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- Yesterday
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Agree on the short-term. Long-term it's been a poor investment the past 10 years. This has caused many to give up the idea that best of sector stocks can be good long-term (over say 30 years) investments at all. At least it is unlikely that with the past 10 years included that the best of sector names will be consider good stock investments 20 years from now on a risk-adjusted basis. The past can't be changed but I still haven't given up on them being good long-term investments starting here. Unfortunately the best long-term CN options is being taken private.
- Last week
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I saw Gordo do a 180 recently, he is a piece of work. Although finally agree with him at least somewhat on his call. At these levels it would be stupid to short sector with the surprised surge in spot prices. Long term I'm very cautious but short term I think sector is set up for a great trade on long side.
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I expected the confirmation to come the coming week when ASPs are published on pvinsights on Wednesday, but it seems we can be quite sure about the green light on Wednesday. Gordo turned bullish already and he usually needs a screaming big green light to turn positive on the sector. The mid 2017 deadline before China FiT cut is expected to cause a demand surge..
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Explo has their been any confirmation before the article I posted that module prices have begun spiking? We have seen poly, cell, and wafer pop before without without follow through to modules actually happening. I got back into sector for trade in anticipation of this flowing into modules but wasn't positive it would actually happen. Confirmation of modules spiking should be great news (atleast short term) for sector. Even though there has been a strong reversal in sector recently I don't see any reason why it wouldn't continue in the short term to reflect surprising reversal of spot prices... especially at current price levels of sector.
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LOL. Pop enters and headlines talk about spiking modules prices. Fasten your seatbelts folks.
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"Prices of China-Made PV Modules Spike Following Price Raise in Mid- and Upstream Sectors: Price Trend" http://pv.energytrend.com/price/Prices_of_China_Made_PV_Modules_Spike_Following_Price_Raise_in_Mid_and_Upstream_Sectors.html Looking at recent articles over past week highlighting price rebounds, this seems to be first article to actually say module pricing has just begun to spike. Actual confirmation that the price surge has hit module pricing is great news. This article came out after market close last night.
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Matt, I don't remember exactly, but I think Jinko invested close to 200m in Jinko Power equity and now they get 250m from that equity investment (for those who want to know more precisely the potential one-time profit to be reported should dig up the exact details about how much equity Jinko put into Power). This is absolutely not what I hoped for. I was hoping they could instead redeem the partner shares and take full ownership over the 1.1 GW fleet.
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In response to the above notes, according to JKS in their Q2 presentation deck, their cost to manufacture is .37 / watt. .06 / watt of that is the raw material cost that was also dropping in a similar way to the cost of modules coming down. (about 27% YTD?) I'm repeating numbers from Credit Suisse's "this week in solar" notes. Schwab gives me free access. I'm getting stated with solar stocks. A little late to the game! Hoping to cash in on my love for the planet. Curious what you all think about JK Solars decision to sell off its power unit: http://www.prnewswire.com/news-releases/jinkosolar-enters-into-definitive-agreement-for-the-sale-of-jinko-power-downstream-business-in-china-300342490.html Looks like they sold off about 1.1GW for $250 million + (I assume) the obligations to their debt of about a billion. Not sure where those numbers came from -- but I think thats right. So my question: Is $1250 million for 1.1GW a good or poor price? A move of desperation or calculation? Too bad this deal happened too late for Q3 it seems? Cheers- Matt
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One can only hope voters actually READ what they're being asked to vote on. Here in Colorado, we've got a 2-page ballot with a plethora of constitutional amendments (the Colorado state constitution is one of the easiest to amend--indeed, making it harder to do that is one of our proposed amendments!), a half-page long list of Presidential candidates from parties no one's ever heard of, plus a whole slew of top- and mid-level judges whom voters can decide to dump from the bench for lousy job performance--IF they actually bother to read the hefty pamphlet describing all their choices. I started last week, and I'm still not done. I'm not all that sanguine there'll be a lot of informed choices made this year. Perhaps there is something to this fear of the "tyranny of the masses" after all (chuckle)....
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Gotta break through this sort of nonsense. http://www.rechargenews.com/solar/1447190/leaked-audio-shines-light-on-floridas-rooftop-solar-fight
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Is SolarCity's Buffalo Solar Plant a Failure? Tesla Thinks So http://www.fool.com/investing/2016/10/17/is-solarcitys-buffalo-solar-plant-a-failure-tesla.aspx Well, did anyone familiar with the industry (I guess Musk wasn't) really think a cost competive 1 GW fab could be erected from nowhere in a high cost country? Looks like high-tech Panasonic (similar to SPWR, i.e. super high conversion efficiency allows higher cost) stuff will have to fill the space.
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Based on the Brazil deal and land sale I can see CSIQ adding $260M in revenue including the China's plant sale to Q4. Q4 could be close to $1B in sales, thy would get their revenue figures based what is expected for Q3. So, on revenue they are matching, only GM is a guess, of course 2017 i a big unknown.
