it is basically within the utilities' interest to transition slowly. And this is what give the likes of SolarCity a huge advantage.
Another issue that should be consider explicitly is the problem that utilities have with integrating too much solar into their mix. I alluded to this in my comment about balance sheets, but it does need to be said. As more solar is added, whether utility or rooftop, it decrease midday demand net of solar. Traditionally these are peak hours and most generation assets are most profitable during these peak ours. As the demand net of solar declines, these assets can become unprofitable to operate. So too much solar has the risk of impairing many assets on a utility's balance sheet. The utilization assumptions that justified their investment many years ago just do not hold up. So the utility industry is at risk of a serious asset bubble. Adding yet more utility solar could do more financial harm than good. But it gets worse as even more solar is added. Taken too far an power generation can exceed demand and the spot market puts a negative price on power, that is, wind and solar operators may be paid or forced to curtail production. This is where grid storage and perhaps aggregated customer side storage can be enormously helpful. With sufficient storage capacity the spot price would never go negative. Storage assets would soak up power selling a just a fraction of a penny per kWh. Later when the sun goes down storage assets would then sell the power back. In this way, the energy mix could integrate 100% renewable sources. Additionally, the daily spread from the lowest spot price to highest would be no greater than the levelized cost of storage, maybe 5c/kWh some day. So in the long run as solar goes to 5c/kWh and storage to 5c/kWh, the price of power could be bounded between 0 and 10 cents, and these prices would be obtainable from a utility or on your rooftop. The pace at which we converge to such a state determines whether the utilities can get a full return on their prior investments. So it is basically within the utilities' interest to transition slowly. And this is what give the likes of SolarCity a huge advantage.
Perfectlogic
Member
I must admit I don't know much about this whole thing, but does the utility pay for the infrastructure, or some of it? That would make for an uneven playing field. Every source I have found says utility scale solar is much cheaper than residental.
"Strengthens grid- Having distributed solar helps lower peak demand all over, When combined with small batteries it will alter peak demand dramatically as solar reaches higher penetrations."
This peak demand argument works for both resi and utility.
"No transmission losses - Land is rarely free and sometimes very expensive for a utility solar farm and sometimes they must be placed pretty far from where the power is used. This requires expensive Transmission lines and losses. So you already lose some of that advantage."
This might be true, but according to the articles I've found utility is still significantly cheaper.
"The main reason I am excited about residential over Utility is it so much easier to execute. Each Utility Project is unique and requires extensive engineering work and paperwork. Their is a high likelihood that there will be delays with utility projects because there are so many actors at play."
Utility scale can be huge projects though, last year First Solar built a single project bigger than the whole of SCTYs installations for the year put together.
"Solar City Management has found a way to double every year and it looks like they will continue to do that which is going to result in some staggering wealth generation"
Like I pointed out before they are still a relatively small player, growing this fast will soon be a lot harder, if utility scale really is significantly cheaper it could put a stop to the rampant growth.
I don't see why utility should have a harder time with legislation than residental, I would argue the opposite would seem more likely given who has the money muscle.
jhm
Well-Known Member
Ratepayers pay for the infrastructure through the rates they pay. Utilities essentially build out infrastructure and recapture the cost through rates. Generally utilities are monopolies, so there is no such thing as a level playing field when monopoly status is granted by the state. So the question should be whether all this infrastructure is worth the cost. If a utility builds a power station, solar or otherwise, hundreds of miles from where the power is used, then it must have the transmission and distribution infrastructure needed to deliver that power at great distance. So all this infrastructure is part of the real cost of utility solar. Rooftop solar, on the other hand, does not need any transmission and distribution infrasture. An inverter and a few meters of wire is sufficient to deliver this power to the house or business. Now if it were legal to sell your surplus power to your neighbor, you would only need a little cable and your neighbor would be willing to pay you nearly as much as their residential rate charged by the utility. But where utilities are legal monopolies, neighbors are not allowed to share power. But the infrastructure to do so would be quite minimal. The reason why it is equitable to require utilities to pay feed in tariffs for surplus solar power is that their monopoly status prevents the owner of rooftop solar from selling to any other entity. So feed in tariffs are a small accommodation to preserve legal monopoly status. There is absolutely nothing level about this playing field. The utilities have the privilege of putting the cost of their infrastructure on to ratepayers, while rooftop solar demonstrates that not all that infrastructure is actually needed. Utilities for their part are claiming that customers with rooftop solar are not paying "their fair share" of infrastructure costs. This, of course, presumes that ratepayers have a more obligation to pay for infrastructure that enables utilities to generate power at great distance and sell it locally. But this argument falls apart when it becomes clear that power can be made and shared locally. It is like saying that one has to pay the shipping cost of produce from South Africa even if one chooses to buy locally grown produce.
