Well worth reading the transcript:
http://finance.yahoo.com/news/edited-transcript-sedg-earning…
My summary: Conference call - The average selling price (ASP) constantly falls but they are confident they can continue to reduce the cost of manufacture faster. They are coming out with new advanced products in the fourth quarter, also have built a factory in Mexico and are about to start using it, and are installing a fully automatic assembly line in their plant in Hungary and have ordered two more lines. Each will cut cost 10% and increase quality of the product. They expect to be in EVERY major solar company in the US. The ones they aren’t yet in are testing and evaluating their products already.
Sounds good
Saul
12 Likes
Points raised were: pricing - might the competition be lower?; gross margins; lack of visibility for 2016; ASP erosion - 5-7.5%, later 3-5%.
Subsidies and no pricing power are not my thing at all but I can see the attractions as a punt.
My takeaway from the CC. The solar industry is growing 50% and sedg is growing at almost double that rate.
In 2016 they expect the growth of the solar industry to maintain 50% growth and SEDG to beat that 50% growth.
The whole conference call sounded really positive and I like the CEO from the call.
Keith
2 Likes
And I’d add, like 'em or not, I don’t expect the subsidies to end anytime soon.
Solar is becoming a powerful lobbying force in DC, and to this end, distributed solar is actually creating a potent grassroots base. Every new customer - and happy ones in particular - can be engaged to weigh-in with their decision-makers on policy matters. This in addition to the manufacturing and installation labor force that’s growing exponentially.
And of course, there a number of good public policy-based reasons to continue incentivizing solar.
2 Likes
And I’d add, like 'em or not, I don’t expect the subsidies to end anytime soon.
Solar is becoming a powerful lobbying force in DC, and to this end, distributed solar is actually creating a potent grassroots base. Every new customer - and happy ones in particular - can be engaged to weigh-in with their decision-makers on policy matters. This in addition to the manufacturing and installation labor force that’s growing exponentially.
And of course, there a number of good public policy-based reasons to continue incentivizing solar.
That is all fine and good, but it comes down to political beliefs. Dems definitely want (these) subsidies and Republicans generally don’t - and they control congress. Unless there are Solar plants in Republican districts, they might not have enough leverage to lobby for an extension. Grass roots is nothing. No election will be influenced by people that have already received a subsidy and are “happy”. We got 99 gripes and that’s not one.
So I am still worried about the credits going away (especially while there is an oil glut and cheap NatGas powering electric plants.)
FYI, I might call SolarCity to check my house and make me an offer, so will let you know if I do.
This is not intended to start a political discussion! (Just another factor to consider, don’t care who is good/bad, right/wrong).
2 Likes