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Power Businesses

Elon Musk's Solar City Is Ramping Up Solar Panel Production 262

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.
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Elon Musk's Solar City Is Ramping Up Solar Panel Production

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  • by paziek ( 1329929 ) on Wednesday June 18, 2014 @07:23AM (#47261567)
    Why Silevo didn't aim to be biggest? If their panels are so good and cheap, then why not just keep selling them? Why sell company that is making profit and will most likely grow? Fast cash grab, or those panels aren't so special after all? And why not just use some cheap 16% China panels in higher volume? Sure there is limited real estate on house for panels, so you might not get all your need covered by solar, but with unstable weather you wouldn't anyway.
    • by crow ( 16139 ) on Wednesday June 18, 2014 @07:43AM (#47261665) Homepage Journal

      For many people, the limit on the size of their solar array is the size of their roof. If you want to offset your full usage, you may need higher-capacity panels than the standard 250W base panels. There are a number of higher-efficiency panels available, but the cost per Watt is higher. They probably don't cost much more to manufacture, so the more efficient panels have a higher profit margin.

      Also, you have to keep improving your technology or you're out of the business when the cheap panels get to be as efficient than what you're producing.

      • by ShanghaiBill ( 739463 ) on Wednesday June 18, 2014 @08:01AM (#47261751)

        For many people, the limit on the size of their solar array is the size of their roof.

        If you have an unobstructed, south sloping roof, it is likely you can offset all of your electricity needs with standard panels. I looked into this last year, and we needed panels on less than half of our roof. However, we decided against it because it was far more cost effective to invest in cheap LED light bulbs ($2 each on eBay) and attic insulation. That pushed all of our electricity consumption into the lowest billing tier, and the solar panels no longer made financial sense.

        • "the lay of the land today, where there are indeed too many suppliers, most of whom are producing relatively low photonic efficiency solar cells at uncompelling costs" (Quote from http://blog.solarcity.com/sile... [solarcity.com])

          You have indeed discovered the unvarnished truth, solar is not viable in terms of cost and this is unlikely to change anytime soon. Conservation is usually the best bang for the buck, but even that has it's limits.

          • You have indeed discovered the unvarnished truth, solar is not viable in terms of cost and this is unlikely to change anytime soon.

            Not true at all. The subsidies and tax write-offs and other benefits continue to pile up. Someone who is paying full retail for his panels is just someone who is too lazy to file the appropriate paperwork.

        • by brunes69 ( 86786 )

          If you live in a southern climate, sure. If you live in a northern climate, for half of the year you are only getting 50% light cover on your panels at best... and that is assuming you can keep them cleared of snow.

          • by captjc ( 453680 )

            Personally, I think the northern climate excuse needs to go. Germany is farther north than the entire United States (minus Alaska) and they have been the worlds leader in Photovoltaic power generation since 2005 [wikipedia.org]. It isn't like they get more sunshine than Arizona or have more land area than the US.

            • by brunes69 ( 86786 )

              Latitude is not everything when it comes to sunlight and snow. Montreal,Canada is quite a bit further south than London. If you have ever been to Montreal and London in the winter you would know what I am talking about.

            • And they would generate twice as much energy in the same land area with lower cost of manufacture if they had used parabolic reflector dishes and sterling engines attached to dynamo.
              • by pla ( 258480 )
                And they would generate twice as much energy in the same land area with lower cost of manufacture if they had used parabolic reflector dishes and sterling engines attached to dynamo.

                Quite a bit of difference between having a dedicated solar furnace in your back yard, vs covering already-wasted space on your roof with more-or-less passive 2x4ft "tiles" that just happen to produce a significant portion of your home's electricity.

                That said, I think the big manufacturers have really missed an opportunity i
                • We use expensive photovoltaic panels for ginormous solar power plants with active arrays spanning huge fields. We should use salt towers or parabolic reflectors.

                  Who says you can't mount a shiny satellite dish on top your house?

        • by AmiMoJo ( 196126 ) *

          the solar panels no longer made financial sense.

          It seems unlikely that your electricity usage is so low that the panels would not pay for themselves over their expected lifetime. You could be creative and use electricity for more heating/cool or look at getting an EV too. What about feed-in tariff?

          You really must be an unusual case if you can't make a little money from solar, but even then your roof is valuable real-estate for PV that someone else could make a profit with and pay you rental.

      • by mlts ( 1038732 )

        I see two types of panels being sold:

        One type that is used for limited space, engineered to get as many watts from each square centimeter as possible, even if it is more costly. RV-ers come to mind, because for most rigs, space is at a premium.

        The second type is to obtain a decent amount of watts, but be cheaper, for larger areas such as a roof. Here, price per watt is more important.

        In both cases, reliability is very important and not to be overlooked. Panels don't take much to maintain once in place, b

    • by Jaime2 ( 824950 ) on Wednesday June 18, 2014 @08:22AM (#47261909)
      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.
      • If this goes through, another positive side effect of the plant being in NY is that the percentage of electricity generated by coal in north east is among the lowest in the nation. Every now and then I hear the false rumor that solar panels take more energy to generate than they produce. The industry is already energy neutral and all those panels that were produced during the rapid industry growth still have 20-30 years of free energy collection to pay back their debt. It will be a huge win for CO2 reductio
    • by sribe ( 304414 ) on Wednesday June 18, 2014 @08:48AM (#47262143)

      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.

    • Because you can not compete with a nation that subsidizes and dumps on foreign market as well as manipulates money. With this approach, they have a market right away. In fact, solar city is ready to expand their operation all over america.
    • Well - one - sure.
      The largest players in the market are at the moment shipping a gigawatt a quarter or so.
      Ten gigawatts a year would make them the largest in the world by a comfortable margin.
      And likely depress the price to well below $.50/W.
      If they can get the price well under this - say $.25/W - then solar becomes economic in a lot
      more places.
      At that price, I'm buying 6kW or so.
      At $.25/W, that is a price of $50/m^2.
      This is in the range where it's sort-of-comparable with other roof claddings.

