Tesla Solar Is Another Necessary Piece Of The Musk ‘Master Plan’ Pie

Tesla Model X and Solar Roof

JUL 14 2017 BY EVANNEX 20


Tesla “Solar Roof” House powering an upcoming Tesla Model 3


Electric cars and rooftop solar panels go together like red beans and rice. CleanTechnica recently surveyed over 2,000 EV drivers in 28 countries, and found that 28-40% of respondents said they had home solar panels. Solar power was part of Elon Musk’s Master Plan from the start. He helped Lyndon Rive to launch SolarCity in 2006, and after a decade of ups and downs, the company became part of the Tesla empire.

Tesla Solar Roof

Tesla Solar Roof (Textured Glass shown/available now)

The new subsidiary, now called Tesla Solar, is offering its own branded solar panels in Tesla stores, including a new low-profile panel made by Panasonic exclusively for Tesla. The company’s new solar roof tiles are now on sale as well, and deliveries are expected to begin soon. It’s the final piece of Tesla’s complete energy ecosystem. You can generate power, store it, and burn it up in Ludicrous fashion – all using Tesla products.

In a recent in-depth article in Fast Company, Austin Carr tells the history of SolarCity and explores the rationale for the merger. The SolarCity that Tesla acquired in 2016 is a very different company from the one that Elon Musk’s cousins, Peter and Lyndon Rive, founded in 2006. In a way, the original concept was similar to those behind Tesla and SpaceX – the idea was to revolutionize an industry by changing the cost equation of the product (Tesla went through three iterations to bring the cost of an EV down to a mass-market level, and SpaceX slashed the cost of space travel by making rockets reusable).

*This article comes to us courtesy of Evannex (which also makes aftermarket Tesla accessories). Authored by Charles Morris.

The main barrier to solar adoption was, and still is, the upfront cost. A solar system can save customers money, but most don’t have the capital to purchase the system. SolarCity sidestepped this problem by offering a lease, whereby homeowners could have a system installed with no money down, and make lease payments that would be lower than their existing utility bills. The company also made several moves to squeeze costs out of the installation process. For one, it acquired Zep Solar, a startup that had developed an innovative panel-mounting system that cut installation times.

Tesla Solar Roof

Coming in 2018 Tesla Solar Roof In Tuscan Tiling

By the time SolarCity went public in 2012, it was riding high – sales were doubling every year. In early 2014, it had around 70,000 customers, the stock price peaked, and Lyndon set a Muskian goal of a million installations by 2018. However, signs of trouble soon appeared. Aggressive sales tactics, exotic financing instruments, cancelled lease agreements, and increased competitive pressure all created problems for the company.

Meanwhile, as rooftop solar became more popular, electric utilities began fighting back, using their political influence at the state level to scale back incentives and invent new fees. In several states, including sunny Florida, SolarCity’s leasing model is illegal, and the utilities’ cozy relationship with state regulators insures that it will probably remain so. In Nevada, utilities hit homeowners with a reduced net metering rate and a new annual fee, causing SolarCity and other operators to pull out of the state altogether (in late 2016, the utilities softened the blow by agreeing to grandfather in existing solar customers). In late 2015, federal lawmakers unexpectedly extended the 30% solar tax credit – good news in the long run, bad news in the short, as it eliminated the urgency for SolarCity customers to install systems before year-end.

In February 2016, Musk decided the time was right for Tesla to formally adopt its sister company. A few months earlier, Tesla had introduced the Powerwall, but it soon found that the sales and installation processes were “incredibly clunky and awkward,” as Musk told Fast Company. Tesla had no installation teams, so Powerwall customers had to rely on local independent installers. To assemble the complete energy ecosystem, they would have to turn to SolarCity or one of its rivals. “It was like having to buy your laptop and your laptop’s hard drive separately,” said Musk. It would make more sense for Tesla to control the experience from start to finish.


Tesla solar panels and Powerpack battery storage (Image: Tesla)

Furthermore, Musk is known for taking an interest in the details of the products he sells, and he places a high value on aesthetics (it’s easy to forget now, but one big reason for the success of the Roadster was that it looked like a stylish sports car, not like a boxy, gas-saving “dorkmobile”).

Since the acquisition, Tesla designers and SolarCity engineers have been collaborating closely on the development of the Solar Roof, something that wouldn’t have been practical when the two were separate public companies, required to operate at “arm’s length.” “Every time we wanted to do something, it had to go through two org committees. It was incredibly slow,” Musk says. “Now we can make decisions immediately instead of it taking a month.”

