Tue, May 5, 5:06 PM
- SolarCity (NASDAQ:SCTY) installed 153MW of solar systems in Q1, +87% Y/Y and above guidance of 145MW. Installations are expected to rise to 180MW (+69% Y/Y) in Q2. Full-year guidance for 920MW-1GW of solar deployments (not the same as installations) is reiterated.
- Q2 revenue guidance of $86M-$92M ($70M-$74M for op. lease and system incentive revenue, and $16M-$18M for system and component sale revenue) is below a $96.8M consensus. EPS guidance of -$1.60 to -$1.70 is below a -$1.48 consensus.
- Q1 bookings totaled 237MW, +15% Q/Q and +74% Y/Y. 27.4K new customers were added, up from Q4's 21.3K and bringing the total count to 217.6K. Estimated contracted payments remaining rose by over $1.1B Q/Q to $6.11B, and retained value forecast by ~$250M to $2.7B.
- Cost/watt was $2.95, up 3% Q/Q (seasonality is blamed) but down 9% Y/Y. A record low cost/watt is expected in Q2; the company is still aiming for $2.50 by 2017. SolarCity ended Q1 with $576M in cash/short-term investments, $479M in long-term debt, $100M in solar bonds, $312M in solar asset-backed notes, and $796M in convertible debt.
- Shares have fallen to $57.90 AH.
- Q1 results, shareholder letter (.pdf), slides (.pdf)
Tue, Apr. 28, 3:10 PM
- Following years of oversupply, a solar module shortage might emerge in 2H15 thanks to rising demand, Canadian Solar (CSIQ +5.3%) CEO Shawn Qu tells Bloomberg.
- He notes Canadian (relies heavily on Chinese plants) plans to expand its module capacity to 3.5GW from a current 3GW, and its cell capacity by 400MW to as much as 2GW. Bloomberg has forecast global installations will rise to 57.2GW in 2015 from 40GW in 2013.
- Qu also reiterates Canadian's plans to do an IPO a solar project YieldCo, and says it could arrive in 2H15. The YieldCo will contain low-risk U.S., U.K., Canadian, and Japanese projects.
- Chinese module makers Trina (TSL +3.4%), JA Solar (JASO +3.9%), and JinkoSolar (JKS +2.8%) have joined Canadian in rallying on a quiet day for equities. U.S. solar installers SolarCity (SCTY +2.2%) and Vivint (VSLR +2.2%) are also higher, as is solar optimizer/inverter maker (and SolarCity/Vivint supplier) SolarEdge (SEDG +3.9%).
- ETFs: TAN, KWT
Wed, Apr. 22, 10:05 AM
- Continuing its aggressive financing pace, SolarCity (NASDAQ:SCTY) has "activated a fund including an investment from Credit Suisse that is expected to finance more than $1 billion in commercial solar energy systems - including battery storage systems - for businesses, schools and government organizations across the U.S."
- SolarCity thinks the fund is the largest of its kind, and expects it to "finance more than 300 megawatts of new commercial solar projects over the next two years." It follows the January creation of a $200M facility with Credit Suisse to finance system purchases via SolarCity's MyPower residential loan program.
- SolarCity has also partnered with Goldman on financing deals over the last two years. Shares have risen to their highest levels since last November.
Thu, Apr. 9, 12:29 PM
- Believing "numerous catalysts" exist for the next 6-9 months, BofA/Merrill (Buy) is holding onto its $95 SolarCity (NASDAQ:SCTY) target (71% above current levels).
- Among the potential catalysts: 1) Clarity on California's solar retail rates and net metering policies. 2) Improved booking/installation mix leading to better retained value. 3) The arrival of 2016 installation guidance (possibly in Q4). 4) The "emergence of a cash flow oriented view of [SolarCity's] operating systems."
- The firm values SolarCity's existing operating business at $40/share. It assigns a $55/share valuation to its solar development ops, which was forecast to deliver 15.4GW of installations from 2018-2024. BofA sees SolarCity ending 2016 with 3.1GW of cumulative leased installations that will respectively produce $355M and $200M in unlevered and levered cash flow.
