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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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  • Sustainability (Score:2, Informative)

    by Anonymous Coward on Wednesday June 18, 2014 @08:25AM (#47261577)


    "Over 90% of the Earth's crust is composed of silicate minerals..."

    I don't think Silicon is the problem here. Most (if not all) solar panels depend on other rare earth materials that may be in short supply tho.

  • Re:I'm confused (Score:5, Informative)

    by jonnythan ( 79727 ) on Wednesday June 18, 2014 @08:37AM (#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.

  • by Jaime2 ( 824950 ) on Wednesday June 18, 2014 @09:22AM (#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.
  • by sribe ( 304414 ) on Wednesday June 18, 2014 @09:48AM (#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.

  • by Jeremi ( 14640 ) on Wednesday June 18, 2014 @10:58AM (#47262837) Homepage

    They'd be stupid not to consider, "how much will it cost to clean up the mess?" in today's day and age where the EPA can come in and pretty much regulate you out of business for messing things up.

    That's true, which is one reason why not many coal plants are being built in the USA today.

    However, solar panels aren't competing against new coal plants -- they are competing against the many existing coal plants which have been running for years, and whose construction has already been paid for. Those plants' only ongoing costs are maintenance and fuel, which makes them relatively inexpensive to operate.

    The cost of repairing the damage to the climate that those plants cause, OTOH, may be quite large, but the owners of the plants will not be responsible for paying that cost, so they don't care.

  • by Jeremi ( 14640 ) on Wednesday June 18, 2014 @12:04PM (#47263519) Homepage

    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.

  • by djrobxx ( 1095215 ) on Wednesday June 18, 2014 @06:45PM (#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.

Our business in life is not to succeed but to continue to fail in high spirits. -- Robert Louis Stevenson