Let's be concrete. Part of the reason that utility installations are cheaper per watt than roof top is that these locations are sited where land is cheap and there are not competing economic uses for the land. One is able to choose a location that is idea. So this is exploiting cheap real estate, and this most likely means this land is at substantial distance from highly populated areas where the power is most needed. So transmission lines are required to get this power to ratepayers. If you add the cost of these lines to the cost per watt you may well find that there is not much of a difference between utility installations and SolarCity in the fully installed and transmitted cost per watt.
Utility is much cheaper. Utility and Distributed are very different models. I think there are additional cost with Utilities that you don't have with residential but even with these Utility Solar should be much cheaper than residential.
I don't think the argument works both ways on this, because they work in tandem. The utility solar farms will be built and treated as a utility power plant. At the same time customers are installing solar to decrease the amount they consume. I know some people try to frame it as a battle of Utility vs Residential/Commercial but they are really just very different. On a broad scale I think they are both good for each other and all solar is great for air quality.
I agree with you here completely
That is true but it was 3 year project. Started in Nov 2011, Finished in Nov 2014. Even if they had completed it in a year I think it misses the point. Solar city installed ~500 MW in 2014 and they will install ~1GW in 2015 and ~2GW in 2016 and ~4GW in 2017. At least that is their plan and the path looks pretty clear to me.
I don't think they are a small player anymore. If utility solar and residential solar were at odds in the way you think Solar City would not have been able to grow from 31MW in 2010 to 1GW in 2015. That is two of Topaz Solar Farms in one year when it took First Solar 3 Years to build it. That comparison is not fair but I don't think yours was either
Perfectlogic
Member
@jhm
Okay so the playing field is uneven, the utility has to pay for infrastructure while residents with solar on the roof gets that service for free, this isn't exactly fair either tbh, well I guess its fine as a government incentive to get solar rolling but should be fixed at a later time, I don't really like the fact that resi solar is more subsidized than utility solar though. You can't just act like residents with solar doesn't need the grid, with current battery prices that is just unrealistic, it would be much more expensive for the quantity of batteries needed to stay completely off grid (at least if you want to have power on cloudy days) than to just keep it.
"That is true but it was 3 year project. Started in Nov 2011, Finished in Nov 2014. Even if they had completed it in a year I think it misses the point. Solar city installed ~500 MW in 2014 and they will install ~1GW in 2015 and ~2GW in 2016 and ~4GW in 2017. At least that is their plan and the path looks pretty clear to me."
I don't think you should be so sure about that continued growth, especially when you agree that utility scale solar is cheaper, because if utility and resi solar then were to compete on an even playing field in the future then utility wins.
Okay so the playing field is uneven, the utility has to pay for infrastructure while residents with solar on the roof gets that service for free, this isn't exactly fair either tbh, well I guess its fine as a government incentive to get solar rolling but should be fixed at a later time, I don't really like the fact that resi solar is more subsidized than utility solar though. You can't just act like residents with solar doesn't need the grid, with current battery prices that is just unrealistic, it would be much more expensive for the quantity of batteries needed to stay completely off grid (at least if you want to have power on cloudy days) than to just keep it.
"That is true but it was 3 year project. Started in Nov 2011, Finished in Nov 2014. Even if they had completed it in a year I think it misses the point. Solar city installed ~500 MW in 2014 and they will install ~1GW in 2015 and ~2GW in 2016 and ~4GW in 2017. At least that is their plan and the path looks pretty clear to me."
