Tesla’s Disruptive New Plan to Power Your Home

by | published February 17th, 2015

Two eye-opening announcements prove that renewable energy is no longer at the mercy of the price of oil.

Both involve solar power, which I find increasingly attractive in today’s markets.

The first is a major test of a joint project between Tesla Motors Inc. (NasdaqGS: TSLA) and SolarCity Corp. (NasdaqGS: SCTY) involving 500 California homes.

Sources have told me they expect this test to be the final “proof of concept,” followed by wider applications in both residential and commercial uses.

The lynchpin between the two is a family connection.

Tesla’s CEO is Elon Musk, one of the most innovative entrepreneurs of our time, while his cousin Lyndon Rive is the CEO of SolarCity. Musk is also SolarCity’s biggest shareholder.

Now the two are coming together in hopes of solving the industry’s biggest roadblock…

Solar Power Comes of Age

Tesla, of course, needs very little introduction. The California-based company has a very visible position in cutting-edge electric cars.

SolarCity, on the other hand, is the market leader in residential solar power installations. In the third quarter of 2014, SolarCity led the pack in this portion of the business by grabbing 39% of the market. Meanwhile, SolarCity’s next-closest competitor came in at 16%.

The two market leaders are now combining some of their operations in a very serious attempt to bring solar power into more consumer areas. In short, SolarCity is working with Tesla to make rooftop panels that are fitted with Tesla batteries.

Now a major test is underway in California that may usher in a new age of residential solar battery use.

The California test will utilize a solar battery with the ability to power a home for two days in the event of a blackout. In everyday use, the unit is expected to allow homeowners to store solar-generated power for use during high-cost periods, giving them the flexibility to use the conventional grid for cheaper, off-peak electricity.

Storing generated power for use at other times – in short, perfecting a new line of cost-effective batteries – has been the industry’s single biggest hurdle.

So the California residential test may well usher in a whole new ballgame. Considering the batteries from the Tesla-SolarCity venture (involving more than the California test) utilize a new generation of silicon batteries, rather than relying on rare earth metals or lithium, is also a plus. This type of approach is already well advanced, and is based on considerable familiarity and history.

It also doesn’t hurt that Tesla is building the biggest battery factory on the planet right now. Dubbed the “Gigafactory,” the plant is expected to have a dramatic effect on the energy storage market, helping to bring battery costs down by as much as half by 2020.

So while the initial price of these installations may come in high, as with any generation-changing new technology, the cost will eventually come down. What’s more, there may be some credits and other inducements provided by the companies to stimulate usage.

This development, combined with the recent decisions by Apple Inc. (NasdaqGS: AAPL) to power its new Pentagon-like headquarters via solar and Google Inc. (NasdaqGS: GOOG) opting for wind power for its San Francisco Bay Area base, show that renewables are now moving into all aspects of electricity end use here in the States.

India Breaks Ground on the World’s Largest Solar Plant

The second major development for renewables is unfolding halfway around the world.

India has announced a major push to provide 15% of its electricity needs from renewables with an initial push into solar power, which is unfolding right now. It’s the first high-profile effort to provide concrete plans for a major Asian advance into solar power distribution.

The Times of India reported yesterday that the construction of the world’s largest solar power plant has begun in the central Indian Rewa district, within the state of Madhya Pradesh. The plant, a joint venture between state-run PSU Urja Vikas Nigam and the Solar Energy Corp. of India, will provide 750 megawatt of electricity. Once online, the plant will be 36% bigger than the largest plant currently in operation.

The current world leader is the 550-megawatt Desert Sunlight Solar Farm, which just opened in California’s Mojave Desert. Situated on 3,800 acres near Joshua Tree National Park, the plant produces enough energy to power 160,000 homes.

But the Indian push into solar power hardly ends there. The government has plans for two dozen solar farms strategically placed throughout the country.

In all, the State Bank of India has committed resources for the development of 15 gigawatt of solar power by 2020. The objective is to provide a full 15% of the nation’s energy needs from renewable sources within five years.

To be sure, there are some doubts that New Delhi can pull this off. For one thing, the price tag is very debatable. For another, the national electricity distribution grid is in a sorry state, and would require significant, pricey, and (at the moment) an unspecified amount of investment to be able to shoulder the anticipated new power load.

Still, with the Chinese committed to a similar 15 gigawatt goal from solar by 2020, Germany’s decision to end its reliance on nuclear power, and the continued growth pattern in the U.S., one conclusion is already abundantly clear.

The future of solar, wind, biomass, geothermal, and other renewables is longer dependent on the price of crude.

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  1. Malcolm Rawlingson
    February 17th, 2015 at 15:38 | #1

    There is a slight problem with all of this Kent. While indeed it may be advantageous for homeowners to flatten their demand curve by storing solar power in batteries but, as you said, it depends on the grid being available when the homeowner needs it. The grid is simply an interconnection of power producing devices where supply exactly equals demand all of the time every time. If you continue to destroy the profit making ability of large power producers there will be no grid. When your battery goes flat at night (sun does not shine at night as I recall) and there is no grid one is up the creek without the proverbial paddle. And of course what people forget is that what works in sunny California does not work in most other places in the world. I cannot imagine what New York and Maine would be doing right now if their main source of power was frozen up windmills and solar panels covered in feet of snow. Tesla is a hyped up company funded by Government money and sooner or later even Elon Musk will run out of cash. For many parts of the world (like Canada) electric cars are not going to replace internal combustion engines any time soon.
    Too cold…way too cold. Minus 26 centigrade here as I write….cannot imagine a battery operating very well at those temperatures.
    A long way to go yet.

