No. 02 – Bullish on #Solar – #Stocks

What happens to an industry when the big names get hammered in the stock market? Everyone begins to worry.

SolarCity and Sunrun were once the market darlings but are now casualties of their own fame and the momentum of a larger downward trend in all markets, especial the oil industry. Cheap oil has reduced the urgency to switch to solar, at least in the consumers’mind.

But what about stocks? I though COP21 would have had a stronger affect on renewables. In 2014 I wrote about the solar trade war and how China would be left with glut of solar panels unless the Middle East and India stepped in the buy up the supply. It was surprising to hear Saudi Arabia  ambitiously tout their renewable energy plans, even implying that they would reduce their reliance on oil. Well, now we see the fruits of those seeds. (Saudi Arabia was smart enough to put quite a bit of cash in its sovereign wealth fund (which was the third largest in the world) to reduce the impact of the economic shocks.)

And what about Neveda and Net-metering? The debate has grown increasingly hot in Hawaii and Nevada, leading me to believe that utilities have fround their golden nugget. Nevada is a bear market for solar. Could that wave spread to other states and jurisdictions? Forget Big Oil, beware of Big Utility.

I’ve sold solar stocks toward the end of 2015, and the remaining stocks I have are so devalued that it wouldn’t make a difference if I continued to hold them. They can only increase in value. And that’s the outlook for solar – it can only get better, but it might get worst before it does.

[Update on my attempt to contact Solar companies operating in Nevada: I did receive one call from a gentleman operating there, and I want to apologize for not calling him back. Talk to you soon.]

No. 01 – Is SolarCity’s move to cease operations in Nevada indicative of all companies operating there?

That is what I planned on finding out, but unfortunately getting through to some of the entities there was harder than I thought.

After reading about SolarCity I felt that the Solar Power market would now be open to small to mid-size companies. Maybe they would be able to capitalize on the news and start to market to their service;”We’re still here.” I went on line, typed in solar installers in Nevada. I printed out a list of about twenty companies operating in Nevada. I called eight that looked reputable, and didn’t get through to anyone. Not one. One company’s number led me to a little old lady; sorry Ma’am. Most of them had answering services; “for our directory press 1.” No wonder national companies are able to dominate the market, there’s no competition. And now the impression is that there’s no market at all. SolarCity’s announcement is dominating the discussion about Solar in Nevada.  I was expecting to reach people that would be willing to discuss their plans to innovate, advertise, and fight for market share. I wanted to know whether their customers had questions, whether they even thought that the decision actually hurt the Nevada solar market. I also wanted to know whether or not there was a demographic that could still be marketed to, such as conservationist, empty-nesters, upper middle-class owners, green renovators, off-grid homeowners, farmers, and businesses. Tomorrow NV Energy is supposed to submit their rate plan for Net-metering, I’d be nice to hear from the industry, not just SolarCity, about their plans for 2016 under the new rate scheme. Stay tuned.

Net metering will benefit Montana

“We are citizens who lobbied our legislators in support of the recently tabled bills that would have expanded opportunities for individual Montanans to generate renewable energy for their homes or businesses. Known as “net metering,” our proposals would have removed needless legal barriers so that on-site renewable electrical generation could be less costly and more accessible to all Montanans.”

More Americans are installing rooftop solar and buying less electricity from their utilities | PV Buzz : PV Buzz

But utilities see things differently. As solar technology gets dramatically cheaper, tens of thousands of Americans are putting photovoltaic panels up on their roofs, generating their own power. At the same time, 43 states and Washington DC have “net metering” laws that allow solar-powered households to sell their excess electricity back to the grid at retail prices.

That’s a genuine problem for utilities. All these solar households are now buying less and less electricity, but the utilities still have to manage the costs of connecting them to the grid. Indeed, a new study from Lawrence Berkeley National Laboratory argues that, without policy changes, this trend could soon put utilities in dire financial straits. If rooftop solar were to grab 10 percent of the market over the next decade, utility earnings could decline as much as 41 percent.

Warren Buffett’s Energy Company Says Net Metering Should Be ‘Eliminated’ : Greentech Media

Berkshire Hathaway Energy, the holding company owned by famed investor Warren Buffett, is weighing in on the debate over how to compensate distributed generation.

In a strategy document written by SVP Brent Gale for a legal conference in July, Berkshire Hathaway Energy outlined its position on net metering, saying it should be scrapped in favor of a system that recognizes utility fixed-grid costs and utilizes distributed generation at times when it’s needed most.

via Warren Buffett’s Energy Company Says Net Metering Should Be ‘Eliminated’ : Greentech Media.

German, U.S. Home Energy Storage Incentives Offer Divergent Visions for the Smart Grid | Plugged In, Scientific American Blog Network

In the United States it’s a different story. Solar power generated by electricity customers is typically either “net metered” or paid a “value-of-solar” tariff. Under a net metering rate, produced solar energy essentially rolls the electric meter backwards, i.e. it is valued at exactly the price of retail electricity. Value-of-solar tariffs pay for solar at a rate calculated based on its overall environmental and system benefits. Rates calculated by Minnesota’s Public Utility Commission (14.5 cents per kilowatt-hour) and Austin’s municipal electric utility (12.8 cents per kilowatt-hour) both exceed retail energy rates. Under both of these solar tariffs, the economic decision is to send solar electricity directly into the grid, rather than save it for later use in the home.

We’re paying more for #energy even though we use less.

“U.S. consumption of nuclear power totaled 769 million megawatthours in 2012, a 3-percent decrease from 2011.  The top generation states were Illinois, Pennsylvania, and South Carolina. 
U.S. expenditures on nuclear fuel totaled $5.7 billion in 2012, a 5-percent increase from 2011.”
Source: EIA

Overall, residential energy usage is down, but we’re paying more. And rates will continue to increase. Why? To finally upgrade the grid to be compatible with technology – the Smart Grid, Net-Metering, smart home electronics, and the power from various distributed energy producers. In other words, as consumers, residential and commercial, start to find ways to decrease their energy usage the utilities were slow to make the jump to more efficient methods, like HVDC transmission lines.

What are HVDC transmission lines? Let’s say Utility PowCo produces electricity by burning coal to heat water to turn turbines that generate the electricity that we use. Guess what, they do that in the rural areas of your state, and then they have to bring it to your electrical outlet. They have to first push that power through various transformers lowering the current , then upping the current and then lowering it again to you, over hundreds of miles of inefficient transmission lines. HVDC takes the power from the generators at high voltages and the power remains at the level until it reaches the substation in the city, so there is less loss.

Resistance to change is expensive, and damaging to customer relations. Distributed Energy producers, like Photovoltaic/Solar Power owners, create power onsite, at the point of need, and distribute excess energy to the grid for use by everyone. Homes and business that utilize Photovoltaics not only help the environment, they help the grid by lowering load and ensuring supply by producing power. Photovoltaics / Solar Power will cause energy cost to be cheaper for everyone.

Goldman Sachs to Tesla: You are not that special – Energy Ticker – MarketWatch

Net metering — in which solar customers sell excess energy to the grid, getting credits for when they need to draw power from it, like at night — is under threat in some states and is an uncertain model that could render solar systems uneconomical, Goldman said.

With storage, however, consumers would no longer be tied to the grid and grid parity — the point at which solar energy costs roughly the same as power from the grid — is only a decade away in some states, Goldman said.