The Merger Is Complete, Tesla Owns SolarCity

 The deal is done. Tesla has officially acquired SolarCity. After months of speculation, Wall Street questions and doubts that this day would come, it is done. SolarCity will stop trading and the ticker symbol SCTY is gone, delisted from the exchange.

No more information about the integration has been released except for the $150 million efficiencies that would be created by combining the companies. So expect some job cuts and introduction of the solar system sales to the hundreds of Tesla stores around the Country.

Consumers will be able to get their solar, stationary storage and moving storage (the car) in a single place without putting any money down.


Vivint Solar Raises $200million in Tax Equity, Installs 59MW in Q3


 By Yann Brandt; Vivint Solar announced today that it has raised $200 million in new tax equity, a day before announcing it’s 3rd quarter financial results. The $200 million were critical given the delay the company was having in raising new tax equity after a failed acquisition by Sunedison. Vivint Solar even went out of its way to negotiate a new compensation deal with Thomas Plagemann, the EVP of Capital Markets. Plagemann is entitled to 0.15% of tax equity raised as part of the bonus compensation. The $200 million will go a long way to and help finance 123MW for an estimated $480 million of system values.

In the 3rd quarter, Vivint Solar announced that it had booked and installed 59MW. The 59MW came from 8,266 systems for a cumulative amount of 93,138. The average system size was 7.1kW but the total installed amount was a 2MW decrease from the same quarter last year. You can likely blame the focus on the acquisition on the decreased sales and marketing efforts.

The quarter showed signs of improvements. The total system costs decreased to $2.85/watt from $2.94/watt last quarter and $3.12/watt in Q32015. Sales and marketing costs came in at $0.55/watt in the quarter in line with average costs over the past 10 quarters. The $0.55/watt is significantly lowed than competitor SolarCity, which disclosed sales and marketing costs of $0.71/watt in Q2 of this year. SolarCity will release financial information on November 9th after market close.

In other financial data, Vivint Solar estimated that retained value per share was $5.97 per share which reflects an almost 100% premium over its current trade price of $3.05 per share. The current contracts have remaining payment obligations of $2.48 billion which is pre-debt payments so the cost of capital on those non-recourse loans are quire important.

Q3 Presentation


Q3 Financials


Q3 Cost per Watt Methodology


Solar Asset Management: 4 Best Practices From The Experts

By Richard Matsui

mainpic-solarWith the notable exception of Intersolar North America, it’s surprisingly rare for a major solar conference to be held here in San Francisco. So when Solarplaza extended an invitation for us to speak at its 2nd annual Solar Asset Management conference here in the city, we leapt at the opportunity.

I joined fellow panelists Kent Williams (VP of Asset Management, Vivint Solar), Jimmy Bergeron (Director of O&M, SolarCity), and Matt Golden (Senior Consultant, IBTS) for a discussion entitled, “Challenges in effective management of small scale portfolios.”

4 Asset Management Best Practices From The Experts

Measure twice, cut once: With small scale portfolios, it is especially important to build systems right the first time. Why? The cost of a single truck roll to solve an O&M issue can wipe out years of electricity value that the system is generating. Therefore, the most cost-effective solution to O&M is to ensure that O&M is not needed in the first place, by ensuring your installers are building high-quality systems with high-quality equipment from the start.

You need to examine the tails: While our industry often describes portfolio performance in terms of its average (e.g. “my portfolio is at 103% of expectations), there is a wealth of insight hiding in the anomalies, the “tails”–especially when looking at portfolios that run into the hundreds or thousands of systems. Even with a “103%” portfolio, it’s your customers on the left tail of the portfolio distribution who are not giving you referrals and leaving you negative Yelp reviews.

Be disciplined with data collection: Jimmy Bergeron showed an impressive chart of 75+ O&M issues that SolarCity deals with, in order of frequency. Generating this chart requires that SolarCity classify every single O&M case it has ever handled–that is a painstaking investment for any developer. But it pays off richly: SolarCity has tremendous insight into what factors cause O&M problems. That insight is fed into the organization’s operations as learning, thus completing a feedback loop–which brings us to our last best practice.

Adopt a learning mentality: Even as our industry scrambles to service solar portfolios that are doubling in size every year, it is critical for asset managers to see the forest through the trees. After the session, one asset manager drew an analogy to medicine: “Today, a lot of O&M issue handling is really about treating symptoms, but we are not yet curing the underlying disease. In order to cure the disease, we must learn about what these symptoms share in common.” For instance, beyond simply fixing problematic systems as they arise, identifying underlying trends to learn that Installer X is systematically causing these problems will enable you to take corrective action up front.

kWh Analytics is helping our industry to “cure the disease.” We enable solar investors and asset managers to take control of their risk management and reporting through a web-based portfolio management platform. The platform delivers risk insights from 40,000+ PV systems, representing the industry’s largest independent database of operating solar assets. The firm’s clients include several of the leading solar originators and financial institutions.