Tom Shepstone
Natural Gas NOW
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SolarCity, the star feature of Andrew Cuomo’s “Buffalo Billion” program to revitalize Upstate New York by picking a winner and subsidizing it is fading fast.
Andrew Cuomo has poured a ton of taxpayer money into SolarCity and has even given Elon Musk a “Get Out of Jail Free” card to avoid payback obligations in the event it fails to deliver promised jobs. Part of the governor’s “Buffalo Billion” initiative, which has descended into the morass of corruption surrounding Cuomo, the SolarCity project has turned out to be one of Elon Musk’s biggest scams and it’s only going bad at an ever faster rate. Andy can’t subsidize solar farms and installations fast enough to save it, as Elon puts his mind to work figuring out what excuse he’ll make for stiffing the Emperor of the Empire State.
Gov. Andrew Cuomo and then SolarCity CEO Lyndon Rive (Elon Musk’s cousin) during happier times at the announcement of the heavily subsidized SolarCity facility in Buffalo, NY on September 23, 2014
The latest news regarding SolarCity, in fact, suggests Elon regrets saving his cousins’ behinds and is now burying the skunk in hopes of moving on. Here’s the scoop from The Motley Fool (emphasis added):
Since Tesla’s $2.6 billion bailout of SolarCity later that year, things have been a lot rougher. Tesla fired hundreds, maybe thousands, of sales staff and installation crews that were key to SolarCity’s strategy. The plan to move solar into the Tesla showroom hasn’t been very fruitful, and there doesn’t seem to be an easy home in the Tesla family for plain old residential solar sales. According to the recently released fourth-quarter results, Tesla only installed 87 MW of solar, an astonishing decline for such a large acquisition and another sign that solar may be slowly dying at Tesla.
The 57% decline in installations over the past six quarters isn’t surprising when you consider that Tesla undermined most of SolarCity’s business. Most solar systems were sold via door-to-door sales, something Tesla began de-emphasizing almost immediately. Combined with the shift from leases to loans, the changing business model naturally lost momentum.
But Tesla would rather not have a dying solar business, because it has a major manufacturing facility being built in Buffalo, New York and the Powerwall to sell. Solar customers could become energy storage customers, and ultimately EV customers.
To try to get back in the game, Tesla is rolling out booths in 800 Home Depots and considering a similar deal with Lowe’s. This may give Tesla more face time with customers, but booths in retail stores haven’t been a driver of solar sales traditionally, and Tesla may have a hard time translating the booths into long-term sales growth.
Overshadowing the decline in solar is Tesla’s production problems with the Model 3. The product has been delayed by at least two quarters, and if delays continue it won’t matter what happens in the solar business because Tesla will burn through billions in cash.
Tesla is also working on a semi, solar roof, Model Y, a pickup, and the next generation Roadster. It’s no wonder the company has lost sight of the traditional solar market. It’s just not important compared to these other products.
The lack of a large solar business could pose a big problem for energy storage. Tesla could have had captive demand for the Powerwall within SolarCity, but instead it’ll have to look outside to sell the residential energy storage product. And that will mean entering a commodity battery market, not ideal for making money.
Tesla also doesn’t disclose how much money the floundering solar business is burning through today. Given the decline in installations and the high overhead Tesla acquired from SolarCity, there’s not much of a chance solar is positive to Tesla’s cash flow or bottom line, making it a distraction the company doesn’t need today.
This news is yet another indicator Andy, by picking winners, rejecting natural gas development and saying no to pipelines, has picked a very big loser. He chose poorly.
I know so many families that have left NY that would have stayed if allowed to harvest the rights to their natural gas and I am only one. Taxes soar on owning property and Cuomo his self told reporters questioning him on the mass exodus of NYers to other states simply replied, “those left will have to pick up the tax burden” how can democrats back this corrupt politician any further?
The only hope for us landowners, is a takings Lawsuit, which will be years away, and may never come to fruition, ill probably leave for a free state when i retire, which is 10 years out. as long as the Regressive Liberals keep a Dimocrap in the Governors office, all is lost.
Here is the irony, we have to burn something to make the electricity for the cars, or destroy the wild and scenic rivers of Canada for hydropower. Six one way, half dozen the other. By the way, that impounding of all that water behind the Canadian Dams, increases evaporation, thereby increasing water vapor in the air. H2O actually has a greater green house effect than CO2. Not to mention the loss of carbon sequestration caused by the drowning of an entire ecosystem under the giant lakes behind the dams. Oh and don’t forget the deciduous forests that were destroyed by the impounded water, also took H2O out of the air as well as CO2. Is it a surprise to any logical thinking person that every source of energy has an environmental impact? The surprise is that we never hear about it.
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