The company also hopes that vertical integration will give it a huge advantage. Other companies have attempted (or are attempting) to produce a solar tile. But, as Peter Rive puts it, “If you just created a solar shingle, you’re kind of f***ed. I don’t think anybody but the combination of SolarCity and Tesla can pull this off.”

Above: A look at Tesla’s solar roof (Youtube: Bloomberg)

Tesla and SolarCity shareholders seemed to believe that they will indeed pull it off – they approved the $2.8-billion merger with a majority of 85%.

Of course, not everyone is convinced. Many in the financial media believe that the real rationale behind the deal was to bail out SolarCity. But Lyndon Reeve isn’t having any of it. “It is crazy to think that we needed any type of bailout,” he told Fast Company. “We had massive recurring revenue and access to liquidity since we had one of the highest-volume traded stocks in the solar industry. If we needed to raise capital, we could have.”

More skeptics are to be found in Buffalo, where Tesla is building a new plant – to be called Gigafactory 2 – to produce solar panels and the new Solar Roof tiles. SolarCity inherited the factory when it acquired Silevo, a solar technology and manufacturing company, back in 2014. The local and state governments were delighted to welcome a high-tech manufacturing facility to the 88-acre site, a typical link in the Rust Belt, and ponied up $750 million in funding. SolarCity later brought in Panasonic, an experienced solar panel producer, which invested $256 million.


Tesla Solar Buffalo facility (AKA Gigafactory 2)

The Buffalo News notes that the factory has fallen behind schedule, although equipment is being installed, and there are signs that it’s getting closer to opening. “The delays so far largely stem from ownership changes, SolarCity’s deteriorating finances and shifts in the technology the plant will use and the products that the factory will make. With those issues now largely settled under Tesla’s ownership, the plant appears to be on track to open sometime this year, first making conventional solar panels and then the new solar roofing tiles that Tesla introduced last fall.”

It all sounds like a typical chapter in the turbulent tale of Tesla: hyper-ambitious goals, inevitable delays, huge risks and an equally enormous reward – not only for Tesla, but for workers in Buffalo and energy consumers all over the world. Rooftop solar is currently on the edge of a major tipping point. Costs are dropping, but they still aren’t quite at the point where the numbers work out without subsidies for most homeowners. What’s really needed to break through that barrier is a more efficient solar panel, which would reduce the labor costs to install a complete system – precisely what Tesla Solar will be producing in Buffalo.


Source: CleanTechnica, Electrek, Fast Company, Buffalo News

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers. Our thanks go out to EVANNEX, Check out the site here.

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20 Comments on "Tesla Solar Is Another Necessary Piece Of The Musk ‘Master Plan’ Pie"

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Comments aren’t loading for me. Anyway, the roof is obviously delayed and behind schedule but I think it is a very cool product. Never mind the costs. Aesthetics matter. People buy granite counter tops all the time. My brother in law does customer cabinet making and regularly installs cabinets and counters that cost more than one of these Tesla roofs.

I think you are right on the good looks selling. I have eco minded friends who won’t do the solar roof because it looks “bad”. It’s very much like the EV. They’ll consider a Tesla but not a Bolt because of the looks issue.

$40 per square foot for shingles? That sounds crazy high, like 10x too high.

Ah – asphalt with solar.
I misread the bar graph

One SolarCity spokesman says:

“It is crazy to think that we needed any type of bailout”… “We had massive recurring revenue and access to liquidity since we had one of the highest-volume traded stocks in the solar industry.

A second spokesman says:

“The delays so far largely stem from ownership changes, SolarCity’s deteriorating finances…”

I guess Spokesman #2 didn’t drink the Kool-aid! 😉

I don’t know how close SolarCity was to needing a bailout to prevent bankruptcy, but unless all the reports were wrong, then its business model was certainly failing.

Well, if they didn’t need bailout, they wouldn’t have the need to issue a solar bond at 6.5% for 18 months… No healthy company needs to pay that kind of premium to borrow money.

Er… no, they are talking about 2 different things!

Did SC need ‘bailing-out’? The answer surely lies in what Tesla paid for SC compared to SC’s notional value.

Evannex is starting to sound like a Tesla pump site. Why does insideEV need to keep publishing its pumping article?

Related to the article, SolarCity business wasn’t continuing because there are other solar installers that are cheaper and better. Before their IPO, their installation price was competitive. But after their IPO, the price wasn’t. It was more expensive than many of its competitors.

as far as blaming on the netmetering change goes. Well, CA has been dumping or paying other states to take power because of too much peak Solar generation. No reason to blame utilities for not cutting back on net metering incentives. If we are all switching to solar, then the peak would have been night and off peak would have been 10am to 4pm.

