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The World's Largest Renewable Energy Developer Could Go Broke (huffingtonpost.com)
An anonymous reader quotes a report from The Huffington Post: There is a "substantial risk" that SunEdison may file for bankruptcy, the world's largest renewable energy developer said in a regulatory filing on Tuesday. The company's fall isn't a referendum on the solar industry as a whole, as much as it is on SunEdison's aggressive growth strategy fueled by excessive debt and financial engineering, analysts say. SunEdison "just thought they were smarter than everyone else," said David Levine, the founder and CEO of Geostellar, a solar energy marketplace that has done deals with the company.
SunEdison loaded up a total of $11 billion in debt to develop or acquire renewable energy projects. The company's shares have fallen steeply since they hit a high of $30 in July. They were at just $1.26 before the filing. The stock immediately dropped another 40 percent when the market opened after the filing, and the company was trading at just $0.59 by Tuesday lunchtime.
SunEdison loaded up a total of $11 billion in debt to develop or acquire renewable energy projects. The company's shares have fallen steeply since they hit a high of $30 in July. They were at just $1.26 before the filing. The stock immediately dropped another 40 percent when the market opened after the filing, and the company was trading at just $0.59 by Tuesday lunchtime.
Certainly not the one that supposedly built America's middle class, the automotive industry.
Well, except for the ~500 listed at https://en.wikipedia.org/wiki/....
But apart from those few, not at all.
Pain is merely failure leaving the body
You have an aggressive growth plan, capitalized by debt that makes sense when your model is backed by subsidies.
Your debt starts to become due, but when you go to refinance it and there's some question as to whether the subsidies will continue (or its known for sure they will end), they crunch your numbers and find out that your entire business model is basically built on subsidies, and without them you are not at all profitable.
It turn out that in order to install solar panels and make any money doing it, not only do you need a huge subsidy for every install, you need the power company to pay retail rates for reverse metering for the next 20 years, too.
Once the subsidies go away and the power company only has to pay wholesale rates for reverse metering, well, solar power isn't really profitable at all unless the "profit" includes Excel-crashing giant models that suppose some kind of society-wide savings from improved environmental conditions and third order savings calculated on sheets 87, 88, and 89 of your model.
Without subsidies my panels would have a nearly thirty year return on investment. The ones I installed about ten years ago are already putting out less than half of the power they originally did so they'll never pay off.
You kidding?
Tax breaks paid for 60% of my solar system. The only way it made economic sense.
Never answer an anonymous letter. - Yogi Berra
Fossil fuels receive $5.3 Trillion in subsidies annually.
Subsidies for fossil fuels amount to $1,000 a year for every citizen living in the G20 group of the world’s leading economies, despite the group’s pledge in 2009 to phase out support for coal, oil and gas.
https://www.imf.org/external/p...
I don't read your sig. Why are you reading mine?
What "largest solar install"? Setting aside the fact that Ivanpah, which you mention, has nothing to do with photovoltaics, being the topic here, the current "largest solar install" is the Longyangxia Dam Solar Park in China.
Ezekiel 23:20
What are you calling subsidies for fossil fuels? Have you actually looked at the taxes paid by fossil fuels? Have you ever looked to see how much of what you pay at the pump goes to taxes (chances are pretty good that it is posted on/near the pump, actually).
Oil companies don't really get any special subsidies. They pay taxes on profit, not income, just like every other business. They closes thing they get to a subsidy is what the government buys from them for their own use, for the reserve, and what they give out to poor people to heat. Which of those subsidies would you like to see taken away?
And before you say externalities, I again encourage you to look at the taxes paid by the fossil fuel companies. It's not their fault that your government spends the money on bombers instead of cleaning up the environment.
Disclosure: I do own shares in a variety of petrol companies as well as shares in renewable energy companies. My home is powered by solar and wind. It does have a mains connection but I generate more than I use so it's there more as a backup than anything else. I push almost twice as much as I use into the grid - at the peak point of the year. The house is passive solar so I don't need to really use AC or even much heat.
"So long and thanks for all the fish."
Last I heard (2013), oil companies were getting on the order of $5.1 billion in subsidies for exploration. https://newrepublic.com/articl...
Categorization of oil under the tax code as a form of domestic manufacturing eligible for a 6% deduction of net income, claiming foreign royalty payments as a credit against American taxes, and deducting numerous costs associated with the drilling process is absolutely an insane handout that other energy suppliers are excluded from. http://www.cnn.com/2012/03/29/...
