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Is Net Metering an Alarming Call for Utilities?

Vincent Kruger

Net Metering Is Still Strong despite Being Dropped from a Few States

(Continued from Prior Part)

State-wise net metering capacity additions

Net metering is authorized in nearly 44 US states. However, the implementaion wasn’t even between these states. The top ten states accounted for 87% of the net capacity addition in 2015. California added the maximum capacity in net metering in 2015. It accounted for 1,154 megawatts compared to 2014. California was ahead of the capacity addition last year. New York only added 186 megawatts in solar net metering.

The primary reason for net metering growth in California was the favorable regulatory environment. Apart from this, helpful weather conditions for solar PV (photovoltaic) and third-party operators like SolarCity (SCTY) also supported the growth. They facilitate net metering arrangements between utilities (XLU), customers, and themselves.

Considering the last five years’ time horizon, nearly 7,873 megawatts of capacity were added in the US through solar net metering. Out of this, 55% or 4,336 megawatts were added in the residential sector. Improvement in solar PV technology, strong growth in the residential sector, and an increased number of third-party facilitators drove the growth.

Distributed generation

Distributed generation is becoming popular in the United States (SPY). It’s a win-win for both customers and the enviorment. However, it sidelines the traditional utility operations appoach because it doesn’t involve a transmission network. Can this be an alarming signal for traditional utilities?

Electric grids are very important for utilities. They transmit power generated in distant power plants to customers. Public Servie Enterprise Group (PEG), XCEL Energy (XEL), and PPL Corporation (PPL) allocated huge sums of their capital spending to grid modernization. Some utilities (JXI) are investing in both distributed generation as well as in their transmission network. However, not changing according to industry developments could be management’s myopia in the future.

Continue to Next Part

Browse this series on Market Realist:

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For second lead asset omburtamab in NB metastatic to the central nervous system (CNS/LM from NB), while the ‘Refuse to File’ last year and subsequent regulatory delays were certainly disappointing, we still see a high probability of approval for the product in the 2Q/3Q22 timeframe…” Looking ahead, Romero sees an upbeat outlook for the company: “Coupling our anticipation of a healthy launch for Danyelza, with regulatory/clinical momentum expected in the near- to mid-term, we see shares poised to rebound and see an attractive buying opportunity at current levels.” The analyst puts a $52 price target on YMAB shares, implying an upside of 86% for the year ahead, and supporting an Overweight (i.e. Buy) rating. (To watch Romero’s track record, click here) Overall, the Wall Street reviews break down 3 to 1 in favor of Buys versus Holds on Y-mAbs, giving the stock a Strong Buy consensus rating. The shares have an average price target of $61.25, suggestive of a 121% upside potential this year. (See YMAB stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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    Investing is a crucial part of accumulating enough money in retirement — and the best results come with proper asset allocation. Retirement tip of the week: Check the asset allocation of your retirement portfolios, and if you’ve done it recently, make it a regularly scheduled task once a year. “The time to review your asset allocation and overall retirement investment strategy should be a proactive process throughout the year,” said Jon Ulin, chief executive officer of Ulin & Co. Wealth Management.

