By Darren Smith, Weekend Contributor
The mysterious ways of a familiar high school institution, the Tesla Coil, once again has conjured another spectacle. A Salem, Oregon high school teacher was charged with the shocking crime of Criminal Mistreatment after allegedly employing the coil to burn sweet nothings into the arms of students
After an investigation, Salem Police arrested Samuel Dufner for the alleged crime at South Salem High School.
A Tesla Coil is an electrical device, specifically an electrical resonant transformer circuit invented by Nikola Tesla in 1891. It produces high voltage, low current and high frequency alternating current electricity.
Salem Police reports allege that during a class demonstration of the coil, Dufner stated the arcs from the coil could also mark the skin. After asking for volunteers he then demonstrated this by zapping the words “I Love You Mom” along with a heart into their skin.
After the event a parent complained to police who thereafter began an investigation culminating with Mr. Dufner’s arrest. Lt. Birr of the Salem Police stated the burn marks began fading and several days later were almost gone.
Mr. Dufner posted a $2,000 bond. He remains on leave from the school.
By Darren Smith
Source: KOMO News
The views expressed in this posting are the author’s alone and not those of the blog, the host, or other weekend bloggers. As an open forum, weekend bloggers post independently without pre-approval or review. Content and any displays or art are solely their decision and responsibility.
Just to be clear. I believe every industry should be responsible for the contents and process of their products from cradle to grave. That includes the solar industry, the fracking industry, oil, coal, wind, automotive and everyone else.
The notion that your business has a “right” to dump your waste in my back yard, either literally or figuratively, is insane.
Having said all that, I am quite certain that if you stand the solar industry side by side with any of the carbon-based energy producers, solar beats them walking away. In part because no one has figured out effective carbon sequestration for the smokestacks, but also because the point source recovery for reprocessing everything from batteries to solar panels is not only do-able, it is smart.
And the notion that one can compare a mother exhaling to the millions of tons of carbon belched out of a smokestack is insultingly stupid. But thanks for playing.
“The natural CO2 flux to and from oceans and land plants amounts to approximately 210 gigatons of carbon annually. Man currently causes about 8 gigatons of carbon to be injected into the atmosphere, about 4% of the natural annual flux. There are estimates that about half of man’s emissions are taken up by nature.”
Ed Caryl
_____
PT,
I appreciate your ambition as you attempt to start a new religion. At least you’re not the typical sedentary, liberal parasite attached to the taxpayer.
“The truth will out.”
No one knows the history of solar panels or storage batteries because there is no history. Your delusion that there is no environmental impact to mining for base components, production processes and for panel and battery waste disposal is absolutely and irrefutably wrong to a greater or lesser degree. This planet has dealt with the repercussions of only small battery use for the past 100 years. In coming decades, it will have to suffer an explosion of mining, production, use and waste disposal of an exponentially larger number of batteries of substantially larger dimensions and intractability.
Oh yeah. No adverse environmental impact there. No “chemicals” there.
Maybe your perspective helps us juxtapose academics and industry – classroom speculation with real life accomplishment.
God made mothers breath CO2 in babies’ faces. That’s odd.
I prefer Chemistry professor demos. Acids, bases, PH balance and liquid nitrogen scientific experiments. How to freeze and destroy a student’s laptop video.
Don’t know nuthin bout birthin babies.
The one and only reason that oil, coal, and gas are even remotely competitive with solar, wind and hydro, is that we have allowed the industry to “socialize” the disposal of their waste. We allow them to dump coal ash, pump CO2 and other gases into the air, dispose of toxic fracking chemicals by pumping them into the ground and so on. If they had to account for the entire life cycle of their “products” the prices would skyrocket and they would all go out of business.
And before you start arguing that solar and wind have the same hidden costs: don’t bother. It’s not even close. And if you don’t know that, you don’t know nothin.
Tyger, Particularly considering this guy is a science teacher, a subject this country has turned third world like in teaching.
TG,
“Tesla Burn” –
the message, I hope no one missed it, is that sales of these long-term contracts for roof-top solar electricity very well may be a SCAM.
Huge utilities, politicians, consumers and shareholders will not stand idly by and let electricity utilities be destroyed, especially when the state-regulated monopoly electricity utilities capture substantial economies-of-scale and are mutually beneficial for all people.
When big utilities stop giving money away in rebates and net metering rates are lowered and base line fees are paid by rooftoppers for stand-by and grid maintenance, solar contracts will become toxic and the fools who signed them will be saying “shame on you, Solar City.”
Figure it out. Low-doc and no-doc loans financed houses for low-income consumers that could not afford them. Many Rooftop contracts are the same sub-prime loans and the contractees will default.
If only there were more teachers who were creative and resourceful at getting their students interested and involved in the subject of their classes. Kids would learn more and remember it longer.
At least the teacher was not malicious like Professor Umbridge.
