SolarCity: Fanning the Flames
by Debra Fiakas CFA Solar power installer Solar City (SCTY: Nasdaq) has attracted a swarm of shareholder lawsuits in recent weeks. The stock is trading at a price level 44% below its 52-week high of $88.35 set in February 2014. That has to be disheartening for those who were on the wrong side of the trades at those lofty levels. In February when traders were bidding $88 and change for SCTY, the stock was trading at about 50 times revenue and 47 times cash flow from operations. Of course, since the company had yet to produce...
New Ways to Invest in Solar Like Buffett
Tom Konrad Over the last couple of years, investors who were hoping to do well by doing good have gotten bad sunburns. Since the start of 2011, the two ETFs which track the solar sector, Guggenheim Solar (NYSE:TAN) and Market Vectors Solar Energy (KWT) are down 74% and 75%, respectively, even after the large jumps up in the first week of the year. That jump was in large part caused by the January 2nd purchase of two large solar projects by Warren Buffett controlled MidAmerican Solar from Sunpower Corporation (NASD:SPWR.) You might wonder, Why would...
Solar Rooftop Lease Securitization A Ground-Breaking Success
Sean Kidney Last week we blogged that SolarCity (SCTY) and Credit Suisse were about to issue a new $54.4 million, climate bond – a rooftop solar lease securitization. It’s out: BBB+, 4.8%, 13 years. The long tenor is interesting – and great. And S&P’s BBB+ rating suggest those credit analysts may be beginning to understand solar. This bond has been long-awaited by the green finance sector, who are hoping it’s the harbinger of things to come. I did get the chance to look at the S&P opinion. Their rating reflected, as they put it, their views on over-collateralization (62%...
Making Residual Value Real: Where is Solar’s Emilio Estevez?
by Colin Murchie Seeking Solars' Emilio Estevez It is no secret that costs of capital must decrease to make distributed generation a massively scaling resource. And, as costs of capital steadily decrease, the “residual value” – what happens to the asset once the PPA has run out – becomes more and more important. With that in mind, it no longer seems reasonable to fill the years after the PPA’s expiration – with a row of zeros on the pro forma. There is residual value there that is often...
Two More Mega Solar Deals In China
Doug Young More bright signs are emerging in the solar panel sector with word of 2 major new tie-ups, one involving ReneSola (NYSE: SOL) in Japan and the other Yingli (NYSE: YGE) in China. In the first, ReneSola has signed a massive deal to sell panels to a Japanese solar power plant developer. The latter case looks similar, with Yingli in its own deal for a major joint venture to co-develop new solar power plants with one of China’s top nuclear power companies. The deals point to the huge potential from the China and Japan markets for solar...
Why Power-Save (PWSV.ob) is No Longer on our Stock List
Mea Culpa. We often get request from readers to add companies to our Alternative Energy Stocks list. Since the field is very active, we do some quick checks to make sure that the companies at least: Provide enough information to make an informed investment decision. There's nothing obvious which indicates serious investors wouldn't be interested. We by no means feel that everything in the list is a good investment, but we do feel that our list a good place to start your own research. Usually. Last weekend, we received a request from a shareholder to add Power-Save...
Beijing Administers Tough Medicine to Solar Cos
Doug Young Solar Injection photo via Bigstock A report in Thursday's China Daily is providing the clearest indication yet that Beijing is delivering some tough medicine to many of the nation's smaller solar panel and polysilicon makers by letting them go backrupt to return the struggling sector to health. Up until now, much of the talk in China has focused on rescuing the money-bleeding sector through a comprehensive bailout plan designed to create about a dozen major players as the industry's backbone. But little has been...
Tesla and SolarCity: When Acquisition Strategies Run Amok
by Paula Mints When two companies with negative financials and high debt marry a good response to the nuptials is … Huh? When Toto pulls back the curtain in the Wizard of Oz to reveal that the Wizard is just a normal man with no special powers the Wizard says: Pay no attention to the man behind the curtain. In the case of the proposed stock acquisition of SolarCity by Tesla pulling the curtain would reveal two debt ridden companies with cash flow problems. Just the Facts Please The facts are: two companies with...