  • Arm Battle With China CEO Escalates, Complicating SoftBank Sale

    (Bloomberg) -- The battle for control of Arm Ltd.’s China business is escalating with new lawsuits aimed at keeping the unit’s controversial chief executive in power, further complicating SoftBank Group Corp.’s efforts to sell the business to Nvidia Corp.The dispute erupted almost a year ago in June after the board voted to oust Arm China Chief Executive Officer Allen Wu for conflicts of interest, but he refused to leave. Now the Chinese unit, which remains under Wu’s control, has filed lawsuits against three senior executives the board designated to replace him, according to people familiar with the matter. The previously unreported suits could take years to resolve, suggesting Wu may remain entrenched.Wu fired the three men -- including co-CEO Phil Tang -- but they were subsequently reinstated by the board. In the new lawsuits, Arm China is suing the trio, demanding they return company property, according to the people.Arm China declined to comment on any ongoing legal cases or possible settlement talks. It did say the three executives had caused “material damages” to the company and they had been terminated for legitimate reasons.Tang didn’t return requests for comment. Arm Ltd. declined to elaborate, saying it won’t comment on pending legal matters.The complex tussle has thrown into question the future of Arm, whose semiconductor technology is the world’s most widely used for smartphones and is increasingly deployed in computers. SoftBank founder Masayoshi Son agreed to sell the British chip designer to Nvidia for $40 billion last year, but the path for completing that transaction is growing increasingly difficult.The China dispute also raises questions about Beijing’s willingness to protect foreign investment in the world’s second-largest economy. Arm Ltd. sold a majority stake in the China unit to a consortium of investors, including Beijing-backed institutions. That has complicated the British firm’s efforts to manage Arm China and Wu, who has support from local authorities in Shenzhen.Both sides appear to be at a stalemate. Wu, a Chinese-born U.S. citizen, pulled back from signing settlement agreements worth tens of millions of dollars if he would leave the company, the people said, asking not to be identified talking about legal matters. At the same time, two minority shareholders in Arm China linked to Wu have filed lawsuits to overturn his June 4 dismissal, they said.SoftBank opened negotiations with him last year and had hoped to reach some sort of resolution, they said. Instead the court battles are deepening and the Japanese company has soured over the increasingly complicated dispute, the people said. SoftBank is now resigned to letting the legal proceedings take their course and there are no current negotiations with Wu, according to one of the people.“We are going through a leadership change in China; it’s taking time to resolve,” said Arm Ltd.’s Chief Executive Officer Simon Segars in an interview with Bloomberg Television recently. “It’s hard. But we are confident that’s going to get resolved.”SoftBank and Nvidia declined to comment on the dispute in China.Arm China said in a statement that Wu’s position “is compliant with legal registration and confirmed by China law and regulations.”Read more: Arm Takes Aim at Intel Chips in Biggest Tech Overhaul in DecadeThe standoff accords a relatively unknown executive outsized influence over one of the industry’s most important pieces of technology, in the world’s biggest internet and semiconductor market. Chinese companies need unfettered access to Arm’s products to push forward with the country’s attempts to make itself more independent in chip technology, an area where it’s largely reliant on imports. Beyond resolving the stalemate, Nvidia and SoftBank also need Beijing’s signoff to seal their deal, and it’s unclear whether Wu’s presence would complicate that.Wu’s hold on Arm China is partially due to local laws which make it difficult to change control of a company unless you’re physically in control of the company stamp and registration documents. He’s refused to give them up and has used company funds to pay for legal fees incurred in his attempt to fight off his dismissal, the people said.Arm China said payment of legal fees “is made in compliance with company policies as well as China laws and regulations.”His ultimate goals appear to be a large cash payoff and immunity from subsequent legal action, according to people who’ve spoken with him. Inside Arm China, which is responsible for selling licenses to its chip designs and fundamental technology in the country, Wu has told local staff he’s not going anywhere. He recently gave employees Chinese New Year cash presents in a red envelope with his surname on it.Arm China said the money came from Wu personally to show his appreciation to colleagues, a tradition at Chinese New Year in the country.Hearings in the case against the three executives are expected to take place in late May, one of the people said. Separately, two minority shareholders in Arm China have sued the Chinese entity in Shenzhen to nullify the board’s decision to oust Wu. These two cases are now being merged and hearings are slated for late April, the people said.Son told investors as recently as February that he expects to close the Arm sale and “I don’t have any Plan B.”Arm, for its part is trying to make sure that its technology remains pervasive in China despite U.S. sanctions intended to curb the supply of American technology to major companies like Huawei Technologies Co. While Arm is a U.K.-based company part of its operations are in the U.S. making its products subject to controls.The Chinese government has not stated its position on the Arm China leadership struggle, but the unit has several government-backed shareholders including sovereign wealth fund China Investment Corp. and the Silk Road Fund.In his interview with Bloomberg Television, Arm Ltd. CEO Segars said that the ten-month standoff hasn’t hurt Arm’s business in China. Lack of travel for face-to-face meetings during the pandemic has prolonged the process of changing leadership in China, he said.“When we announced the deal in September, we said it would take about 18 months,” he said. “We remain confident in that timeline.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Why Alibaba Just Got Hit With A Record $2.87 Billion Fine In China

