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  • Micron Technology: Worth Between $29-33 Per Share, Strong Buy On Market Correction [View article]

    Micron will file an 8-k within four business days of the transaction.
    Apr 19 07:20 PM | Likes Like |Link to Comment
  • What Is Wrong With Solar Leases And PPAs And How Can The Industry Fix Them? [View article]

    Thank you for the time and thought you put into this article. Actually, thank you for the previous ones also, which I have now read.

    You have raised all the right questions. I don't think your stated methodology for finding the answers will work though.

    First, the solar leasing companies are not likely to ever voluntarily adopt your solution. If they valued leases fairly it would kill their marketing and their financing. Customers won't sign up for a system that has a projected annual cost higher than its savings in electric bills.

    Second, it will kill their financial results and their ability to borrow against those now-worth-less leases.

    I just had an engineer-salesman from a local solar installation company at my house trying to sell me an addition to my solar system. He told me that the system was good for 35 years without any maintenance. When I responded that there was no data supporting that and 15 years was even a stretch his retort was "Well, I'm a salesman."

    Actuaries cannot help. They need a large sample of data to predict from and that data does not exist. We can't count how many solar systems are still viable after 20 years because there aren't any to speak of out there. Even a ten-year old sample is too small to be useful.
    So we have to use our own heads. A typi9cal homeowner's rooftop area is limited. "Good" rooftop area is even more limited. Solar panels facing north do not generate power efficiently. Solar panels blocked by trees don't either. Etc.
    The useful life of an existing system depends on what is available to replace it and use the available rooftop area in a more useful way. The amount of wattage a solar panel can produce from the same amount of sunlight is growing at a very high annual rate. The wattage rating of the same size panel increases every year and the efficiency with which that panel can convert sunlight into DC power also increases every year. In the last year available panels went from 255 watts to 300 watts and efficiency ratings on those panels went from 15.5% on the 255s to 18.3% on the 300s. That works out to an increase from 39.5 watts per panel to 54.9 watts per panel or 39% more. An actuary can't rationally use one data point like that to project anything. Even ten data points aren't enough. My head can do some off-the-cuff projections though.

    Let's start with capitalizing that 39% annual increase. 1.39^5 is 517% and 1.39^10 is 2673%. The magic of compound capitalization rates. Let's arbitrarily cut that 39% presumed capitalized growth rate in half to 19.5%. That works out to an increase over five years of 244% and 594% over ten years.

    Visualizing my own system in that context tells me that I might well be able to power my whole house and two electric cars in five years by replacing my system with one with newer panels and micro-inverters.

    What would that cost me? Well, prices are dropping at about 12% annually but higher wattage panels and higher capacity micro-inverters cost more than their lower wattage brethren. Let's assume that the price drops balance out the higher wattage increases. If that proves true, I'll be able to replace my whole system in five years cost-effectively and power my whole house with three times the current production left-over. Maybe I can sell the left-over wattage to the utility? It can store it and deliver it at night. Hmm. Enough me's and we won't need any coal or gas generating plants. Oops. That opens a host of questions about how the utilities pay for maintaining the grid. maybe they will dump the coal and gas-fired plants and pay me only what it would have cost them to produce that energy saving enough profit potential to cover their needs? Or maybe not?

    I welcome anyone pointing out my mistakes. I always make some. Mistakes are very valuable to me. I have learned much of what I now know by making them. Ah, if only I'd made more of them quicker. Maybe then I'd be smart enough to figure this out.

    But no matter. I only need to figure out a little bit of it to make a lot of money in this cockeyed economic environment.
    Apr 19 01:25 PM | 1 Like Like |Link to Comment
  • SolarCity Retained Value - A Word To The Investors [View article]

    >>The modeling is too complex.<<

    Yes, it's complex. But that is where the money is.

    >>There are too many variable and too much uncertainty.<<

    There are a lot of variables and there is a lot of uncertainty. Many of those variables lend themselves to off-the-cuff guestimates which reduces the uncertainty by orders of magnitude. That is where the big money is.

    Besides, a Monte Carlo simulation on all the variables over all their respective ranges would take a super computer a lot of years. The human mind is better at this sort of problem.
    Apr 18 08:05 PM | Likes Like |Link to Comment
  • Intel: My Take On The Earnings Report [View article]

    >>fab 42 is secretly getting equipped.<<

    How do you secretly equip a plant that big? If Intel can do that, do you think they would consider hiding my house from the tax collector? I'd pay a fair price. I just got my bill.
    Apr 18 07:01 PM | 2 Likes Like |Link to Comment
  • Is Tesla's Gigafactory Becoming A Gigafarce? [View article]

    >>Frankly, I'm beginning to wonder whether Mr. Musk has an edifice complex.<<

    I don't believe the "beginning" or the "wonder" parts.

    Besides, what's wrong with having an edifice complex? It's not paranoid to think that someone is following you if someone is following you.
    Apr 18 05:52 PM | 1 Like Like |Link to Comment
  • SolarCity Retained Value - A Word To The Investors [View article]

    One last comment.

    >>...we also believe a 20% or more downward revision is likely.<<

    I would put it at "or more" and put the "or more" at 80%.
    Apr 18 04:33 PM | 1 Like Like |Link to Comment
  • SolarCity Retained Value - A Word To The Investors [View article]

    I'll look forward to reading it.
    Apr 18 03:36 PM | Likes Like |Link to Comment
  • SolarCity Retained Value Redux: The Utilities Strike Back [View article]

    >>the flaw with the scenario is the assumption that utilities raise per kWh charges. That is unlikely.<<

    I agree. The scenario results in the slow death of any utility which implements it and sticks to it. Conclusion: No utility will do that.

