Tag: "solarcity"

06/29/13

  08:04:00 am, by Jim Jenal - Founder & CEO   , 452 words  
Categories: Commercial Solar, Residential Solar, Energy Storage

Energy Storage - Coming to a Utility, and Perhaps a Roof, Near You

If the California Public Utilities Commission (CPUC) has its way, investor-owned utilities (IOUs) around the state will have a mandate to acquire 1,325 MW of storage capacity by 2020 as part of the plan to have one-third of all electricity come from renewable sources, according to a report from Bloomberg.

The CPUC’s proposed ruling would allow IOUs to acquire energy storage as part of the “general rate case” process by which utilities build infrastructure and pass the cost on to their rate payers.

Energy storage can help

Energy storage is widely viewed as a critical piece of adding more renewable sources to the grid, given its ability to smooth out the peaks and valleys that come with renewable sources like solar PV and wind.  Possible storage technologies include lithium-ion batteries and even molten salt to store heat to later run a turbine to produce electricity.  Cost of this exercise? As much as $3 billion, or $2.26/Watt.

The proposed rule making is the result of legislation, AB 2514, by our old friend Nancy Skinner, and it is evident that the CPUC “gets it":

Energy storage has the potential to transform how the California electric system is conceived, designed, and operated. In so doing, energy storage has the potential to offer services needed as California seeks to maximize the value of its generation and transmission investments: optimizing the grid to avoid or defer investments in new fossil fuel-powered plants, integrating renewable power, and minimizing greenhouse gas emissions.

The proposal allocates portions of the 1,325 total to each IOU with SCE targeted to procure 580 MW of storage, of which 80 MW should be customer side, as opposed to transmission or distribution connected.

A final adoption of storage targets is due in October.

Meanwhile, in a separate but related announcement, SolarCity made some news when it disclosed that it intends to incorporate a storage offering by 2015 that would serve customers without net metering.  In other words, the storage system would be capable of storing any excess energy created by the solar power system and then feeding it back to local loads without ever sending any energy back onto the grid.  If such a system could be deployed in a cost-effective manner, it would eviscerate the utility’s “fairness” argument in opposing the additional penetration of solar.

But can it be cost-effective?  SolarCity is hoping that its partnership with Tesla Motors will enable it to procure battery packs at a low enough cost to succeed in this new arena.

Of course, a successful energy storage system is more than just batteries, and as we head to Intersolar in a little over a week, a great deal of attention there will be devoted to the energy storage realm.  We will be there and will report back after the show.

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06/22/13

  08:20:00 am, by Jim Jenal - Founder & CEO   , 498 words  
Categories: All About Solar Power, Solar News, 2011, 2012

It's Magic: Copperfield Research Cites RoS on SolarCity

Two years ago we published a piece as part of a three-part series analyzing CSI data in SCE’s territory where we operate.  To this day it remains one of our most popular posts ever, with over 11,000 views.  A year later we repeated the analysis with that year’s data - and that post was also very popular, easily becoming our most viewed post of the year.  In both of those posts, SolarCity - and its curious practices with long delays in building systems and unusual system pricing - was featured prominently.  We didn’t plan it that way - indeed the title of the posts, Outliers and Oddities, reflects how these were stories that simply fell out of the data.

Still, as any blogger can tell you, blogging can be a lonely business and it is often hard to know that anyone is really paying attention.

But yesterday changed that.

Copperfield Research

Copperfield Research

Yesterday we were informed of a report about SolarCity done by the firm Copperfield Research appearing on the investment site, Seeking Alpha.  That 30-page report, titled SolarCity (SCTY) - The Emperor(’s cousins) Have No Clothes - uses multiple charts and graphes from our analyses to support their conclusion that SolarCity is seriously overvalued in the market and that “The bottom line is investors have been hypnotically drawn to SolarCity, like moths to a flame, dangerously ignoring the house of cards on which the story appear to be built.” Ouch.

Indeed, the report has three full pages devoted to our analyses - here’s a sampling of their take:

Run on Sun Founder and CEO Jim Jenal performed a rigorous third party study examining many of the solar installers and developers. IT SHOULD BE MANDATORY READING FOR ANY SOLARCITY SHAREHOLDER OR DEFENSIVE ANALYST. One emphasis for Jenal’s study was his concern that solar developers had been violating a critical segment of the Solar Energy Industry Association’s Solar Bill of Rights. Bullet #8 of the Bill of Rights states, “Americans have the right to - and should expect - the highest ethical treatment from the solar industry.” Jenal believed that there were certain “situations that don’t live up to that Right.” His exposé spent significant time scrutinizing SolarCity’s cost metrics…

Jenal’s comprehensive analysis concludes that this prospective over-reporting of FMV [fair market value] appears to have been occurring consistently dating back to 2008, with the SolarCity tax fraud [their words, not ours] (if FMV was misrepresented) potentially costing tax payers many-millions of dollars!!!