    The regulatory troubles that have beset Jack Ma since November may be nearing their end, culminating in a hefty fine slapped on the Chinese tech entrepreneur's biggest brand. What Happened: China fined Ma's Alibaba Group Holding Ltd (NYSE: BABA) a record $2.8 billion after a monopoly probe found that the company had abused its dominant market position, Reuters reported. The regulator also ordered Alibaba to make "thorough rectifications" to strengthen internal compliance and protect consumer rights. The Chinese government said that Alibaba had used anti-competitive practices in its online retail market. According to state-run Xinhua news agency, the penalty came from the State Administration for Market Regulation, which had been investigating it since December. The size of the penalty was determined after regulators decided to fine Alibaba 4% of its 2019 sales of 455.7 billion yuan. The fine is more than double the $975 million fine that China issued to QUALCOMM, Inc. (NASDAQ: QCOM) in 2015 for anticompetitive practices. In a press statement, Alibaba said, "Alibaba accepts the penalty with sincerity and will ensure its compliance with determination." "To serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems and build on growth through innovation," the company added. Alibaba will hold a conference call on Monday to discuss the penalty. Why It Matters: The outspoken Ma has long been the most visible figure of China's economic rise and stands out in a culture where getting attention at high levels is perilous. Alibaba, in particular, has been under scrutiny since last October when Ma criticized China's banking sector as operating with a “pawnshop mentality." The government scuttled the planned blockbuster Ant Group IPO shortly after Ma made the comments. Chinese regulators are increasing their pressure on Ma and his powerhouse companies, Ant Group Co., Alibaba Group Holding Ltd. and Alibaba's media holdings. Last year, the People's Bank of China, the country's central bank, instructed Ant Group to "rectify" how it does business. Ma's Alibaba Group and other leading tech companies in China have been scrutinized by regulators over their growing influence in the country. Technology firms in China have been hiring legal experts and setting aside funds for potential fines amid the antitrust and data privacy crackdown by regulators. Photo courtesy: World Economic Forum via Wikimedia See more from BenzingaClick here for options trades from BenzingaWhy Authorities Are Putting The Brakes on Johnson & Johnson's Vaccine In Several States'Godzilla vs. Kong' Smashes Pandemic-Era Box Office With .5 Million Debut© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

  • Ecuador’s Divisive Presidential Vote Has Bondholders on Edge

    (Bloomberg) -- Investors are bracing for an unpredictable run-off finale to Ecuador’s contentious presidential race as opinion polls flag a rally of support for career banker Guillermo Lasso, sending the nation’s dollar bonds back to levels seen before the election began.Voters will return to polling stations on Sunday to decide between self-exiled former socialist President Rafael Correa’s 36-year-old protege Andres Arauz, or Lasso, a banker and conservative from the coastal hub Guayaquil. It’s a high-stakes choice for the country and its bondholders, coming just months after Ecuador’s 11th default or debt rescheduling in almost 200 years.Arauz held a double-digit lead in the initial voting round in February, but recent polls show Lasso has closed the gap. This may be leading investors to adopt more neutral postures heading into the vote, even as many voters remain undecided, said Siobhan Morden, head of Latin America Fixed Income Strategy at Amherst Pierpont. Adding to the confusion, the Indigenous political party Pachakutik has called on its supporters to spoil ballots amid fraud accusations.“The bottom line is that the latest polls warrant a neutral position on what we view as equal binary outcomes and policy risks,” Morden wrote in a note. “We had previously argued the potential for extreme heterodox policies under an Arauz candidacy and now shift our analysis to the opposite orthodox policy risk under a Lasso candidacy.”Read the QuickTake: Why Ecuador’s Runoff Vote Matters for the Bond MarketWith so much up in the air, Ecuador’s recently restructured dollar bonds are near levels seen around the first round of voting in February. The notes due in 2040 have risen from an early-March low to trade at 45.5 cents on the U.S. dollar, just off the highest since the final trading day before February’s vote. Still, they’re down about 13 cents from last year’s restructuring, and slipped less than half a cent since Tuesday. The nation’s bonds, on average, are the fourth worst-performing emerging-market debt this year in a Bloomberg Barclays index.“Asset prices have reflected optimism for a Lasso victory this month as Arauz has opposed the central bank reform bill currently making its way through the national assembly,” Citigroup Global Markets Inc. strategists including Eric Ollom and Donato Guarino said.The increased possibility of a Lasso win makes the bonds maturing in 2040 a buying option as “they would be poised for the largest upside regarding current prices,” Ramiro Blazquez and Bruno Gennari of Buenos-Aires based BancTrust wrote in a research note.The extra yield investors demand to hold Ecuador’s sovereign dollar bonds over U.S. Treasuries is 1,168 basis points, putting the nation in distressed territory alongside countries such as Argentina, Belize and Lebanon, according to JPMorgan indexes.Final RoundAt stake in Sunday’s vote is the next government’s willingness to honor the terms of last year’s $17.4 billion debt restructuring and whether it can maintain fiscal targets required under a $6.5 billion deal inked in September with the International Monetary Fund. The new administration will also need to prop up Ecuador’s sputtering economy, which contracted 7.8% last year and may grow just 3.1% in 2021, according to the country’s central bank.While Lasso’s momentum in the polls has stoked speculation that he could pull off a victory, it’s still unclear if he’d be able to garner legislative support for austerity measures. Neither of the candidates will have a congressional majority if they win.“The fragmentation of the National Assembly together with the strong legislative influence of the left would make governability extremely challenging,” according to Blazquez and Gennari.Meanwhile, for Arauz, investors are split on whether he’d replicate Correa’s policies, which included a weakening of institutions, crackdowns on opponents, limiting freedom of expression and running large deficits. The candidate has adopted a more conciliatory tone in talks with bondholders, saying he’s committed to dollarization and to not restructuring the debt. However, he also continues to insist he will distribute $1 billion to poor families from the central bank’s scant reserves.“While the election is looking more competitive, Arauz retains an edge,” Eurasia Group analysts Risa Grais-Targow and Laura Duarte wrote in a note this week. “Ultimately, he represents a clearer change in economic policy, but he will also have to contend with anti-Correista sentiment, making for a close contest.”WHAT TO WATCHBrazilian traders will keep an eye on talks to resolve the 2021 budget gridlock, which has been one of the most significant local drivers this month. President Jair Bolsonaro signaled he may be leaning toward a partial veto of the bill approved by Congress, as requested by Economy Minister Paulo Guedes, but the situation may still changeBrazil’s February retail sales due on April 13 may offer a fresh outlook on how the country’s economy is behaving amid increased coronavirus cases and the outlook for higher rates in the near termColombia retail sales are also due next week, on April 15Both Colombia and Chile have significant parts of their populations in lockdown in an attempt to fight the spread of Covid-19. Chile traders remain focused on the mid-term copper outlook as the commodity continues to favor local assets amid an improvement in the country’s current account balancePeru will hold its presidential election on April 11. The local market has been boosted by rising odds that market-friendly candidate Hernando de Soto will advance to the second round. Volatility should appear on Monday independent of the result(Adds Citi comment in sixth paragraph and updates prices in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • XPeng to Produce Its Own Chips; Analyst Weighs In