    Each utility will react differently. And each reaction will morph over time into something else.

    Next question: In the end, what happens to rooftop solar generation?

    My view is that rooftop solar generation will inevitably grow to supply most of the power needs of single family houses. The reason is simply that it is cheaper than generating the power way over there and transporting it way over here to where I am. The sun shows up every day for free. Well, almost every day. I live in Las Vegas.

    How much of our power needs will rooftop solar eventually supply?
    I think the answer is mostly all of it. I can generate far more energy off my roof than I can use - even with two plug-in electric vehicles.

    Let's say that the area of the single family rooftops remains stable or grows at a modest pace each year. The aggregate capacity, at present efficiencies, of that area can supply all the energy needs of all the single family houses that exist and have some left over. As costs come down and efficiencies increase and financing becomes more available, that will happen. As for the rest of the energy needs, local solar grids will supply that.

    Costs are coming down. My system costs 22% less today than it did a year ago. Prices are falling. That happens when volume increases. But more than pricing, the single most important factor is efficiency. Efficiencies are skyrocketing.
    For example, an LG 255 watt panel (about a year ago's latest and greatest) produces power from sunlight at an efficiency rating of 15.5%. An LG 300 watt panel has an efficiency of 18.3%.
    15.5% of 255 is 39.5 watts. 18.3% of 300 is 54 watts. That is an increase of 39%.
    At that rate, it won't be long before the sun eclipses natural gas and coal as the most cost effective way to get power delivered in usable form.

    We still need the grid, at least for a long while longer, but we no longer need coal or natural gas fired generation plants. Even nuclear generated energy will become obsolete due to the cost of maintaining the generating plant. Hydro I don't know about. Falling water is pretty cheap. Gravity doesn't cost any more than sunlight does.

    So I suggest that we brainstorm together and try to figure out which of your (a) to (e) reactions will dominate and in which sequence each will be employed and where. There has got to be gobbles of money to be made in even coming close to figuring that out.
    Apr 18 03:23 PM | Likes Like |Link to Comment
  • SolarCity Retained Value - A Word To The Investors [View article]
    Nice analysis, CA.

    I have a partial solar system installed. I cannot imagine any realistic scenario which would result in my keeping that same system over 15 years, much less renew a lease I could terminate. The technology is moving too fast. At the very least, I would be replacing my 285 watt panels with same-sized 600 or 1600 watt panels and upgrading the micro-inverters to a higher capacity. And that is so even though it means throwing away the old system.
    Apr 18 02:26 PM | 1 Like Like |Link to Comment
  • SolarCity Retained Value Redux: The Utilities Strike Back [View article]

    >>But the utilities are all hot and bothered by a paltry amount of solar generation when many of them have been encouraging conservation for years. It doesn't add up.<<

    I don't think that the current amount of solar generation is what is troubling the utilities. I think, rather, that the utilities see the future and it looks bleak for their current business model.

    The future, as I see it:

    1. More household rooftops install solar panels and reduce the amount of energy they purchase from the local utility.
    2. The local utility still has the same fixed costs, so it must raise rates to cover those same costs from the fewer kWh's now being sold every month.
    3. Higher rates make it cost effective for additional household rooftops, which were formerly at break-even or less, to install solar panels. Also, those with partial systems, like me, where the solar system was only cost effective because of a limited subsidy which has now maxed out, install more panels.
    4. This reduces the amount of energy sold by the utility each month further.
    5. The utility has the same fixed costs so the same cycle repeats driving energy bills higher and encouraging more households to go solar which drives energy bills higher which...etc., etc., etc. until only Charlie down the block is left as a customer and his monthly energy bill is over $144 million and he ain't paying it.

    Anyway, that's what I think. But my crystal ball is still cloudy and my know-it-all genii is busy doing laundry, so I could be wrong -- again.
    Apr 18 02:16 PM | Likes Like |Link to Comment
  • Several Reasons Why Micron Is Undervalued [View article]
    From solarpersona's link above:

    "Leadtimes for memory products range from 6 weeks to allocation, and ASPs are rising. Mobile DRAM is more expensive than other memory products, Avnet product experts say, and now represents 28 percent to 30 percent of all DRAM sales versus 10 percent in 2012. As a result of higher pricing in mobile, other DRAM ASPs are ticking up as well."

    This is what I have been predicting would happen. Micron management's forward ASP guidance is not believable.

    My thanks to solarpersona. Good sleuthing.
    Apr 18 01:53 PM | 3 Likes Like |Link to Comment
  • Intel And The Known Unknowns [View article]

    >>I guess my point is this - there is no evidence whatsoever that Intel has made any headway into filling capacity in a year or two from now.<<

    Yup. It will take longer than that.
    Apr 17 08:35 PM | Likes Like |Link to Comment
  • SolarCity Retained Value Redux: The Utilities Strike Back [View article]

    >>the next article (or may the one after that)<<

    I'll look forward to them both then.
    Apr 17 07:40 PM | Likes Like |Link to Comment
  • Intel And The Known Unknowns [View article]

    >>If there were any signs that Intel was about to sign a large WSA, the development of Fab42 wouldn't have been put on ice.<<

    It would have to be a very, very large WSA. Fab 42 is very, very big.
    Apr 17 07:35 PM | Likes Like |Link to Comment
  • Several Reasons Why Micron Is Undervalued [View article]


    >>I'd love it if they spent more time trying to communicate well.<<

    I wouldn't.

    If they did, I wouldn't have had the opportunity to get the stock at bargain basement prices. Management's communication style makes me work for the analysis but then gives me advance information before the analysts and hedge fund managers figure it out.
    Apr 17 06:50 PM | 4 Likes Like |Link to Comment