But alas, again due to the sensational analysis by Jenal…

(Emphasis in the original.)

And on it goes (you get the picture).

As we noted at the outset, we didn’t set out to write an “exposé” of SolarCity.  Rather, we were simply trying to understand the market in which we operate and in the course of doing so we stumbled upon the oddities that we reported.  But it is certainly gratifying to see that others have found value in what we published.

Now if we could only get someone to pay attention to what is going on in Glendale

05/11/13

  11:11:00 am, by Jim Jenal - Founder & CEO   , 350 words  
Categories: Ranting

Solar Alliance Formed to Resist Utility Attacks

Facing a growing drumbeat of faux-populist attacks organized by the investor-owned utilities, a coalition of major players in the solar leasing industry has been announced to offer a coordinated resistance. Resistance is important, but it remains to be seen whether this alliance will actually represent the interests of the solar industry as a whole.

Yesterday we learned  (h/t Susan Frank) of the formation of The Alliance for Solar Choice, which described itself thusly:

The nation’s leading rooftop solar companies today announced the formation of The Alliance for Solar Choice (TASC).  TASC believes anyone should have the option to switch from utility power to distributed solar power.  Founding members represent the majority of the U.S. rooftop solar market and include SolarCity, Sungevity, Sunrun and Verengo.

TASC is committed to protecting the choice for distributed solar.  Most immediately, TASC will focus on ensuring the continuation of Net Energy Metering (NEM).  Currently in place in 43 states, NEM provides solar consumers with fair credit for the energy they put back on the grid, which utilities then sell to other customers.  In simple terms, NEM is like rollover minutes on your cell phone bill.  Monopoly utilities are trying to eliminate NEM to halt the consumer-driven popularity of rooftop solar, which is helping create thousands of local jobs around the country.

The website is bare-bones in the extreme - the only information to be found is the single press release.  No links to other supporters, not even a list of member companies beyond the four mentioned.  (There is a link to their Twitter page - with the somewhat unfortunately chosen “TASC_master” handle.)

Now there are literally thousands of solar companies across the country who are threatened by the push by utilities to roll back or eliminate net metering.  Why aren’t any of them included in this “alliance"?  How about a little outreach to the little guys, eh? For the moment we will suspend further judgment as we wait to see how this nascent alliance conducts itself.  Certainly having well-financed entities engaging in serious lobbying efforts could be a powerful countervailing force in the battles ahead. Time will tell.

05/07/13

  11:04:00 am, by Jim Jenal - Founder & CEO   , 856 words  
Categories: Solar Economics, Solar News, Commercial Solar, Ranting

SolarCity Litigation Update

As SolarCity prepares to release its financial statement for the first quarter of 2013 next Monday, we came across a couple of interesting items - actually one is interesting the other is more sickening - about litigation involving SolarCity.  The first of these was discussed in their last filing - it will be interesting to see how the second is treated in Monday’s.

SunPower v. SolarCity

We wrote back in February 2012 about a lawsuit filed against SolarCity by SunPower.  In that suit SunPower alleged that a number of its former employees were hired by SolarCity and that they took SunPower’s trade secrets to their new employer.  In addition to naming SolarCity as a Defendant, SunPower also sued the former employees, including Tom Leyden.  According to the Complaint:

35. LEYDEN connected at least three personal USB storage devices within days of leaving SUNPOWER. At least one of these devices was a portable external hard drive with 2 terabytes of storage capacity.

36. The forensic evidence indicated that LEYDEN copied at least thousands of files containing SUNPOWER confidential information and non-confidential proprietary information to these devices. These files included hundreds of quotes, proposals, and contracts, as well as files containing market analysis, forecast analysis, and business analysis.

37. LEYDEN also copied highly confidential data from the SUNPOWER database on www.salesforce.com. This data included information about major SUNPOWER customers accounting for over $100 million of sales throughout 201 I. The data also contained the name of the SUNPOWER employee that was responsible for these major sales. SUNPOWER is informed and believes, and thereon alleges, that this information allowed LEYDEN to recruit SunPower employees, including [others].

We wrote at the time that this sounded like pretty damning evidence against the individual defendants, but far less clear the degree to which SolarCity was liable, if at all.