    The latest noises coming out from China suggest XPeng (XPEV) is keen to produce its own chips in-house. According to Chinese news outlet 36kr, using a small team of less than 10 engineers, the Chinese EV maker is developing its own autonomous driving chip. The production started a few months ago and is taking place in both the US and China. Xia Heng, XPeng’s Co-President and Chief Technology & Operation Advisor Benny Katibian, whose prior jobs include leading the tech dept at Qualcomm's ADAS team, are at the helm of the new project. “Industry sources indicate XPeng is actively recruiting chip engineers,” said Deutsche Bank’s Edison Yu, who believes this suggests “there are plans to grow this effort moving forward.” “In our view,” Yu further noted, “We do not expect any near-term changes as both XPILOT 3.5 and 4.0 will use Nvidia chips (Xavier and Orin), but believe similar to Tesla/NIO, XPeng wants to ultimately use a custom designed chip purpose built to train its neural net (to use in XPILOT 5.0) rather than a general purpose chip, in order to maximize performance/ efficiency and lower cost.” Yu thinks local rival Nio, is “likely” fast at work on a similar project after poaching Xiaomi's chip division manager. Looking at the wider picture, Yu believes it is all part of an effort by the industry/government to lower the dependence on foreign chips. Earlier this year, backed by BYD and Great Wall Motor, Horizon Robotics raised $900 million in a Series C round. The 5-year-old, local start-up was recently selected by SAIC (GM and VW’s main JV Chinese partner) to supply its ADAS/AD chipset. Horizon is targeting the shipment of 1 million chips this year and Yu believes it is a good example of the local industry’s chip manufacturing ambitions. To this end, Yu rates XPEV shares a Buy along with a $48 price target. The implication for investors? Upside of 39%. (To watch Yu’s track record, click here) XPEV stock has a resounding “yes” on Wall Street. 6 Buys and 1 Hold assigned in the last three months add up to a Strong Buy analyst consensus. At $49.50, the average price target implies upside potential of 43.5%. (See XPEV stock analysis on TipRanks) To find good ideas for EV stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

  • He began buying Tesla at just $7.50, and now he’s retiring at 39 years old with $12 million worth — he still refuses to sell a single share

    While just about every financial planner out there continues to espouse the "diversify" mantra, Jason DeBolt, a former Google and current Amazon employee, has taken a decidedly different approach.

  • Borrowing opportunity: Mortgage rates drop for the first time in 7 weeks

    Rates have reversed course, giving homebuyers and homeowners an opening.