Elon Musk harnesses the energy of the sun: Solar City will build the world's largest photovoltaic panel factory. SolarCity - the foundation of a solar city from Elon Musk

• Translation

Elon Musk's Tesla and SpaceX are impressive. But the company he founded with his brothers, SolarCity, could change the world.

One cannot but agree that the person of Elon Musk, as well as his bold projects, are of genuine universal interest: just look at the electric car company Tesla Motors and the private business SpaceX for creating space rockets. And it is not surprising that Mr. Musk’s biography became a bestseller this year. But for me, the most important and interesting venture of a South African immigrant was one that received much less media attention. This is SolarCity, a company whose goal is to dot the rooftops of American citizens with solar panels.

Musk's work on Tesla may evoke some associations with the work of Henry Ford. However, SolarCity makes the parallel between these two successful businessmen much more obvious. Musk himself is the CEO of the company, the concept of which he pitched to his two cousins: Lyndon Rive, who currently serves as chief executive officer, and Peter Rive, Lyndon's brother, who is currently chief technology officer. director of the company.

When it comes to creating new industries, developing new technology is just the beginning. As noted earlier, innovation in business models and processes can be as important as the eureka moment itself. Henry Ford did not invent the internal combustion engine. But he put together and perfected a combination of processes, methods and tools. A super-efficient assembly line, a full production cycle, enormous scale, bold personnel policies, wages for workers of $5 a day and advanced financing techniques revolutionized the automobile industry, turning the car from an expensive toy for the rich into a familiar element of the lives of middle-class citizens.

Now Tesla has opened a new milestone in car sales - cars are delivered directly to customers without the participation of dealers. And the company is working to ensure a full production cycle, building its own battery production plant. But essentially the company sells a small number of incredibly expensive sports cars to very rich people. Tesla Motors is currently at the same stage of development that Ford Motor Co. was at. in 1903 before the Model T appeared.

SolarCity, which I first wrote about six years ago when it had just a few hundred employees, has a smaller total market value than Tesla ($5.7 billion versus nearly $34 billion). However, a case can be made for SolarCity, which has the potential to develop into a more economically powerful company. The company employs about 12,000 people and has 500 new job openings every month, Lyndon Reeve recently told me. During this year, every month 12 thousand people were added to the army of SolarCity clients in the United States. Already at the end of July this year, it was reported that the number of company clients amounted to 262,495 people as of June 30. (Both companies typically report losses rather than profits.)

SolarCity, which set out to equip the roofs of houses and buildings with solar panels, did not invent the solar modules themselves. But like Ford Motor Co., the company has knitted together and perfected a combination of functions and disciplines: efficient assembly, economies of scale, vertical integration and innovative financing techniques that could make mass adoption a reality. And SolarCity is constantly looking for and finding ways to expand its market.

Let's consider. A few years ago, the high cost of solar panels was a prohibitive deterrent to their mass adoption; homeowners would have to shell out $30,000 to $50,000 right away in exchange for the savings this solution would bring them over the coming decades. So SolarCity developed a strategy based on the rental concept, which allows people to install batteries on the roofs of their homes at no cost to them and immediately benefit from the money they save. According to GTM Research, 72% of the total installed solar panels were leased. SolarCity accounted for 34% of this number, making the company the clear market leader today.

The ability to save on electricity without having to make an initial investment is an attractive proposition. But creating such systems is a very capital-intensive endeavor. A company like SolarCity faces the same problem that regular customers face—having to make huge capital investments without seeing the revenue (in the form of tax credits, leasing profits, or electricity bills) appear for weeks or even years. It's a money-losing position—at least in the early years (SolarCity had a net loss of $375 million in 2014). To continue its growth, the company developed another new set of financing techniques. It makes deals with major Wall Street firms such as Goldman Sachs to finance the construction of thousands of systems, and packages leasing offerings into special packages that can be purchased by private investors.

