Solar

Summary of IBD article of 10/9/15 - Centered around expiring tax credit.

This should be a free link
http://news.investors.com/technology/100815-774636-solar-and…

some members of the conventional electric-power industry argue that the solar companies’ leasing model deliberately distorts customer savings and threatens their business.

S&P Capital analyst Angelo Zino sees solar companies’ revenue rising 30% this year and forecasts that it will rise again by half next year. But then dropping off the cliff in 2017 if no renewal - like in Germany and Italy when their subsidies stopped im 2012.

Like Zino, he predicts pent-up demand in 2015 and 2016 — but, he said, “2017 will probably be off far greater than what forecasts see.”
Smart players, like inverter supplier SolarEdge (NASDAQ:SEDG), will leverage themselves for a strategic market-share grab, Dorsheimer said. SolarEdge’s costs in solar and semiconductors are falling at a greater rate than the potential 30% tax credit cut. The resulting drop in price will make them appealing to consumers and, in turn, investors, Dorsheimer says.

The German government issued a 25% cut to solar subsidies in April 2012 due to overwhelming — and crushing — demand, as noted by Green Tech Media.

German solar demand fell more than 50% after the 2012 subsidy cut, Zino said. Italy was hit harder in September 2012 after its own 10% subsidy cut, Zino said, with solar demand plummeting 60% to 70% over the next year

Some say it’s time for US subsidies to stop and let the market become stable on its own.

Zino sees First Solar and Trina Solar (NYSE:TSL) best weathering the prescribed subsidy cut with feet firmly planted in markets outside the U.S. SolarCity , on the other hand, might be in trouble, Zino said. (Because they are so US centric).

One can imagine a day when battery-storage technology or micro turbines could allow customers to be electric-grid independent," wrote Peter Kind
(a big worry for utilities of course).

The biggest complaint is net metering, mandated in 44 states and likely to lead to what is commonly referred to as a “utility death spiral.”
Net metering requires utilities to purchase excess power from solar customers on a one-to-one basis. But utilities could purchase that same power for a fraction of the price from utility-scale solar plants.
The utilities then pass the added costs on to utility customers — hence the solar savings.
(I personally have a problem with this, they should only have to pay for solar what they pay for the hydrocarbon fuel)

Are those savings misstated? Customers who lease their solar systems often spend almost double the cost of purchasing a system over the course of a 20-year contract, according to a Wall Street Journal article.
(Hmmm, had not heard that)

Solar companies point out that utilities get subsidies too and if you kill one, you should kill them all.

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