- Also: Though admitting Arizona's policies are a setback - SolarCity has sued a local utility for placing ~$50/month in surcharges on new solar installations - BofA notes "constructive regulatory frameworks" have emerged elsewhere. SA author Simple Investment Ideas argued yesterday Arizona-like utility charges won't hold up long-term.
- Smaller rival Vivint (VSLR +3.2%) has joined SolarCity in rallying.
Mon, Mar. 30, 1:00 PM
- After initially trading lower today, SolarCity (SCTY +1.5%) has caught a bid from an Elon Musk tweet stating a "major new Tesla product line -- not a car" will be unveiled on April 30.
- Musk is the chairman of both SolarCity and Tesla. 15 months ago, the companies announced a backup energy storage solution for SolarCity solar installations that relies on Tesla battery packs. Tesla's gigafactory plans have fueled speculation the company could become a major battery supplier to third parties.
Tue, Mar. 24, 2:24 PM
- Buoyed this year by decent Q4 numbers, solid 2015 guidance, and YieldCo news, solar stocks are adding to their gains today even as the Nasdaq barely budges. The Guggenheim Solar ETF (TAN +0.7%) is up 35% YTD and nearing a 52-week high of $47.00.
- Chinese firms are adding to last week's gains - JinkoSolar (JKS +3.7%), ReneSola (SOL +3.3%), Daqo (DQ +4.8%), Trina (TSL +1.9%), JA Solar (JASO +2.7%), and China Sunergy (CSUN +12.5%) stand out. Beijing recently hiked its 2015 solar installation target by 2.8GW to 17.8GW (up from 2014's 14GW), while setting no specific targets for utility vs. distributed solar installations. The lack of utility/distributed targets is expected to make the goal easier to hit.
- U.S. names aren't getting left out: First Solar (FSLR +3.5%) and SolarCity (SCTY +2.1%) are rallying, as are microcaps RGS Energy (RGSE +6.5%) and Solar3D (SLTD +12.7%). Solar3D, a California installer, has risen 58% over the last 4 trading days.
Thu, Mar. 5, 1:46 PM
- SolarCity (SCTY +2.9%) has joined other solar stocks in rallying following Canadian Solar and Vivint Solar's Q4 reports. Vivint, a SolarCity rival, reported Q4 installations of 50MW above guidance of 45MW-47MW. SolarCity's Q4 deployments (slightly different from installations) totaled 176MW.
- Helping SolarCity's cause: VP Jimmu Chuang offered positive remarks at a Bloomberg conference about the idea of creating master limited partnerships (MLPs - publicly-traded entities for which only distribution payments are taxed) for solar assets.
- Chuang: "[In] this industry, we need a lot of help because the public policy is not as good. REIT is certainly one intriguing idea. MLP, to me, is more exciting because ... we need a lot of tax equity investment because that’s how the structures work." Sen. Lisa Murkowski (R-Alaska) plans to reintroduce a bill that would pave the way for solar MLPs.
- Yesterday: SolarCity expand to New Mexico, sues Arizona utility
Thu, Feb. 26, 9:20 AM
- Hungry as ever to add more project financing, SolarCity (NASDAQ:SCTY) has created a $750M fund to finance residential solar projects in 14 states and Washington D.C. Google (NASDAQ:GOOG), which is no stranger to renewable investments, will be investing $300M in the fund.
- Google and SolarCity partnered on a $280M residential project fund back in 2011. SolarCity stated last week it had already lined up most of the financing it needed to hit a 2015 deployment target of 920MW-1GW.
- SolarCity has risen to $54.00 premarket.
Tue, Feb. 24, 10:18 AM
- Beaten down over the last several months as oil and natural gas prices tumbled, solar stocks are rallying today (TAN +3.9%) after First Solar and SunPower announced they're in talks to form a solar project YieldCo, with plans to eventually do an IPO for it.