SolarCity’s 10K, filed in March, in the section concerning Legal Proceedings, provides the conclusion to this saga:

On February 13, 2012, SunPower Corporation filed an action in the United States District Court for the Northern District of California (Civil Action No. 12-00694). The complaint asserts 12 causes of action against six defendants: SolarCity, Thomas Leyden, [others], although only the following six causes of action are asserted against SolarCity: trade secret misappropriation; conversion; trespass to chattels; interference with prospective business advantage; unfair competition; and statutory unfair competition.

Each of Messrs. Leyden, [others], or the Individual Defendants, are former SunPower employees, and at the time SunPower filed the complaint, each was a SolarCity employee…

In September 2011, we hired Mr. Leyden as our vice president of commercial sales; subsequently, his title was changed to vice president, project development. Mr. Leyden’s employment with us ceased on March 2, 2012.

The parties reached a confidential agreement to settle the action on December 31, 2012, and the lawsuit was dismissed with prejudice on January 28, 2013. The terms and amount of the settlement are not material to the Company’s financial position or results of operation.

(SolarCity 10K, filed March 27, 2013 at 36-37; emphasis added.)

Interestingly, while it is easy to find a SolarCity press release announcing Mr. Leyden’s hiring in September 2011, his subseqent departure - less than three weeks after the SunPower suit was filed - appears to have gone unreported.  As for the lawsuit itself, it dragged on for nine more months - until shortly after SolarCity’s IPO on December 13, 2012.

SolarCity v. The United States

So much for the interesting update.  The far more troubling story appears in today’s Wall Street Journal under the title: Solar Installer Sues for U.S. Grant Funds. While we had written before about how the U.S. Treasury was investigating SolarCity’s accounting practices - particularly as to how it was valuing its leased systems for purpose of claiming federal tax benefits - this was the first that we had heard that SolarCity had filed a suit of its own, claiming that the grant payments that it had received were not big enough!

Wow!  Proof of the old adage that the best defense is a good offense.  Let it never be said that the folks running SolarCity - and their lawyers - are timid.  Confronted with an existential threat to their business model - a well deserved threat in the eyes of some observers - SolarCity is turning the tables and suing to get even more money from the Treasury.

Curiously, there is no press release regarding this lawsuit to be found on the SolarCity website.  But there can be no dispute that the outcome of this suit - as opposed to the hushed-up settlement with SunPower - is material to the Company’s ongoing operations. As we reported last October, in its IPO filing SolarCity acknowledged as much, saying:

If it [i.e., the U.S. Treasury] were successful in asserting this action [i.e., that SolarCity was overstating the value of its systems], we could then be required to pay damages and penalties for any funds received based on such misrepresentations (which, in turn, could require us to make indemnity payments to certain of our fund investors). Such consequences could have a material adverse effect on our business, liquidity, financial condition and prospects.

This means that Monday’s filing of quarterly financial results will have to comment on this litigation and it will be interesting to see if the subsequent investor conference call extracts more information from management.  Should make for an interesting news day.

11/21/12

  07:55:00 am, by Jim Jenal - Founder & CEO   , 326 words  
Categories: All About Solar Power, Ranting, 2011, 2012

Run on Sun Featured at PVTech

Technology reporter Felicity Carus of the (Manchester, UK) Guardian newspaper has a new article up on PVTech that features an extended interview with Run on Sun Founder & CEO, Jim Jenal:

Felicity CarusFor all your CSI data crunching needs, let me introduce readers to Jim Jenal, the founder and Chief Executive of Run on Sun, a small Pasadena-based solar installer … Jenal was a litigation attorney for 13 years after graduating with a BA in mathematics and a masters in computer science. He may not practise the law any longer, but his inner data geek is alive and kicking, particularly when it comes to CSI data, which he has analysed extensively in his blog.

If anyone can point me in the direction of equivalent data analysis for the CSI or other programmes in California’s solar industry, I would love to hear from you.

Carus went on to discuss our results from the Outliers & Oddities posts (which looked at some of the less savory activities in the solar industry) and ended with this quote:

Jenal thinks those in the solar industry should be good citizens. “I actually think that we’re supposed to be different. I understand those who maximise their profits. I understand that it’s much of the way the world works. But I don’t think the solar industry, which is about sustainability, should operate that way. It offends me and my sense of justice.

We would also note that it violates not just our Founder’s sense of justice, but also the Solar Bill of Rights, promulgated by the Solar Energy Industry Association (SEIA), which declares: “ Americans have the right, and should expect, the highest ethical treatment from the solar industry.

We are thankful, on this Thanksgiving eve, for the overwhelming majority of honest, ethical players in the solar industry who collectively do make us “different".  But we still have an obligation to not only behave ethically ourselves, but to call out those few who aren’t.

Happy Thanksgiving, everyone!

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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