Wow, whoeveryouare, I can easily say you are someone who is more vociferous than I am! Amazing. And with so much to say that even I am unwilling to read through it all, especially after the statement that starts out “Another person burned by Tesla,” and continues with “A mutual arrangement requires a monopoly and compelled participation for the benefit of all like roads, water systems, sewer lines . . . .” Bullspit. No one is forced to use these systems, but they are more economical and convenient than the alternatives. Having a personal solar installation to generate electricity may make sense and be cheaper than buying it from the local electric monopoly. Citizens being forced by the US Government to buy health insurance that provides less care and coverage at higher rates than can be obtained elsewhere is an example of the egregious laws and tyrannical regulations that are encroaching on the freedoms and privacy of everyone and turning the country into a true Obamanation. Those are socialistic concepts that should be avoided and forgotten. I acknowledge you are entitled to your opinions, but an example of rationality they are not, and I’m not inclined believe the opinions of an amnesiac, anyway.
We forget who ya are: We dogs live on boats at a marina. My boat has solar panels and LED lights and other efficient electrical devices. We are “off the grid” and have no power hook-up, except a 110 line that we use to power a fridge/freezer. We do not get an electric bill because that line happens to be a dock socket and is free.
In another ten years or so a lot of Americans will be living with their own solar systems to power their homes.
Bye, bye, Miss American Pie, drove my Chevy to the levy, but the levee was dry. Good ol boys drinking whiskey and rye, singing this will be the day that I die.
Go kiss the Koch Brothers arse and forget about it.
((I deeply apologize for this extended post but rationality has got to be introduced into what’s left of coherent America. BTW, are you referring to ABIOTIC oil when you use the “fossil fuels” reference out of the enviro-wacko radical’s lexicon? Perhaps you could produce the missing link from “fossils” to oil – some are pretty deep))
A MUST READ FOR BARNUM’S “SUCKERS:”
10 Reasons Why SolarCity, Vivint Solar, And RGS Energy Are Destined To Fail
Oct. 6, 2014 5:25 AM ET | 115 comments | About: Vivint Solar (VSLR), SCTY, Includes: RGSE
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…)
Summary
•Solar installation business plans that assume utilities do not compete.
•We do not believe the collection/enforcement mechanisms will work as planned.
•To enhance shareholder wealth, we believe the these companies need to fundamentally restructure their lease/PPA products.
In the past we have written about the industry trends in solar energy and how the lease/PPA dynamics impact publicly traded residential solar installers SolarCity (NASDAQ:SCTY), Vivint Solar (NYSE:VSLR), and RGS Energy (NASDAQ:RGSE). In this article, we look at several factors which will contribute to catastrophic lease/PPAs failures at companies that rely on these instruments.
Utilities Will Move To Leaner Operations & More Cost Effective Energy Sourcing To Further Reduce Utility Rates
Utilities around the US are watching in chagrin as solar is starting to siphon off their revenue streams and are formulating responses to this threat. It is outright silly to expect that utilities will just sit there and do nothing as solar starts eating utilities’ market share. The assumption that utilities will continue to raise rates when the competition is lowering rates does not pass the smell test. It is certain that utility rate structures, utility investment in power plants, and utility business models will change dramatically to keep up with the lower energy prices.
Utility Rate Realignment
We believe that the first effective response from the utilities, rate realignment, will be implemented in the next three to five years. We expect substantially all utilities to go to a new model where the utility bill will consist of a significant baseline fee for grid connectivity. We believe the baseline fees are likely to range from $5 to $50. Simultaneously, we expect the utilities to dramatically reduce the KWH pricing and also reduce peak and demand based pricing charges.
This rate realignment move will not only impede future solar penetration, but will result in a significant percent of current leases/PPAs going underwater – i.e, the energy rates on leases/PPAs will be higher than the local utility rates. Rate realignment will likely mark the first major uptick in the lease/PPA customer dissatisfaction levels.
Change In Net Metering Policies
Utilities across the country are pushing for net metering policies less favorable to solar. As the impact of solar on utilities becomes clear, we expect there to be considerable political support to reduce benefits for net metering customers. The support is likely to come from a variety of factors such as concerns about grid stability, cost shifts to non-solar customers, cost shifts to the poor, etc. This change in net metering will not only impede solar penetration but may negatively impact the benefits of pre-existing solar systems.
New Solar Energy Contracts Will Be Meaningfully Cheaper Than Existing Contracts
As solar panel costs and installation costs continue to reduce, the KWH pricing on leases and PPAs will drift down over time. Also, assuming the leasing business is anywhere near as attractive as SolarCity and Vivint claim, many new companies will enter the business and drive down the prices and profits. As cheaper PPAs/leases pervade, dissatisfaction of the users with older, higher energy rates is likely to increase.
Dropping System Costs Impacts
The installed cost of solar system is likely to drop substantially over time. We are modeling a $2 per watt installed price by 2020 including a 2 to 4 hour battery backup. At this price point, outright purchase of a typical 5kW system will cost the homeowner about $10K. We believe the percentage of homeowners who finance their system will dramatically reduce at or below the $10K price level. One has to wonder about the credit profile of the client base who sign a 20 year lease for a $10K system. We believe the FICO scores of the customer base will drop as the systems costs trend lower.
