2006, brothers Pete and Lyndon Rive founded SolarCity with their cousin
Elon Musk, who is better known as Tesla’s CEO. SolarCity, which is now
the country’s largest provider of rooftop solar panels, is in the news
again because Musk wants Tesla to buy it.
The proposed deal has a lot of folks scratching their heads for a
number of reasons, not least of which is that the two companies had
combined losses of $1.6 billion in 2015. This weekend we look back on
stories about SolarCity’s past success and future challenges.
Tesla-SolarCity Success Depends on Battery Technology That Doesn’t Yet ExistOn
Wednesday, we reported that a prosperous coupling of Tesla and
SolarCity relies on a currently nonexistent energy storage system. Tesla
is investing in a large factory for lithium-ion batteries, but it seems
that it will be years still before the synergy between electric cars
and solar power will have a large impact on energy.
Battles Over Net Metering Cloud the Future of Rooftop Solar One
advantage for residential owners of solar panels is the payment they
receive when excessive energy is produced and sent back to the grid.
Even Lyndon Rive says that without this scenario—called net
metering—residential solar doesn’t make much financial sense for
consumers. But Nevada and other states are backing down from net
metering, as we reported in January. That doesn’t bode well for
10 Breakthrough Technologies: SolarCity’s GigafactoryUntil
now, SolarCity’s business model focused on financing and installing
solar panel systems, relying mainly on Chinese manufacturers for the
actual panels. That is all set to change with its new so-called
gigafactory in Buffalo, New York, which was one of our 10 Breakthrough
Technologies in 2015. It’s a bold move, and only time will tell if it
pays off for the still unprofitable company.
Paying for Solar PowerSince
Buffalo is one of America’s cloudier cities, it seems like an odd
location to build a giant solar-panel factory. Yet that’s what SolarCity
decided to do, in no small part because New York picked up the $750
million price tag for building and equipping the facility. Last year we
reported on this issue and a larger, looming question: is paying for
solar power sustainable?
Innovators Under 35: Lyndon RiveSolar
City’s cofounder and CEO Lyndon Rive was one of our Innovators Under 35
in 2013. His company’s program for leasing solar systems helped reduce
initial costs for consumers, driving sales and making his company the
current leader in rooftop solar installations in the U.S.
Why SolarCity Is Succeeding in a Difficult Solar IndustrySolar
panels contribute only about 20 percent of the total cost of a solar
system. Most of the money goes to companies, like SolarCity, that
install the panels and connect them to the grid. Back in 2012, right
when they filed for an IPO, we reported that SolarCity’s success might
be partly due to staying out of solar-panel manufacturing. Ironically,
that’s the market it’s breaking into with its new gigafactory.