How China Came To Dominate Solar Manufacturing
by Paula Mints
The PV industry is global, and its pricing function has a cultural basis. Particularly as it is dominated by China, without an understanding of China and its market motivations, it is impossible to understand why PV manufacturers today, all rational actors, willingly accept 15% or lower manufacturing margins when margins for like industries are higher.
Examples from other industries include: Coal 40% to 50%, Iron and Steel 20%, Construction ~30%, Appliances 30%, Aluminum 20%, Industrial Machinery and Components 40%, Aerospace 40% and Agriculture 8%.
In the PV industry the average margin is 8%. Congratulations PV, you are on par with agriculture.
Aside from significant government...
The Cadmium Telluride Solar Factory Race
by Joseph McCabe, PE Solar manufacturers are racing to build the next cadmium telluride (CdTe) photovoltaic (PV) factory in the United States. Three major CdTe on glass factories in the US have been recently announced each with a unique starting point. Abound Solar has won a US DOE loan to support a new 640 MW/yr facility in Tipton, Indiana. General Electric (GE) recently announced buying Primestar. They indicate that they will be building the largest PV manufacturing facility in the world. Finally First Solar has announced a 250 MW/yr facility to be built in Mesa City Arizona near...
Chinese Commercial Solar Group Formed To Tackle Trade Wars
by Doug Young Chinese solar panel makers have taken an important step to solving their ongoing trade spat with the west by formally launching a private sector trade association to speak on their behalf. The move gives the panel makers their first truly commercial representative to discuss the matter with peers in the US and Europe, providing a better alternative to the government-backed groups that previously spoke for them. This kind of step is long overdue, and should help to de-politicize and hopefully solve what is largely a commercial matter, involving western claims of unfair state...
China, EU Solar Talks Less Cloudy
Doug Young After a disastrous round of talks last month that broke down almost as soon as they began, China and Europe look set to try again with a new round of negotiations to resolve their dispute over the EU’s claims of unfair state-support for Chinese solar panel makers. Much has changed since the failed round of talks in late May, including a growing number of individual European leaders who want to resolve this dispute through negotiations rather than trade wars. As a result, this new round of negotiations will take place between top-level government officials, an important...
Trina Joins Solar Fund Raising Queue
by Doug Young Just a day after the solar panel sector was hit by a new negative trade ruling from the US, Trina Solar (NYSE: TSL) gave its investors another unwanted surprise with word that it is preparing to raise more than $200 million through a combination of new stock and bond offerings. Trina joins a growing list of solar panel makers that are looking to western capital markets as confidence returns to the sector following a prolonged downturn dating back to early 2011. The fact that Trina and others are turning to western capital markets to...
Chinese Bureaucracy Casts Cloud Over Shiny Solar Finance
Doug Young Bottom line: Complaints of problems from a major solar plant builder reflect the difficulty of new construction in China, and could wreak havoc on the sales and finances of panel makers and their construction partners. Solar entrepreneur Shi complains of bureaucracy Two solar energy news items are showing both the attraction and also the frustration that developers are feeling as they try to build new clean-energy power plants to help China wean itself from its dependence on fossil fuels. On the attraction side of the story, the industry...
JA Solar and Renesola Rush to Reassure Creditors
Doug Young Mid-sized solar panel makers JA Solar (Nasdaq: JASO) and ReneSola (NYSE: SOL) are both in the news today discussing their finances, in what looks like an attempt to calm the nerves of investors and creditors who are no doubt worried following the bankruptcy forced upon former industry leader Suntech (NYSE: STP) earlier this week. All of these companies have billions of dollars in debt which they used to build up their manufacturing operations over the last decade, and big amounts of that money will be due for repayment in the next 2 years. Meantime, the...
What Just Happened: Chinese Solar-Boom or Bubble?
2016 was a wild year and not just for solar and after decades of reliance on government incentives, subsidies and mandates the global solar industry may be inured to unpredictability but the industry as a whole should be wary of global trends. Solar PV expert Paula Mints looked at a number of the developments for solar companies in the December edition of SPV Market Research's Solar Flare. Adapted for AltEnergyStocks.com, this series of articles is reprinted with permission. China’s 2016 market for solar deployment soars to near 30-GWp: Solar PV deployment in China ballooned in 2016 to...