I don't think you should be so sure about that continued growth, especially when you agree that utility scale solar is cheaper, because if utility and resi solar then were to compete on an even playing field in the future then utility wins.
Residents with solar don't get to use the infrastructure for free. They pay for all of the energy that they use. In some cases they have to pay 50 dollars a month for having the solar.
"I don't think you should be so sure about that continued growth, especially when you agree that utility scale solar is cheaper, because if utility and resi solar then were to compete on an even playing field in the future then utility wins. "
If starting tomorrow all utility solar installed in the US would be installed for free I think Solar City would still be successful. Utilities are still going to charge you for your power and they will have a bunch of graphs to show you why they have to charge you what they do. The point is it really does not hurt Solar City at all if Utility Solar does extremely well. In fact I think they will get into the utility solar game once they ramp up their manufacturing.
"I don't think you should be so sure about that continued growth, especially when you agree that utility scale solar is cheaper, because if utility and resi solar then were to compete on an even playing field in the future then utility wins. "
If starting tomorrow all utility solar installed in the US would be installed for free I think Solar City would still be successful. Utilities are still going to charge you for your power and they will have a bunch of graphs to show you why they have to charge you what they do. The point is it really does not hurt Solar City at all if Utility Solar does extremely well. In fact I think they will get into the utility solar game once they ramp up their manufacturing.
Perfectlogic
Member
If some of the cost of the infrastructure is incorporated into the rate paid to the utility (which is how I understood jhms post), then the residents using their own solar panels does get at least some of the advantage of being connected to the grid for free (paid for by the majority of people who doesn't own solar panels), which gives residental solar a one might say unfair advantage to utility scale solar at the moment.
The size of the net-metering benefit depends on the structure of your rate. Commercial customers' electric costs are mostly fixed charges and demand charges; there is still a need to manage down your peak load, which may or may not match your solar production. Residential customers have a small fixed charge, with most of the cost assigned to a ¢/kWh charge, but that's changing as utilities wise up to the revenue crunch caused by energy efficiency and behind-the-meter generation.
The other question is whether the net-metering benefit exceeds the value the distributed generation creates for the grid. A recent study by the Maine Public Utilities Commission shows that distributed solar creates 13.8¢/kWh of 25-year levelized savings to the utility through lower energy procurement costs and reduced need for future investment in T&D. (There was another big source of value from reduced air emissions, bringing the total benefit to nearly 30¢/kWh.) So I'd argue that paying solar (in Maine) less than 13.85¢/kWh is an unfair charge. Net metering here gives a slightly higher "payment" to solar, but not unreasonably so IMO.
Perfectlogic
Member
Net metering might or might not be of benefit to the utility, that is not my point though. My point is that residental solar seems to have an unfair advantage against utility scale solar right now as resi doesn't contribute to grid cost and utility scale does. If this changes residental solar might lose momentum as utility seems to be the cheaper option, that's all I'm saying, I'm a big solar fan and have money invested, just not in SCTY.
Thanks for linking the study and quoting the 13.8 C/kWh. I have seen a lot of articles reference the report but not slit specifics and not link the report. As always, much appreciated.
Really liking this! :wink: SolarCity Expands to New Hampshire
http://www.streetinsider.com/Press+Releases/SolarCity+Expands+to+New+Hampshire/10494166.html
SolarCity currently serves 17 states.
http://www.streetinsider.com/Press+Releases/SolarCity+Expands+to+New+Hampshire/10494166.html
SolarCity currently serves 17 states.
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Zzzz...
Member
Factory construction progress with photos:
SolarCity factory slowly taking shape - Business - The Buffalo News
"SolarCity will be able to start installing some equipment in the $900 million factory early next year and that production will reach full capacity in the first quarter of 2017."
SolarCity factory slowly taking shape - Business - The Buffalo News
"SolarCity will be able to start installing some equipment in the $900 million factory early next year and that production will reach full capacity in the first quarter of 2017."
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