Tesla’s investment in new solar tech comes with risks
Having staked their territory in the vehicle sector, Tesla appears to have set their sights on something a little closer to home, announcing that they will be developing an integrated home energy system with new battery and solar panel roof technology. The Tesla Solar initiative was released this past week at a press conference by CEO Elon Musk. Assuming that the panel manufacturer, SolarCity – a company that Musk is chairman of – becomes part of Tesla after a shareholder vote in November, its facilities in Buffalo, NY may be retooled to accommodate Tesla’s existing manufacturing partner, Panasonic.
At the event, Musk said that, “The goal is to have solar roofs that look better than a normal roof, generate electricity, last longer, have better insulation, and actually have an installed cost that is less than a normal roof plus the cost of electricity.”
The three main development areas Musk outlined – Tesla’s “energy equation” – were generation, storage, and transportation. The first product introduced was the Powerwall 2, which holds twice as much energy as the original Powerwall system, and would be able to power lights, appliances, and sockets for a day in a large home.
Tesla also announced the Powerpack 2, which will be introduced in California for utilities infrastructure after an earlier test run in Hawaii.
At present, the cost of the system means it will be most useful in areas with limited access to conventional power sources or already high utilities prices to reduce costs by shifting loads at night or as backup. In a SEC filing ahead of the event, Telsa further outlined a “huge market opportunity as five million US households replace roofs each year.”
Powerwall 2 costs $5,500 per unit. Pricing was not available for the panels, though it will vary from installation to installation as they are customizable and can be either integrated with a conventional roof or replace it entirely.
In terms of aesthetics, the solar cells will be offered in four styles: Tuscan glass, slate glass, smooth glass, and textured glass. Their color louver film component will make the tiles appear to be “normal” roof tiles rather than unsightly panels when viewed from eye level.
While nonrenewable energy sources remain the dominant means of electricity generation, renewables including solar are expected to grow at a faster rate worldwide in the coming 5 years due to more supportive policies in the US and other countries. Elsewhere in the industry, trials are being run for solar power systems that can also produce water.
The panels for the roofs will be made by SolarCity, and on November 17 Tesla’s shareholders will vote on a potential acquisition of that company for $2.45 billion. If the deal is approved, Telsa will presumably take over SolarCity’s Buffalo plant and let Panasonic into it, since that company already builds rechargeable batteries for Tesla.
The SEC filing heavily touts Panasonic’s current role and future potential as a renewables manufacturer.
It is unclear exactly what will happen with respect to the State of New York’s proposed $750 million state funding for SolarCity. According to SolarCity, the Buffalo site would only be able to meet 20% of anticipated demand for its solar panels, so expansion is a possibility with Panasonic stepping in, with SolarCity otherwise taking delivery of Chinese-built models sourced from its Silevo division overseas.
Panasonic would have the option of combining the SolarCity/Silevo technology with its own, or even replacing it entirely. Scaling up domestic production would have the additional benefit of removing the import duties SolarCity/Silveo must pay for panels sourced from of the US.
If the deal succeeds, Telsa will assume complete control over SolarCity and its brand name(s) by 2017. However, several lawsuits against Tesla’s board over the process may weigh down the deal going into the vote. Musk and two of his cousins, both SolarCity executives, have of course had to recuse themselves from the vote.