  2. Anthony Hills
    February 17th, 2015 at 16:10 | #2

    By flattening the curve and producing power during peak demand times it could let power companies build less plants for peak backup power which reduces costs for them. A lot of plant capacity sits idle at night. A device to use the batteries during peak times would be helpful for power companies and utility customers providing there is a large enough discount for night time power. An efficient charger would also be required to avoid losses.

  3. February 17th, 2015 at 16:30 | #3

    The need for change is always in the past, the ability to change is always in the present, and the hope for change is always in the future, having said that solar, wind and ocean currents, answer the need of humanity’s past need for energy and shall meet the hope that future generations have for renewable energy!-Michael McKinzy, Sr.-Born to do battle, drafted at birth.a.ka.Warrior

  4. Stan Berman
    February 17th, 2015 at 17:03 | #4

    This was truly a well written and informative article. Kent you and your team are very special.

  5. Dusty
    February 17th, 2015 at 17:25 | #5

    I would like to see a hybrid solar system. Power plants like the ones now providing electricity through the grid and solar panels leased from and maintained by the power company on every rooftop. In daylight the solar would supplement the grid and reduce the cost of power to the final user. The solar panels would be monitored by a local system (Raspberry Pi with sensors in each panel??) that would notify the power company if something went wrong.

    Big banks of batteries might take over from diesel generators for local emergency service where any power interruption would be unacceptable.

    My winter electric bill doubles in early summer and triples in late summer. If the solar system could reduce that monthly cost by half it would be totally worthwhile. Then multiply by the number of houses, apartment buildings, also a substantial part of electric power used by corporations for lighting and air conditioning; across at least half the nation and 7 to 10 months of the year. ?????

  6. Robert in Vancouver
    February 17th, 2015 at 17:37 | #6

    If I may add to Malcolm’s comments – Electrical grids in North America were designed for predictable single source energy supply from traditional sources such as hydro, nuclear, coal, and nat gas power plants.

    The grids can’t be modified to accomodate wide spread use of solar power. So we would have to replace the grids, and that isn’t going to happen because of the huge cost.

  7. February 18th, 2015 at 00:00 | #7

    The problem here is we are the boss (citizens)
    Our government which was its main mission was to protect the states from foreign invaders. It has now gone into business and help businesses to achieve renewable energy. After they have done that, which our tax dollars were used, they charge you for that new energy that you have paid the research for. I guess this is good as it creates jobs for the renewable companies in the so called third world. Put the profits in a off shore bank to save on taxes. It is allowable under IRS rules made by our congress so it must be fair. How good it is to share with the rest of the world our technologies. Yeah

  8. Malcolm Rawlingson
    February 26th, 2015 at 18:31 | #8

    @Michael McKinzy Sr
    Michael, Unfortunately the number of people on this planet in the times you speak of were a few hundred million. Now we are 7 billion and increasing exponentially. I also do not recall times in the era of sail when air conditioners were available to cool millions of homes at the flick of a switch. Times Sir have changed. To think that wind and solar could ever match the demand now and even less likely – the demand in the future – is pure pie in the sky. It cannot. If you do not want to use fossil fuels then only nuclear power has even a chance of meeting the demand without burning something.
    To promote weak distributed power sources as capable of meeting the electricity demands of 7 billion people is pure nonsense.

  9. Malcolm Rawlingson
    February 26th, 2015 at 18:44 | #9

    Dusty, I appreciate your thoughts but who is going to clear the snow and ice off your roof in the winter to allow the panels to operate? Also please remember that most city dwellers (the places where most of the North American population lives) do not have individual access to roof space. In a 50 storey high rise there is but one roof area for hundereds of appartments below. It could never work for apartment dwellers. My great fear is that the large power stations and the companies that own them are being made uneconomic entities and that leads to prices increases (you are seeing that now) and eventiual closure of the power plants. Then there will be no grid. Powering North America using Sun and wind is a utopian idea that is doomed to failure. For example, let’s say the Sun shines 12 hours per day (at full power – BIG assumption) and does not shine the other 12 hours of the day. In order to run your house (assuming you have a roof – another BIG assumption) on solar panels you will need one set of panels to power your house with its electricity needs for the day PLUS you will need another set to charge your battery. Now you have just DOUBLED the capital cost PLUS you need more capital to buy a storage battery which likely lasts only 5 years. The only reason that solar panels are able to function is they use the grid to take the surplus energy during the day and draw from it when there is insufficient at night. Without the grid those systems become inordinately expensive and unreliable.Of course if Uncle Sam in the US or Martha Maple in Canada is willing to pay for it all -[ well wonderful – but as far as I know the only money either Government has is yours and mine.

  10. paul francis
    February 27th, 2015 at 13:09 | #10

    Gerardine Botte’s discoveries concerning the hydrolysis of ammonia made a big splash (whom am I kidding — of course the pun was intended) back in ’09, but I fear that big oil may have gotten her to sign on the dotted line so as to put on an upper shelf the threat which such signified to its interests. Some Britons have gone forward with similar experiments. We don’t need the sun shining to have batteries which draw upon the chemistry within separated wastewater digesters. Perhaps this consideration is one Dr Moors has already lent his knowledgeable mind to address. If so, I’d love to read what he’s had to say.

  11. June 30th, 2015 at 15:10 | #11

    @Malcolm Rawlingson
    Well if there were 7 Billion people with need for access to electricity then we would have a problem on our hands, however, given fact that in most third-world country people have no or very little power, I think you paint a doom and gloom picture that does not speak the truth about the future!-Michael McKinzy, Sr.-06-30-2015

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