By comparison, research and development for solar energy was given only $302 million; and wind energy just $123 million. http://www.reuters.com/article...
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
Yes because those are the only renewable energy companies to take tax dollars and fail or are failing.
Signed
Evergreen Solar ($25 million)
SpectraWatt ($500,000)
Solyndra ($535 million)
Beacon Power ($43 million)
Nevada Geothermal ($98.5 million)
SunPower ($1.2 billion)
First Solar ($1.46 billion)
Babcock and Brown ($178 million)
EnerDel’s subsidiary Ener1 ($118.5 million)
Amonix ($5.9 million)
Fisker Automotive ($529 million)
Abound Solar ($400 million)
A123 Systems ($279 million)
Willard and Kelsey Solar Group ($700,981)
Johnson Controls ($299 million)
Schneider Electric ($86 million)
Brightsource ($1.6 billion)
ECOtality ($126.2 million)
Raser Technologies ($33 million)
Energy Conversion Devices ($13.3 million)
Mountain Plaza, Inc. ($2 million)
Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)
Range Fuels ($80 million)
Thompson River Power ($6.5 million)
Stirling Energy Systems ($7 million)
Azure Dynamics ($5.4 million)
GreenVolts ($500,000)
Vestas ($50 million)
LG Chem’s subsidiary Compact Power ($151 million)
Nordic Windpower ($16 million)
Navistar ($39 million)
Satcon ($3 million)
Konarka Technologies Inc. ($20 million)
Mascoma Corp. ($100 million)
That article, or summary really, is based on a report from an advocacy group which is frankly lying to you.
The largest component that they are calling a "subsidy" is when a government owns a profitable energy company, so the government is getting paid. Their primary example is one making very healthly 14% return on investment . When the government is making a lot of money from a socialized company, that's kinda the opposite of subsidy.
In the US, their top two "subsidies" are that oil companies use the exact same correct accounting as every other company, recording revenue and costs of that revenue in the same period. (Called Generally Accepted Accounting Principles) . Your advocacy group, Oil Change International, breaks that down into two components. First, amortization of capital investment. Suppose your business has $2 million on Monday, and no other assets, so it's worth $2 million. On Tuesday, you buy a $1 million oil rig, which is producing as expected. So now you have $1 million cash plus a $1 million oil rig. How has the total value of the business changed? It hasn't. You still have $2 million worth of stuff. Buying an asset that will last a long time isn't the same as throwing money away, so you don't deduct the $1 million cost all in one year. Fast forward 10 years. The oil rig equipment is getting old and worn out. You could sell it for $200,000. You still have the same $1 million cash, plus you have an oil rig that's now worth $200,000. You didn't make any money selling oil, so all the company has is $1 million cash and $200,000 worth of equipment. How much is the business worth now? It's worth $1.2 million, $800,000 less than before. That's amortization- recognizing that equipment gets less valuable as it gets old and worn out, so you spread the cost over the useful life of the asset.
You WANT companies to correctly amortize the assets on their books. If they don't, they are LYING to investors, primarily people who are saving for retirement. When they don't amortize costs correctly you get Enron.
Depletion is the same thing, but for assets that "run out" rather than "wear out". Suppose you start with $100 million. Your company has $100 million cash and nothing else, so it's worth $100 million. You spend that $100 million dollars to set up operations on an oil field which has ten years worth of oil underground. Now how much is the company worth? Still $100 million, because it owns the $100 oil field operation. Go forward five years. You've used up half the oil. How much is the oil field worth now? Half the oil is gone, so it's worth half as much. That's depletion. That's correct, standard accounting in any industry; most industries call it "inventory". There's no subsidy there, simply correctly writing down what things are actually worth, then paying taxes based on those correct numbers.
Thats a very wide definition of "renewable energy company" (Navistar: truck manufacturer, Babcock & Brown: financial consultants, Thompson River Power: trying to liquidate their new coal plant) and "failure" (Vestas: 685M Euro income in 2015, Amonix: Just broke a record for PV energy output).
I didn't look through all of them but I'm guessing you just copy pasted a list of DOE energy loans from some blog. Feel free to prove me wrong by doing your own research and posting an up to date summary of each of your listed company's current outlooks.
But they do. My state levies a significant tax on minerals extracted and puts the money in a wealth fund. Yes, yes, they DO pay for mineral extractions.