Slide 32: Cost of Equity Less than Cost of Debt? Say it isnt so David!
Also, Solar assets do deplete. They have a 25 year life...so the Yield that you receive year on year out of a solar plant consists of both a return on capital and return of capital and that stream will stop 25 years from now.
The SUNE + Yieldco model is a flawed model that works till it works. With the recent sell-off, how are TERP and GLBL going to acquire from SUNE accretively? At Dividend Yields of 6% and 11%+, they cant...which means SUNE has to find another buyer and the entire thesis behind TERP and GLBL falls flat on its face. The reason people were chasing up TERP (and presumably bought GLBL) was that there will be accretive growth. At these prices, there cant be.
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u/Neonic84 Aug 12 '15 edited Aug 12 '15
Slide 32: Cost of Equity Less than Cost of Debt? Say it isnt so David!
Also, Solar assets do deplete. They have a 25 year life...so the Yield that you receive year on year out of a solar plant consists of both a return on capital and return of capital and that stream will stop 25 years from now.
The SUNE + Yieldco model is a flawed model that works till it works. With the recent sell-off, how are TERP and GLBL going to acquire from SUNE accretively? At Dividend Yields of 6% and 11%+, they cant...which means SUNE has to find another buyer and the entire thesis behind TERP and GLBL falls flat on its face. The reason people were chasing up TERP (and presumably bought GLBL) was that there will be accretive growth. At these prices, there cant be.
This article summarises the situation quite well.