      • >This is in the range where it's sort-of-comparable with other roof claddings.

        Now that's what I'm waiting for - solar propanel so that you don't need to cover your roof with weather-protection only to cover *that* with solar panels.

  • 10 cents per watt is saved for every point of efficiency gained

    What does that mean ?


    My electricity cost of approx. € 0.25 / kwh

    How do I save 10 cents per watt ? Or are they talking about the re-purchase price of the panel ?
    • Re:I'm confused (Score:5, Informative)

      by jonnythan ( 79727 ) on Wednesday June 18, 2014 @07:37AM (#47261641)

      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.

  • The man has vision (Score:5, Interesting)

    by Jheralack ( 1067056 ) on Wednesday June 18, 2014 @07:34AM (#47261623)
    Musk really has the vision and guts to push us in these areas that have languished for years (private space travel, electric cars, and now domestic electric power generation), and seems to be making them working concerns. If he gets even one past the tipping point, it's a lifelong career's worth of accomplishment. He may get the hat trick! Maybe we should pay attention to his alternative to the California high speed rail project...
    • by NatasRevol ( 731260 ) on Wednesday June 18, 2014 @09:54AM (#47262785) Journal

      He's like an actual, decent version of an Ayn Rand book.

    • It's been really amazing watching what this guy has done and continues to do with his money and energy.

      Why?

      Compare to other tech billionaires and what they do with theirs...
  • um (Score:4, Funny)

    by Charliemopps ( 1157495 ) on Wednesday June 18, 2014 @08:05AM (#47261783)

    Haven't we all watched enough James Bond and Super Man films to know that Elon Musks true goal is to build a Giant Robot and/or Start WW3?

    • True, but the supervillian only loses in the movies. In the real world, you are better off being on his side than against him.

      • by captjc ( 453680 )

        Hank Scorpio offers great salaries, awesome compensation packages, on-the-job hammocks, and if you want to kill someone on the way out, it would really help him out.

        What's not to like?

  • I've played around with a few ROI calculators and thus far it appears that I wouldn't break even for 17 years. That's a pretty lousy return on investment particularly if the cells only have a 20 year life. And the performance degrades over time. These calculators don't seem to take that into account.

    • Not to mention that you're stuck in a 15+ year lease that could affect selling your home and such.

      When I looked into this, I not only closed the browser, but haven't even looked in their general direction since.

      • I wouldn't even consider leasing them because if it benefited the customer, the solar companies wouldn't do it.
        So with an outright purchase, the ROI doesn't seem to be there.

    • by djrobxx ( 1095215 ) on Wednesday June 18, 2014 @05:45PM (#47267407)

      Solar panels typically have a 20 year warranty, and are guaranteed to output 80% of their power at year 20 (these figures are required to be met in order for the systems to qualify for tax incentives, so they're pretty common amongst manufacturers). They'll most likely continue working after the warranty. I will, however, probably have to replace my inverter every 10 years or so. It looks like I can pick up a new one on ebay for around $2000 right now. I'm hoping the cost of these drops over time or the technology improves such that my next one is more reliable.

      As for ROI, my break even was only 5-6 years. In Southern California we pay dearly for electricity (over 30 cents per kWh once you get past some scant "baseline"), but we have plenty of sunshine. It's been almost 3 years now. The estimated savings for my $15k investment was projected at $100k or so over 20 years. I feel they're using too high of a percentage year-over-year increase of utility power, but even if I only make half that, it's still a good investment.

      I did opt to buy instead of a pre-paid lease. The salescritters promised that the leasing companies would effectively gift me the system for $0 at year 20 because it would be too costly to remove, and that the real money was in the accelerated depreciation in years 0-5. However, if I think of the solar panels as a money printing machine, it seems unlikely that the panels, even if they're 20 years old, would have a fair market value of $0. No business would give away something that they can get money for, so I have to assume that at year 20 they will do something to ensure they continue to get a profit from the system that they legally own on my roof. Forget that uncertainty, I decided to just buy it so there are no unknowns. I think it will be really fascinating to see what happens to all of these ultra-long leases in the 2032 time frame.

  • But when will Elon Musk build his Iron Man suit?

  • Just dropping in to say that anyone who names a company after a pinball game [ipdb.org] has my vote.

    Plus I loved that machine.

  • by 140Mandak262Jamuna ( 970587 ) on Wednesday June 18, 2014 @12:46PM (#47264459) Journal
    Musk is treading on some big toes. When he went into electric cars, no one took him seriously. But he proved them wrong, smeared eggs on the faces of performance/luxury car makers, earned the enmity of car dealers across the nation. That has earned him a reputation and now he is being taken quite seriously.

    Now he is upsetting another huge industry with trillion dollars in assets, the electric utility companies. And the technique he is using requires someone with great credibility to raise incredible sums of money. Solar never threatened utilities before because, the system cost was high, and individual home owners had to do some complex breakeven analysis, raise funds and take some risk. But Solar City is zero risk to the home owners, perfect distributed competitor to the utilities, plans to make electricity using zero cost fuel (sunlight). The entire cost is cost of servicing debt. Interest rates are lowest in known memory.

    The technology and the business model will make it immaterial who the prime-movers are backing it. But the speed at which change happens depends on a charisma and credibility of players like Musk. The utility companies would not hesitate to find scandals, astro turf to create fake scandals, engage in character assassination etc to bring him down personally. So he should be careful with his dealings.

Keep up the good work! But please don't ask me to help.

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