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following up on the land sale a bit more details Highlights of the transaction: The land acquired by the Partnership consists of six renewable power generation tenant sites within four utility-scale solar PV projects developed by Recurrent Energy; and The portfolio features (i) an average remaining lease term of approximately 34 years (including renewal options); and (ii) rental income derived from utility-scale solar PV projects holding long-term power purchase agreements (“PPAs”) with tenures of 15 to 20 years from high-quality utility off-takers including Pacific Gas & Electric (“PG&E”) and Southern California Edison (“SCE”).
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Connor, Clark & Lunn Infrastructure (CCLI) and Samsung Renewable Energy secured C$633m ($482m) in bond financing for Canada’s largest standalone solar plant, the 100MW(ac) Kingston in Ontario, allowing them to refinance their existing bank debt and swap facilities. The two firms did not reveal further details of the huge bond financing – among the largest ever for a renewables asset in Canada – but said they had attracted support from a “broad base of Canadian and US investors”. CCLI, part of Toronto-based asset manager Connor, Clark & Lunn Financial Group, has been a regular partner of Samsung at its solar projects in the province. The Kingston project was commissioned in September 2015, and used substantial amounts of locally-manufactured equipment, per Samsung’s sweeping renewables agreement with the province of Ontario struck in 2010. Canadian Solar, based in Guelph, Ontario, handled EPC work at Kingston and supplied nearly half a million of its locally made 72-cell MaxPower modules. Meanwhile, Germany’s SMA supplied 125 of its Sunny Central 800CP-US central inverters made at its factory near Toronto, and will stay on to maintain the project for the next decade. Through its controversial deal with Ontario – revised in 2013 – Samsung Renewable Energy has been responsible for many of the largest wind and solar projects in the province, including the Grand River project, which combines 150MW of wind and 100MW of solar. Samsung has said it is now contemplating investments in western Canada. I mentioned before that CSIQ hired a VP for WC. I see no activity in Alberta yet, but with Samsung coming on line, and Suncor already teaming up with CSIQ, Canadian seems to set itself for more work in the country.
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I think the problem lies in the high potential that may be coming, as there are to many who like to participiate and it's too easy to enter this market and build up some capacity now. There is simply not enough differentiaton in this Market.
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Yes, I've seen references to small-scale farmers leasing their land for solar PV projects in Germany (yes, cloudy Germany!), which is a win-win for the farmers (they can still use the land underneath the panels as long as such use doesn't interfere with the panels' operation, and it provides a long-term, stable and therefore predictable income stream). So I agree it makes sense for a landowner who currently does NOT use the land for PV purposes to enter into such a lease. I'm less sanguine about the business case for a company that ALREADY owns and uses the land for PV purposes to sell it, then lease it back. There it becomes a question of which is greater: the total cost of the lease (over its entire life) vs. the sale price of the land and any profits that can be generated from the cash proceeds of the sale over that same time span.
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It's articles like this that make investing in solar so frustrating--even public officials (not just environmentalists) are coming to realize solar's potential, yet the companies in the sector continue to struggle.
- Earlier
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A piece on floating solar: http://www.cnbc.com/2016/10/14/floating-solar-arrays-point-to-bright-future-for-clean-energy.html
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Thanks SCSolar
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Here is a link on discussions of small scale land lease for solar farms. This is anywhere between $1500 and $3,000 an acre per year. I live in a rural community with landowners having acreage and have received flyers quoting $2,000 per acre for 30 year leases looking for 30+ acres near major distribution centers. Cleared land in my area sells for $10,000-$15,000 per acre. https://www.reddit.com/r/RenewableEnergy/comments/1g9kgq/my_farm_was_approached_by_a_solar_power_company/?st=iu8s0ul0&sh=126f6d5a The purchase price from the earlier link is $18,250 per acre. A 10% return places the lease at $1825/acre. The total lease per MW based on 5 acre installation is $9125 per year. Depending on insolation, which for the areas of project are quite good, this would run about $0.005/Kwhr generated. Selling the land to free up $73M in cash is a good decisions imho.
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It certainly shows CSIQ has a way to monetize the assets and create cash. Selling 80% of the project in Brazil, selling now the land and getting Japanese project financing makes a good preparation for low margin module sales. Good price recovery but selling is the method not buying. In the meantime pegi is acting as a dog. Now finding positive in dividend payment at the end of the month Sent from my HTC One_M8 using Tapatalk
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OK, I think I get it now. Recurrent sells the land to get cash now, then pays a yearly lease. Hmm. My guess is the total lease payments will be more than what they got for the land up front (otherwise what's in it for the buyer?), so this points to Recurrent needing cash--maybe a warning sign (they can't meet current obligations), maybe not (they want the cash for further expansion). And CSIQ owns Recurrent, so it affects them to some degree. As I said, hmm....
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Yes they are giving up some of the cash flow from the project instead of all as is done when the whole project is sold. Now they only sold the land part of it.
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My understanding is that the land "user" owned and sold the land and will now pay lease instead thus creating a cash outflow of $73m year 0 and cash inflow from the lease the coming 34 year for the buyer of the land and vice versa for the seller, i.e. cash inflow of $73m year 0 and a in total bigger cash outflow for the lease distributed over 34 years. The seller divests to release cash the buyer does the opposite.
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I think they have sold part of the cash flow as well, maybe all Sent from my HTC One_M8 using Tapatalk