- The announcement comes less than a year after SunEdison (SUNE +1.5%) took its TerraForm Power (TERP +1.8%) solar project YieldCo public. Canadian Solar (CSIQ +8.1%), which has said it's looking to do a YieldCo at some point, is among today's biggest gainers (not counting First Solar/SunPower).
- Other standouts: SCTY +3.6%. JKS +6.2%. SOL +5.2%. TSL +4%. JASO +3.1%. YGE +4.3%. CSUN +4.5%. ENPH +2.4%.
Wed, Feb. 18, 4:57 PM
- SolarCity (NASDAQ:SCTY) deployed 176MW of solar systems in Q4, +70% Y/Y but below guidance of 179MW-194MW; it blames delays for "a few large commercial projects." The company is maintaining 2015 deployment guidance of 920MW-1GW (up from 2014's 502MW).
- For Q1, SolarCity is providing installation guidance rather than deployment guidance, arguing it gives "a true reflection of our capabilities before the unpredictability around the timing of inspections in between installation and deployment." Q1 installation guidance is at 145MW, a figure said to reflect Northeast seasonality and typical Q1 commercial softness. Q1 EPS guidance of -$1.65 to -$1.75 is below a -$1.25 consensus.
- Q4 bookings totaled 206MW, -11% Q/Q (seasonality is blamed) but +103% Y/Y. 21.3K new customers were added, raising the cumulative count to 189.7K. Estimated contracted payments rose by ~$900M Q/Q to $5B, and retained value forecast by ~$200M to $2.45B.
- Cost/watt fell to $2.86 from Q3's $2.90; SolarCity is aiming to hit $2.50 by 2017. SolarCity plans to begin installing equipment at Silevo's Buffalo solar module plant in Q1 2016, and reach 1GW of capacity by 2017.
- The company ended 2014 with over $640M in cash/investments, $245M in long-term debt, $230M in convertible debt, and $53M in solar asset-backed notes.
- Q4 results, shareholder letter (.pdf), presentation (.pdf)
Mon, Feb. 2, 11:30 AM
- WTI crude oil soared above $48/barrel on Friday after ISIS attacked the Iraqi city of Kirkuk, and is holding its ground today. Oil/gas producers are rallying, and so are beaten-down solar firms (TAN +2.2%).
- Notable gainers: FSLR +6%. SCTY +9.2%. SUNE +5.5%. SPWR +4.9%. TSL +6.6%. JKS +4.8%. CSIQ +4.6%. DQ +13.2%. VSLR +4.4%. JASO +3.8%. ENPH +3.4%. HSOL +3.6%. YGE +4.3%. ASTI +3.1%. SOL +3.4%.
- RBC made a contrarian call on Friday, upgrading SunPower, JA Solar, and Trina to Outperform. A long list of U.S. and Chinese solar firms are expected to post Q4 results this month.
Mon, Jan. 26, 2:09 PM
- Though WTI crude is still below $46/barrel and the Nasdaq is only up 0.3%, beaten-down solar stocks are posting big gains (TAN +3.9%). Quite possibly helping: Pres. Obama has said the U.S. will help finance an Indian effort to install 100GW of solar capacity by 2022.
- The head of an Indian think tank estimates such an effort would cost $160B. India says it's seeking $100B worth of investments over 7 years. The country's bureaucracy/red tape has often stalled major foreign investments; the new government has repeatedly promised to change that.
- First Solar (FSLR +4.1%) and SunEdison (SUNE +4.1%) are among the companies to have struck deals for Indian solar projects. SunEdison has announced plans to invest up to $4B in an Indian solar manufacturing plant through a JV. First Solar and Trina (TSL +5.4%) are weighing plans to build their own local plants.
- Other notable gainers: SCTY +4.7%. JKS +7.5%. SOL +5.8%. SPWR +2.9%. CSIQ +4.6%. JASO +4.4%. RGSE +3.7%. ASTI +9.3%. HSOL +3.2%. DQ +3.7%.