Installing solar panels on rooftops is a business where it is difficult to reduce costs by increasing scale. The fact is that there is no mass demand for this offer yet: 30 panels per roof here, 25 there... But SolarCity found a way that turned this retail business into something resembling a wholesale enterprise. The company entered into a series of deals with the Department of Defense to install solar panels on the roofs of military personnel: 6,500 homes in Hawaii and another 6,000 in San Diego. In California, SolarCity's largest market, the company has built a network of 40 warehouses that serve as distribution points for single projects. In an attempt to organize the entire production cycle, Elon Musk's enterprise last year acquired solar panel manufacturer Silevo. Now SolarCity is building a huge factory in Buffalo, New York, that will supply cheap panels for later installation.

Now the company is operating in a big way, using experience and the latest financing techniques to break into a new market: small businesses. For huge companies with good revenue and many buildings with giant roofs (like Wallmart or Ikea), installing solar panels is an obvious solution when the offer is tempting. Solar installation companies want to work with these customers because installing an array of 5,000 panels is much more cost effective than building 100 arrays of 50 panels. This has left behind small business owners who can offer much smaller roofs and have significantly less income. “Typically solar installers are not interested in a commercial system under 500 kilowatts,” Lyndon Reeve told me during an interview in late July.

A week ago, SolarCity announced that it would offer leasing to small businesses. The terms are similar to those the firm offers to homeowners: there is no capital investment required at the outset, the customer immediately begins to save 5 to 25 percent on energy, and also receives a guarantee that rates will not increase during the 20-year lease term. The minimum size of systems can be 30 kilowatts (100-125 panels). “We built the infrastructure to be able to install the panels ourselves,” Reeve told me. With panels installed on thousands of rooftops, SolarCity has developed processes to quickly install rooftop batteries at low fixed costs. In addition, SolarCity combines financial innovation—solar leasing—with another. For example, in California, businesses can participate in separate energy programs in which the property owner can receive funds to make some improvements and then gradually pay a special tax - something like a property tax.

Instead of trying to establish itself in existing markets, as Tesla is trying to do, SolarCity is turning to innovation to create entirely new markets, as Ford did. Of course, between 2015's SolarCity and Ford Motor Co. Model 1915 has a number of important differences. Model T sales were largely independent of government subsidies. SolarCity, like other solar installation companies, has benefited greatly from the federal tax credit to finance long-term solar investments (this program ends in 2016). Henry Ford quickly amassed a huge fortune even as he invested in production facilities and hired thousands of employees. Does SolarCity make a profit? More likely no than yes. At least as of now. The company reported second-quarter revenue rose 67 percent year-over-year, while operating losses were $132 million. However, the company's big advantage is that it is developing at a time when funds are available to finance the construction of solar panel arrays. Late last month, the company announced it planned to raise another $124 million through lease payments from its customers.

According to The Wall Street Journal, the leadership of the energy company Solar City, headed by Tesla Motors and SpaceX CEO and founder Elon Musk, is discussing the construction of a factory for the production of photovoltaic panels. Mr. Musk’s grandiose plans include not just opening a new enterprise that will reduce the price of solar panels, but also subsequently tripling the usable area of ​​the Ivanpah solar power plant operating in the United States.

The ultimate goal for Solar City will be to reach 1 GW of generated power from solar panels. To implement the plan, company representatives are already actively discussing with New York officials about the construction in the state of not only the largest plant in the United States and the world, but also the creation of a solar farm near the city to provide citizens with clean electricity. To reduce the cost of producing solar cells, the acquisition of the assets of Silevo was recently announced. The latter is known for having been engaged in the development and production of photovoltaic panels with high efficiency for a long period of time. The combined potential of specialists and production facilities will significantly reduce the cost of production and make solar electricity accessible to every resident of the United States.

Solar City was founded by Elon Musk's cousins ​​in 2006. Unlike other companies involved in the manufacture, sale and installation of solar panels, Solar City’s activities were initially based on radically different operating principles. It's no secret that some of Elon Musk's projects are not at all designed to generate excess profits, but are implemented to strengthen positions in a new market segment and gain experience in a particular industry. Solar City was one such project.

Imagine that you would like to join the ranks of solar energy users and generate electricity for your home using highly efficient panels. And this is where Solar City comes to the rescue, whose specialists will take care of performing all the necessary calculations and, together with the client, sketching out the design of the panels so that they look harmonious against the background of your home or office building.

