Tesla/SolarCity shores up cash flow

[leftWNYbecauseofBS]

So Electrek.co is reporting that Tesla just sold the revenue streams of 36,000 residential solar installations to PGGM, The Netherlands’ second biggest pension fund. This is in addition to 26,000 installs they sold in December of last year. Details of the deal were not announced but a similar deal valued each install at around $6,300.00 which is anywhere from $0.30 to $0.50 on the dollar in terms of the cost. Works out to be about $390,000,000 for both sales.

This type of sale is very common in industries that have upfront costs that are tied into either financing or a contract. A good example is security systems. Almost all of those contracts are sold within months of being inked by finance groups. I worked within this system about 20 years ago and from what I recall there typically will be a window of time for the purchaser to return a contract, typically if payments are not made, but after this period the liability of the contract is removed off the books of the seller.

It's being assumed that the money will help Tesla pivot SolarCity from solar panels to solar roof + power pack systems. What I am curious about is how they will sell these systems. Responsible homeowners budget for new roofs anyways so unlike a solar panel grid they will have the ability to put some cash into the pile. So maybe Tesla looks at the cost of a traditional asphalt roof as the downpayment and then finances the balance?


Another thing that I am curious about is if Tesla sold a package of a new car + solar roof + power packs I would love to see the numbers of a customer who defaults. To start they could repossess the battery system and car but they can also place a lien on the home for the roof. Unless I am wrong, at some point they are going to get most of their money pack in addition to having a 'factory refurbished' program reselling the packs and cars. No?

[WNYresident]

I think the cost of removing the "solar roof" will make the refurbished product costly and what do you put in the place on the house? A large plastic tarp? I can see the car and battery pack being pulled off the property.

I wonder if the life expectancy for the solar roof tiles are going to be as long as a asphalt roof. If so I could see it taking off.

[grump]

We learned today that Tesla/Solarcity is losing money hand over fist. SolarCity switched from leases to homeowner borrowing from third parties because it was coming under increasing pressure from various state attorneys general due to its, shall we say, "unique", lending practices. These were fueled largely by hedonistic millenials serving as sales reps. whose regard for truth is rather fungible. Needless to say if one borrows from a third party lender one loses almost all leverage over Solar City. One has given a mortgage to a lender without regard to the effectiveness of the product one has borrowed for. This is its desired outcome because it's collected it's installation fee upfront and can then ignore the thousands of complaints it receives about its bogus system not delivering promised results, or worse, actually costing its customers money.

[jennifer7]

If solar panels don't work or save money in Arizona were it's Sunny 340 days a year, then how is it going to work in cloudy climate area's, not to mention the snow, rain, ice lol,

[Mr. Lackawanna]

I can't see how the solar panels for the roof will work out for the home owner. The cost of installing the panels is expensive.
The salesman will give the prospective buyer all kinds of numbers to make the sale.
Their is no guarantee that the power companies are going to pay the rates that the salesman states you are going to get.
Somehow I think New York State is going to put a tax on the energy the solar panels generate.

[grump]

Solar City has serious problems. Today we learned that the great new solar panels that look like roofing tiles haven't even been proved workable. Right now they're being tested in California where the sun actually shines some. If they actually work then Solar City might actually start making them locally by and by. Don't look for production any time soon. They're dropping the door to door sales force because of complaints about the "quality" of the service and false promises, complaints that have caught the eye of attorneys general. And the company's new business has fallen off a cliff. Just the type of company that NY taxpayers ought to throw away $750 million on.

[leftWNYbecauseofBS]

Solar City has serious problems. Today we learned that the great new solar panels that look like roofing tiles haven't even been proved workable. Right now they're being tested in California where the sun actually shines some. If they actually work then Solar City might actually start making them locally by and by. Don't look for production any time soon. They're dropping the door to door sales force because of complaints about the "quality" of the service and false promises, complaints that have caught the eye of attorneys general. And the company's new business has fallen off a cliff. Just the type of company that NY taxpayers ought to throw away $750 million on.

Wrote a reply before but it timed out when submitting.....


So it's possible that Tesla/Solar City has some serious problems. Not going to deny that idea based on looking at things. That said, there are other ways to look at this.