Stop the FUD.

Check CA ISO’s site. You’ll see that peak solar production + regular production still didn’t produce enough power without the aid of peaker plants.


I have solar city panels and know exactly its limitation.

Sure, there are days where the peak isn’t enough when it is super hot (which also reduces your peak solar panel generation) and demand of AC goes thru the roof.

But there are plenty of other days where CA had to pay AZ to take the excess and shut down its own generation.

Look up the LA times article on that.

If you can’t, I can find it for you.

Here, I find it for you. Read that.


As it shows, for any given day, we can have more or less of solar generation. But on the days that we can produce more than we consume, either we have to ramp down solar generation or we have to shut down gas plants.

If more solar come online, there will be less and less “peak” incentives to kick in more peaker plants. Recent heat wave is more an exception where 100 degree weather actually add far more load requirement than usual so even the installed solar isn’t sufficient for it.

“Evannex is starting to sound like a Tesla pump site. Why does insideEV need to keep publishing its pumping article?”

Every time InsideEVs runs an Evannex article, they include a disclaimer at the bottom. In this case, there is also a note a few paragraphs from the top stating “*This article comes to us courtesy of Evannex (which also makes aftermarket Tesla accessories).”

Obviously a website that sells aftermarket Tesla accessories isn’t likely to say anything bad about Tesla, but I don’t find Evannex’s articles any more biased in favor of Tesla than many seen here on InsideEVs.

Nobody is forcing you to read them, MMF. They are clearly labeled with the “EVANNEX” byline, if you want to skip those.

Personally I often the Evannex articles which InsideEVs choses to cover to be interesting, sometimes very interesting. I certainly hope InsideEVs will continue to share them with its readers.

“Well, CA has been dumping or paying other states to take power because of too much peak Solar generation.” It’s tricky. Bonneville Power Authority battles the wind power generators it is forced to accept due to regulations because it can sell hydropower to CA for much more than it can sell the wind power so it shuts down the wind power. It does this for two reasons, to make money and kill competition (wind power) not because BPA has an “excess of wind power”. Same situation in CA. They’d rather sell high cost power to CA and give away solar. As for utilities and net metering. They hate it. It is forced on them by regulations to promote sustainable power. They are successfully fighting back with help from GOP at state and national level to cut back net metering and kill solar power industry. EVs, solar power, sustainable power in general are going to be fighting government and utility head winds over the next four years in the US. Solar City/Tesla’s business model is based on needed a new roof so that the extra cost of solar tiles is offset in the calculations by the cost for a new roof… Read more »

“No reason to blame utilities for cutting back on net metering incentives” was quote from ModernMarvelFan.

It is in utilities interest to cut back but it is public interest to increase net metering. Solar power in particularly hurts the utilities business model as it provides power on hot sunny days when utilities make their most money charging higher rates for maximum power from their monopoly on power plants.

Net metering requires government regulation as it is for public good.

I was watching Tony Seba talk last night and he referenced a utility in New York that 34% of their assets were used 6% of the year. That is a lot of idle assets that he claimed costs .20/kWh. Battery storage will beat that price very soon.

I doubt battery storage of wind and solar power is going to be competitive with cheap fossil fuel. Mr. Seba’s comment sounds interesting but it is meaningless. Apply it to solar or wind or the battery and you can say 50% of assets site idle 50% of the time.

The reason for requiring battery storage of wind and solar is that it provides a sustainable (non-polluting) power source necessary to preserver the planetary life support system that has been damaged by pollution. Not because of simple cost advantages.

After recently getting a solar system installed, I’m glad that I didn’t wait for the Solar Roof, like I initially considered. After finding out what most California city codes require, getting a permit for their system would be a nightmare. Unless Tesla can get code requirements changed they may find few can legally install them on their houses.

If you did, then you would know that your peak solar generation time of 10am to 4Pm doesn’t really line up with the peak time of new PG&E TOU-A rate of 3pm to 8pm “peak schedule”. That clearly shows that peak solar doesn’t match the peak grid demand!

Thanks for interesting link. It looks like new gas fired plants are definitely not needed in California.

A March 2017 state report showed why critics are confident that the area will be fine without a new plant: The need for power from Redondo Beach’s existing four natural gas units has been so low, the state found, that the units have operated at less than 5% of their capacity during the last four years.

Sounds like California is about ready for some serious storage capacity coupled with TOU pricing.