Next, the installers will install and connect all the necessary equipment, for which you, in turn, essentially pay nothing. It sounds too far-fetched to be true, but the company's operating scheme really corresponds to the stated principle. Solar City's interest is in introducing Americans to an alternative energy source, even while bringing in outside investors to make the deal happen. And the future owner, who has received all the equipment and without spending a cent, will simply begin to pay monthly not for the electricity generated at state-owned nuclear power plants or thermal power plants, but for the electricity generated by his own solar panels.

That is, in this case, there is such a thing as leasing: you pay for installation work, but do not pay for fairly expensive equipment. In the future, your costs will be directly proportional to the reading of the electric meter. As a result, the benefits become obvious:

1. Significant savings on monthly energy costs;
2. Caring for the environment;
3. A very effective advertisement for such a source of electricity as solar panels, as well as the operating principles of the Solar City company itself.

Such a simple and ingenious step allowed Elon Musk to overtake his closest competing energy companies in an instant. After Solar City also acquired Silevo, the deal with which is estimated by analysts at up to $400 million, in the near future it will become possible to compete equally with manufacturers from the Middle Kingdom. Solar energy must not only be equivalent in cost compared to other energy sources, but also become truly widespread.

SolarCity- bet on innovation: another Elon Musk...the post could end here, because not believing in his success means not believing in anything! So this won't really be a review...

General

The site of the company www.solarcity.com

Sector: Semiconductors

Industry: alternative energy

SOLARCITY CONCEPT

The company plans to build one of the world's largest solar panel factories in upstate New York.

On the agenda is the so-called. The company, co-founded by Tesla CEO Elon Musk, wants to cover every aspect of solar energy delivery, from design and manufacturing to sales and installation of ancillary equipment. Essentially, this is the Apple style - only in the field of solar panel manufacturing.

At the same time, SolarCity's ultimate goal is to sharply reduce prices. In June, Musk explained that company officials were committed to having "solar energy compete on an unsubsidized basis with fossil fuel energy." (The company was also founded by brothers Lyndon and Peter Reeve, who currently manage its operations).

Is this doable? SolarCity has found success with its current business model, offering customers installation of rooftop solar panel systems with no upfront costs, subject to monthly dues paid over many years. The company currently accounts for 25% of all solar panel installations in American residential buildings. According to the plan, by 2018 the number of customers should increase to 1 million. Then SolarCity will be able to move on with peace of mind to the production of its own panels for these systems, thereby optimizing operating costs.

Will solar energy ever be able to compete with fossil fuels?

Making solar energy a competitor to fossil fuels is certainly no easy task.

Installing solar panels on the roof of your home is still one of the most expensive ways to generate electricity. On average, this is about twice as expensive per kilowatt-hour as building a new natural gas power plant. (Federal subsidies reduce the price of solar power, but those tax credits may be running out). This explains why solar energy accounts for only 0.2% of total electricity production in the United States.

However, on the other hand, solar module prices have fallen sharply in recent years, driven by technological innovations and the recent manufacturing boom in China. The cost of installing solar panels has also decreased significantly:

All of these trends have led to predictions that solar energy could eventually become a viable competitor to fossil fuels in many parts of the United States, even without government subsidies.

For example, analysts at the Rocky Mountain Institute (USA, Colorado) are confident that by 2030, and maybe even by 2020, tens of millions of home owners throughout the United States will decide that it is cheaper to use solar energy (we are talking about the so-called “grid parity” ). But everything is not so simple.

First, no one can unequivocally state that solar energy prices will continue to decline rapidly in the future.

Secondly, there is the problem of storage. Due to the increasing popularity and proliferation of solar energy, we will likely have to figure out how to store the electricity generated by the sun for later use during the dark hours. (By the way, it’s worth noting that Tesla is building a giant solar panel plant for its cars - and some of this production will be operated by SolarCity).

Moreover, some electric utilities are resisting the solar energy boom, in part because such changes call into question the effectiveness of their business strategies. Utilities make their money by selling electricity to homes and businesses, so the ability to generate your own electricity will certainly not appeal to some. Some services have gone so far as to charge additional fees to solar panel owners, thus forcing them to pay for grid maintenance as well. Apparently, this war is only gaining momentum and may well slow down the development of solar energy.

