SolarCity Leaves Nevada, SunPower Expands
SunPower Corp has announced that the 15-megawatt solar powered plant is now completed. This will for sure kick up some sand into the face of SolarCity. SunPower has announced that the new power plant with me the NV Energy, SolarCity’s competitor.
SunPower has taken a stand with NV Energy. Which it invoked the Nevada Public Utilities Commission in the press release. Regulators have also placed residential rule for solar. This has caused a major installer to leave the state. By understanding how SunPower could be a friend of the NRV Energy and also the Nevada PUC, all the while SolarCity who is a villain took a deeper look in the solar industry.
Is solar a friend or foe for utilities?
One thing that you must understand first is, how do those utilities and regulators look at solar energy. For this most part, they are definitely not against it but may be against the way it is compensated and installed.
Solar customers just pay for the net energy that they use for a month. This is the traditional net metering rules. This means if they make extra energy by their solar panels on the rooftop, and send it to the grid, then they are going to get compensated for their full retail rate. By the EIA, that rate was just $0.127 per kWh for the resident of Nevada in November 2015.
Whenever a residential company comes to a state like Nevada and sell energy for less than that of the utility’s rate, will then say that the cost difference is savings for the customer. This will give the customer the choice and freedom away from a utility. This is also dependent on the customer getting that credit of the full $0.127 per kWh or close to it. The issue with the PUC’s choice in December to compensate homeowners at the wholesale rate: rejected those savings for customers.
Looking at the scenario from the viewpoint of the utility and the regulator. SolarCity is currently trying to come and steal electricity demand also if it gains more than enough market share it can make it harder to take over the grid. This is because fewer people need energy during the day as it is sunny and then when it is night as the sun goes down. It will need to give what the energy customers want.
A regulator’s view it that seeing customers who buy energy from SolarCity and other rooftop solar companies pay $0.11-$0.12 per kWh for solar as it can facilitate large utility-scale projects that are less than $0.05 per kWh. With that curve, problems could be rising and the dispute of rooftop solar transfers costs to non-solar customers. You should see why a utility would buy inexpensive utility solar instead of having the customer set up their own solar.
Working with Utilities
The self-motivated can create an argumentative condition within rooftop solar companies and utilities. The usual differences are sorted out and the state tries to come up with reasonable ways to reimburse rooftop solar.
This brings up a very different relationship between SunPower, who is the PUC and NV Energy. Instead of taking customers away from the utility. SunPower is currently building large solar companies that can give clean solar energy and is built at a highly competitive price that all three of them can agree on. This will make SunPower a partner with PUC and the utility instead of enemies.
This is an impact that is pretty big from the partnership. SolarCity has stated that it has lost almost 20 megawatts per quarter in demand from closing its business in the state of Nevada. When the company announced that the 15-megawatt solar system that was built at Nellis Air Force Base. SunPower had said that it has followed the 13.2-megawatt system that was built at the base in the year 2007. SunPower also has built the 100 megawatts Boulder Solar I project while purchasing the agreement for the 50 megawatts Boulder Solar II project too. The projects will have to sell the energy to NV Energy and have all been approved by Nevada PUC.
The Business Model and The Relationships with Occupants Matter
There is no question that the solar industry is every so changing the electricity industry that we know. Understanding how those companies work to revolutionize this industry is important just like realizing who the people working are. The Nevada residential solar business took a confrontational role against the PUC and the NV Energy and them, of course, lost it.
On the other hand, SunPower took a tactic of the corporation with both of the parties. This leads to very large contracts that are expected to help drive the company’s wealth in 2016 and after. Right now this is the clear winning plan.
Well Something Big Has Just Happened
Well, I do not know about you, but I constantly check out when one the biggest growth investor in the world hands over a stock tip. The Motley Fool co-founder, David Gardner, and brother, Motley Fool CEO Tom Gardner, has just recently talked and two brand new stock recommendations. They have more than tripled the stock market’s return over the last 13 years. We all know that timing is not what matters but the history of these brother’s stock picks. Which easily shows that pays off to jump on their ideas early.