The Dawn Of The Electric Vehicle/Solar/Battery Company

It’s official: Tesla shareholders approved a merger with SolarCity. Despite financial analysts’ concerns, the basic concept makes sense: electric vehicle drivers will want solar panels to make fueling the vehicle at home cheaper. Solar customers will be interested in electric vehicles because they already have cheap fuel at home. So there are big marketing/customer acquisition benefits.

01-2012-tesla-model-s-fd-1347336745But more importantly, as rooftop solar sales decline and state regulators pull back on incentives, batteries will be crucial to keep solar competitive. Why? Right now most rooftop solar customers use the grid as their battery. I have panels on my home, for example, and when I have surplus electricity in the summer, I export to the grid and get a retail credit for that surplus. I then apply that retail credit to my grid usage in the dark winter months, and “true up” after a full year accounting.

But regulators are doing away with that bargain already in places like Hawaii and Nevada. Soon new solar customers are going to need an actual battery to store their surplus solar. It would be the same model that I have, but you no longer need the grid to store your electricity, and you don’t need regulators requiring utilities to do so. Instead, with a big enough battery, you capture and use all your solar energy on site.

The one question I have is whether the economics are still good enough to encourage people to purchase both a battery and solar array. I doubt a typical Tesla home battery will be big enough to capture all the surplus energy in the summer months, meaning some power will be lost that the grid would otherwise have used. But as battery and solar prices decrease and electricity rates increase, the deal could be good enough.

Either way, the merger represents a sea change in our electricity system, packaging transportation and home energy use in a way we’ve never seen. If all goes well for the company, Tesla could one day become a monopoly like we’ve never seen, with a gas station, utility, and car company all rolled into one.


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