Why SolarCity is switching to manufacturing

The problems raised cannot be solved immediately, and therefore for now SolarCity has focused on the first task: making solar panels cheaper and making them more efficient.

First, the company acquires Silevo shares for $350 million. Silevo is known for its high-efficiency Triex modules, and in a conference call, SolarCity CEO Peter Reeve said panels with 24% efficiency are also on the cards.

More efficient panels will help reduce labor and installation costs since far fewer panels will need to be installed. This way the whole system will become cheaper:

Second, SolarCity claims that negotiations are underway to build a giant solar panel plant near Buffalo, New York. As stated in the company blog:

“With a target capacity of over 1 GW over the next two years, it will be one of the largest solar panel manufacturing facilities in the world.”

Why factories? Musk noted that the company plans to install "tens of gigawatts per year" over the next decade and needs serious manufacturing capabilities to ensure a steady supply of panels. The company also hopes that savings from the planned increase in the number of factories will be the key to lower solar panel prices.

INSTALLATION AND USE PRINCIPLE

Imagine that you would like to join the ranks of solar energy users and generate electricity for your home using highly efficient panels. And this is where Solar City comes to the rescue, whose specialists will take care of performing all the necessary calculations and, together with the client, sketching out the design of the panels so that they look harmonious against the background of your home or office building.

Next, the installers will install and connect all the necessary equipment, for which you, in turn, essentially pay nothing. It sounds too far-fetched to be true, but the company's operating scheme really corresponds to the stated principle. Solar City's interest is in introducing Americans to an alternative energy source, even while bringing in outside investors to make the deal happen. And the future owner, who has received all the equipment and without spending a cent, will simply begin to pay monthly not for the electricity generated at state-owned nuclear power plants or thermal power plants, but for the electricity generated by his own solar panels.

That is, in this case, there is such a thing as leasing: you pay for installation work, but do not pay for fairly expensive equipment. In the future, your costs will be directly proportional to the reading of the electric meter. As a result, the benefits become obvious:

1. Significant savings on monthly energy costs;
2. Caring for the environment;
3. A very effective advertisement for such a source of electricity as solar panels, as well as the operating principles of the Solar City company itself.

Such a simple and ingenious step allowed Elon Musk to overtake his closest competing energy companies in an instant. After Solar City also has Silevo, which is valued by analysts at up to $400 million, in the near future it will become possible to compete equally with manufacturers from the Middle Kingdom. Solar energy must not only be equivalent in cost compared to other energy sources, but also become truly widespread.

INNOVATIONS

NEW HOUSEHOLD BATTERY from TSLA

Tesla Motors, which recently presented a report on its financial activities in 2014, announced a new battery for home use. According to company representatives, the system is not intended for placement in electric vehicles, but for use in homes and offices. The developers claim that the battery is designed for use with solar panels; such a battery will store the energy generated by photocells. In some regions, the authors of the project believe, such a hybrid system will make it possible to completely abandon external energy sources, electricity supplied by energy companies. The new device will be presented in a month or two. Elon Musk also said that the general design of the battery is already ready, and within six months it is planned to begin mass production of “home batteries.” Tesla, in fact, already offers energy storage systems through SolarCity Corp., a company where Elon Musk is chairman and largest shareholder. But these systems are used mainly by corporate clients. And the new development will be intended for individuals and households. According to Tesla management, it is households, private customers, that can become the largest market for such energy storage systems. This is especially true in regions with a lot of solar energy and strong winds - for example, California. It has already been estimated that the total household demand for energy storage systems could reach 1.3 Gigawatts by 2020. According to Musk, the battery will be flat and mounted on a wall. The battery will have a bi-directional inverter, and the whole thing will connect easily and seamlessly to your home electrical network.

The whole city has switched to solar panels!