Thu, Jan. 15, 2:56 PM
- Yesterday's oil rally has proven short-lived: WTI crude is down $1.90 today to $46.58. With equities going in the same direction, solar stocks (TAN -3%) are having another rough day.
- SolarCity (SCTY -3.9%) and SunEdison (SUNE -6.9%) are also contending with target cuts from Canaccord's Josh Baribeau (to $64 and $26, respectively), who nonetheless maintains Buy ratings. "We are choosing to get slightly less aggressive on the riskier high-multiple names in the solar group as a result of growing macro uncertainty and business model changes in 2015."
- However, Baribeau "[remains] confident in SolarCity's momentum," and expects the company to generate "significant value" from its contracted assets in time. Q4 supply chain talks indicate U.S. residential solar demand remains "very strong."
- Regarding SunEdison, he's worried the company is "taking on a greater amount of execution and capital risk following announcements of potential manufacturing capacity and international joint ventures." But he still considers it "the world's leading renewable project developer, with a track record of executing."
- Fellow U.S. solar firms SunPower (SPWR -7%) and Vivint Solar (VSLR -7.6%) are also off sharply. Other industry names are seeing more modest declines, but still generally underperforming the Nasdaq.
Wed, Jan. 14, 9:21 AM| 23 Comments
Thu, Jan. 8, 1:15 PM
- Deutsche's Vishal Shah, bullish on solar for a long time, asserts the "recent volatility in solar stocks, driven largely by oil price weakness, presents an attractive entry point for investors as we expect 2015 to be a year of stable industry pricing and accelerating volume growth."
- Shah expects solar to see a "balanced supply/demand outlook as strong demand from the US and improving demand from China/other emerging solar markets offsets any potential demand weakness in the UK/Japan."
- He observes oil accounts for just ~5% of global electricity output, and sees both solar project pipelines/margins and module margins rising in 2015. Tariffs against Chinese module vendors are expected to be "completely removed."
- His top picks are SolarCity (SCTY +3.3%), SunEdison (SUNE +4.1%), SunPower (SPWR +6.1%), and Vivint (VSLR +0.3%); the first three are faring quite well today. Yingli (YGE +0.2%), however, has been downgraded to Hold due to balance sheet and financial flexibility concerns.
- Other major gainers: FSLR +3.9%. JKS +6%. ENPH +5.4%. CSIQ +3.7%. RGSE +5.2%. TERP +3.2%.
- SunEdison announced today it has bought new wind turbines that will allow it to build up to 1.6GW of wind projects that qualify for U.S. tax credits. The purchase follows the company's $2.4B deal to buy project developer First Wind.
- ETFs: TAN, KWT
Mon, Jan. 5, 1:18 PM
- WTI crude is down by $2.36 to $50.33/barrel, and briefly fell below $50/barrel for the first time since '09. Brent crude is down $3.18 to $53.24/barrel. Solar stocks, no stranger to getting hit hard by crude's decline, are seeing more pain (TAN -2.1%).
- U.S. solar firms First Solar (FSLR -5.5%), SolarCity (SCTY -5.9%), SunPower (SPWR -4.6%), SunEdison (SUNE -6%), and TerraForm (TERP -4.4%) are especially hard-hit. But other names are also underperforming: CSIQ -3.6%. DQ -5.1%. CSUN -4.2%. JKS -2.8%. SOL -3.5%. The S&P is down 1.8%.
- A reminder: Oil accounts for only ~1% of U.S. electricity production, and transmission/distribution costs often have a bigger impact on electricity prices than energy input costs.
- Industry news: 1) Canadian Solar has completed selling two 10MW Ontario plants to renewable energy investment firm RET. 2) Hanwha (HSOL +0.9%) has struck a deal to supply 80MW of modules for a Chilean solar plant. 3) China Sunergy has won a 30MW solar module contract from an Indian solar park builder.
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