To start, the solar installs by Solar City before the Tesla merger are different than what is being discussed. Different on multiple points. Financing being one and panels v. roof material being another. But there is also another large difference between what Solar City installed and what Telsa Energy would install and that's power storage.

Mr. Lackawanna pointed out the issues with the power buyback from power companies, which has been a key sales talking point and a key to making the system provide some sort of return. The problem with a traditional panel install is the power they produce needs to be used at the home or moved back to the grid. There was no storage. This meant that even an owner with a panel install might need to purchase power rather frequently from a power company either due to weather or time of day. With power storage this pretty much is removed from the formula. The Tesla sale, which will be different than the Solar City sales done is that it will include the Power Pack. It comes with storage which throws the formula being used out the window.


The second item I considered is the switch from solar panels to solar shingles is a massive shift. It's not even a product evolution. It's like going from making motorcycles to cars. While both get you from A > B with an engine...that's pretty much where the similarities end. Now if I am a company that is making a product shift like this:

> From an operations standpoint, I would want to slow down one process before I ramped up the other. Almost every aspect of the company is going to need to change to reflect this product change and you need to account for the time/resources to do that.

>From a sales standpoint I would want to slow down the burn of my pipeline as the new product line should be an easier sale and better for the company from a finance perspective. I also need to rebuild the sales operations because, as you pointed about above, they have some issues with an outside sales model.


Again...the sky could be falling and Tesla could be in serious trouble. Or they could just be making some moves on a pivot. I guess we just need to watch this unfold.

[Jeff]

I can't see how the solar panels for the roof will work out for the home owner. The cost of installing the panels is expensive.
The salesman will give the prospective buyer all kinds of numbers to make the sale.
Their is no guarantee that the power companies are going to pay the rates that the salesman states you are going to get.
Somehow I think New York State is going to put a tax on the energy the solar panels generate.

It has nothing to do with the Power company paying you. This is not the model. It has everything to do with the cost of the panels vs the cost of electricity over time.

I generate and net 99.9% of my power needs with my panels. With Electricity at its current rate. (I think its $0.13 KWh?) I am saving about $52,000 over the life of the panels. The panels cost me $11,000 out of pocket. If electric rates increase or spike, I'm insulated from that.

[Jeff]

Power buyback has nothing to do with it. You can't oversize your Solar System and get the state and federal grants. It has to be sized to your needs. If you want more than that you will pay 100% out of pocket for the additional capacity.

[WNYresident]

It has nothing to do with the Power company paying you. This is not the model. It has everything to do with the cost of the panels vs the cost of electricity over time.

I generate and net 99.9% of my power needs with my panels. With Electricity at its current rate. (I think its $0.13 KWh?) I am saving about $52,000 over the life of the panels. The panels cost me $11,000 out of pocket. If electric rates increase or spike, I'm insulated from that.

So your panels are generating enough power to cover 99.9% of your usage? A/C, lights, TV and so on?

[Jeff]

So your panels are generating enough power to cover 99.9% of your usage? A/C, lights, TV and so on?

Correct.

[WNYresident]

That's awesome. I'm surprised. A/C takes some real wattage running during the summer. What is the average wattage per month the array of panels produce?

[Jeff]

That's awesome. I'm surprised. A/C takes some real wattage running during the summer. What is the average wattage per month the array of panels produce?

Well, the hotter and sunnier it is, the more power I generate.

With my 10K system, last year I was pushing well over 1.5 Megawatts in the peak months. Screenshot below.

[WNYresident]

I like charts. Very cool.

[Jeff]

If solar panels don't work or save money in Arizona were it's Sunny 340 days a year, then how is it going to work in cloudy climate area's, not to mention the snow, rain, ice lol,

It doesn't work in Arizona because your government bent over for energy suppliers and struck down net metering. Now instead of Solar producers getting equal price for the power they produce and send back into the grid, they get an arbitrary percentage set on what the power companies save by not building new infrastructure. IE, way less than retail.......

Also, solar producers cannot "bank" their net energy anymore from this legislation. It very much undervalues home owner install solar generation...