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Elon Musk's Solar City Is Ramping Up Solar Panel Production
MarkWhittington writes: Elon Musk is well known as a private space flight entrepreneur, thanks to his space launch company SpaceX. He is also a purveyor of high end electric cars manufactured by his other company, Tesla Motors. But many people do not know that Musk has a third business, Solar City, which is a manufacturer of solar panels. On Tuesday that company announced a major play to increase the output of solar panels suitable for home solar units. Solar City has acquired a company called Silevo, which is said to have a line of solar panels that have demonstrated high electricity output and low cost. Silevo claims that its panels have achieved a 22 percent efficiency and are well on their way to achieving 24 percent efficiency. It suggests that 10 cents per watt is saved for every point of efficiency gained. Solar City, using the technology it has acquired from Silevo, intends to build a manufacturing plant in upstate New York with a one gigawatt per year capacity. This will only be the beginning as it intends to build future manufacturing plants with orders of magnitude capacity. The goal appears to be for the company to become the biggest manufacturer of solar panels in the world.
They're talking about purchase and installation:
"Because less modules are needed for the same power output, less land, labor, mounting structures, wiring and support racks are also required, saving an estimate of 10 cents a watt for every point of efficiency gained."
So if you're installing 4000 watts worth of panel, using 23% efficiency panels costs $400 less to purchase and install than 22% efficiency panels.
They didn't have enough cash. The reason they are building the plant in Buffalo is because New York State as paying for most of the up front capital. Before Musk, they had to find creative ways to grow the company and were likely to get trampled in the market by a competitor with the money to make market moves that Silevo couldn't afford to do. With Musk behind them, they can grow at whatever pace they can convince Musk they can be profitable at.
Why Silevo didn't aim to be biggest?
Legitimate question, to which the summary provides no clue as to the likely answer.
Solar City is not just a manufacturer, they are also, in a sense, a distributed alternative utility. They do not sell panels to homeowners. Instead, they install solar systems on homes and sell the electricity produced to the homeowner. The advantage is that the homeowner has $0 upfront costs, and is guaranteed a specified level of savings over their current utility prices. So it's a much easier sell, since homeowners don't have to apply for a loan, cough up a down payment, make monthly payments and so on.
This model has been very successful at brining in sales, and Musk has been pretty successful at raising the enormous amounts of capital required to scale this model. (Solar City fronts the whole cost of installation, then earns that + profit back over a pretty long period of time.) It would be a heck of a challenge for a manufacturer of panels to go out and build the kind of business that Solar City has built.
It is not cut in half.
Well, our electricity expenses (i.e. the sum of the money we send to the power company, plus the money we send to SolarCity) went from $1000/month to $650/month.
You're right, that's not quite "cut in half", but $350/month in savings is nothing to sneeze at either, especially since achieving it cost us nothing but some roof space we weren't using anyway.
I don't care if it's 90,000 hectares. That lake was not my doing.