New Technologies Will Make Current Rooftop Solar Obsolete
Solar industry is in infancy. Panel efficiencies have been increasing significantly over time. Solar cell efficiency is expected to continue to increase for the next several years. The design of the solar panels is also expected to change dramatically over time. The current panel technology is likely to be obsolete both in terms of form and function during the life of a typical lease/PPA. Keeping up with the Joneses is a time honored practice of Middle America and many customers are likely to terminate their leases due to obsolescence issues.
The Home Sale Problem
Empirical data suggests that homeowners move on average about once in 5 to 7 years. During the 20 year PPA/lease term, there are likely to be three home owner transitions. These transitions are likely to be progressively more painful for lease/PPA providers, as buyers realize that they are signing up for high priced energy contracts on obsolete systems. Once the realization sets in, most savvy buyers will not assume the outdated leases and equipment.
Credit Score Deflation
Good leasing discipline calls for credit worthy customers. Currently, the solar leasing companies show excellent FICO score averages for the client base. However, as the solar penetration increases, there will be an inevitable race to the bottom that will increase the borrowing costs as well as the default rates. Some of the easy money that is currently available will no longer be available.
Fixture Filings & Other Lien Mechanisms May Become Unenforceable Or Ineffective
The solar PPA/leasing companies typically use fixture filings to protect the leased assets. However, there is no agreement on if these filings are even valid or enforceable for third party owned systems. It may take several years for case law to be established on this matter. And, in several jurisdictions, it is entirely possible that the courts may find that the fixture filings are unenforceable. The recourse for installers may be limited to uninstalling and repossessing the system at a considerable cost.
Customer Sabotage Will Kill The Goose
One of the naïve assumptions that seems to pervade the underwriters of the leases/PPAs is that customers will continue to pay in spite of the pain caused by above market rates. To a certain degree, we agree with this line of thinking. There will be many passive customers who will continue to pay above market rates. There will be some customers who buy out the remaining term of the system to avoid ongoing aggravation. However, we do not expect all customers to fall in this category. There is no precedent to model the consumer behavior in these situation that we are aware of.
However, investors have to consider how easy it would be to sabotage the roof top systems. All an irate customer needs to do is find a mechanism to break the system. There may be many options: Customers could spray cold water on the panels on a hot day, find a way to short circuit or otherwise damage the electrical system or inverters, find ways to trip the solar circuit breakers, arrange for other types of equipment damage or theft, etc. The point here is that it is not difficult for an angry or irate customers to find ways to materially harm the system and bring the lease provider to the negotiating table or otherwise uninstall the systems. The lease/PPA companies may not like to renegotiate but even minor sabotages that results in a field visits can quickly change that attitude. It many jurisdictions, it will be nearly impossible to go after or prosecute a customer for these kind of claims. We predict that these leases/PPAs will be broken or renegotiated with near impunity by determined customers.
When will these disasters start to play out? We cannot answer that question with certainty because much depends on the current market insanity behind the retained value model. As long as Wall Street buys these constructs without questioning, and as long as there is cheap money available, we expect this gravy train to continue.
However, for any serious long-term investors, the question is “when” and not “if”. We expect the first sign of lease problems will coincide with revised utility rate structures in about 5 years. The problem will grow exponentially in the subsequent years with wide spread defaults between years 10 and 15.
The income potential of these installers depends on the lease failure rates. While these rates are difficult to model with any reasonable degree of accuracy, we believe most reasonable assumptions will show a retained value at best a tenth to a quarter of value stated by these companies.
Investors should note that, as the default rates rise, the retained value may not only get smaller but may turn negative. In the event that the retained value turns negative, companies may face problems with cross defaults and the investors participating in asset backed securities for this segment may also suffer. Given this uncertainty, we do not consider these companies investible for long-term investors.
For aggressive investors willing to take risk, the value of these companies can be measured a few different ways:
– Asset value net of goodwill and liabilities
– Valuation assuming a contractor business model with a 5% net margin
– Valuation assuming a financing/leasing company with a net margin 5% to 10% of the lease/PPA face value
With these metrics, and adding in about 10% of the stated retained value, we believe the intrinsic value of the major installers are as follows:
SCTY: $15
VSLR: $0.60 (yes, the decimal is where it should be)
RGSE: $0.20
Summary
We see several major risk factors to the lease/PPA business model of SolarCity, Vivint Solar and RGS Energy. Given these risk factors, we are certain that the current lease/PPA model will fail and destroy considerable amount of shareholder wealth. To attain meaningful returns to shareholders, the companies need to fundamentally alter their product platforms and dramatically restructure their lease/PPA products.
No one giving props for the bad pun in the title of the post? “Sparking controversy…”
forgotwhoiam, No one is preventing the fossil fuel utilities from going solar. The band wagon is moving, they need to jump on.