The most environmentally friendly city in the world has been built in Japan. All houses there use solar energy, water consumption is reduced by 30%, and electric cars and bicycles are used instead of public transport. The official opening ceremony of the smart city of Fujisawa recently took place. Fujisawa SST Square is an architectural complex located in the central square of the city. From here all urban infrastructure facilities are managed. The first residents have already appeared in Fujisawa; in total, the city is designed for 3,000 citizens and 1,000 households. All planned work will be completed in the city in 2018. Fujisawa will receive more than 30% of its electricity from alternative renewable sources, primarily from solar panels. This will reduce your carbon footprint by 70%. Water consumption has also been reduced by 30%. In the event of an earthquake and a power outage, the city will be able to fully provide its residents with electricity, communications and even hot water within three days. All equipment in the city is used with the obligatory condition of economical use of energy. There are no gasoline gas stations in Fujisawa, but there is a developed network of gas stations for electric cars. For those residents who do not have personal transport, electric cars, electric scooters, bicycles and other environmentally friendly vehicles are available for rent. The security system for residents is ensured by video surveillance in public places and a system of sensors that make it possible, for example, to provide street lighting only when people are walking along the street, which makes it possible to use electricity more efficiently. The total cost of the project is $500 million, but despite the large budget, this innovative eco-city is just the beginning as the company aims to mass-promote the Fujisawa model of self-sufficient and sustainable city development over 100 years.

The world's largest solar power plant launched in California

The San Luis Obispo, California, area recently completed deployment of the latest 40-megawatt phase of the Topaz solar power plant. As a result, this power plant became fully operational and became the largest operating solar power plant not only in the United States, but throughout the world. The construction of Topaz was carried out by First Solar - the total cost of the project was $9 billion. The power plant uses 9 million solar panels covering an area of ​​9.5 square kilometers. Production began two years ago and was not due to end until next year. So launching ahead of schedule is a pleasant surprise. It is expected that the project will be able to generate 550 megawatts of energy, which is enough, for example, to supply electricity to 160 thousand households. The launch of such a station will also reduce carbon dioxide emissions by 377 thousand tons every year. Moreover, the power plant was built at a distance of at least 10 kilometers from the most significant areas of the Carrizo Plain National Monument and the best agricultural lands. It is worth noting that Topaz is unlikely to be able to hold the title of the largest and most powerful solar power plant in the world for long. For example, SunPower's 580-megawatt Solar Star project is expected to reach its maximum design capacity as early as next year (currently at 309 MW). And even earlier, the 550-MW Desert Sunlight power plant from First Solar will start operating (its capacity now reaches 524 MW). It is worth noting that both facilities are also being built in California.

INVESTMENTS

Honda and SolarCity will spend $50 million on solar panels

Honda and SolarCity have announced a partnership that will involve spending $50 million on solar power projects. The partnership is aimed primarily at solving the problems of environmental pollution and the high cost of electricity. The use of solar panels, according to company representatives, will significantly reduce both the maintenance and the maintenance of traditional power grids. The new program, according to the partners, will make electricity even more accessible to Honda and Acura customers, as well as to dealerships. “Our partnership with Honda will create new jobs and contribute to the fight against air pollution and climate change,” said SolarCity CEO Lyndon Reeve.

Google plans to invest in SolarCity

Google intends to invest about $300 million in SolarCity to finance about 25 thousand household solar autonomous power supply systems.

SolarCity is the best company to provide residential solar systems in America, but the industry is still in its infancy and the upfront costs of residential solar are high. To remedy this situation, SolarCity will install solar panels directly on homes using the funds generated, and homeowners will be able to pay a monthly fee to the company rather than spending more than $20,000 to install a solar power-generating system.

It is reported that SolarCity has created a total of $750 million for such projects (this fund is the largest in the field of residential solar energy). Google has previously invested $280 million in SolarCity, which is supported by Elon Musk, who is the chairman of the board.

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SolarCity was created in 2006 by cousins ​​of the famous entrepreneur and founder of Space X, Elon Musk. Well aware of his outstanding business qualities, they also entrusted him with the leadership of their company.

During this time, SolarCity managed to become the largest manufacturer of solar panels in the United States. Its clients include private homeowners, businesses, schools, non-profits and government organizations who have chosen clean solar energy, which is much cheaper than that produced by power plants by burning hydrocarbons.

Company representatives said that their new solar panels are the most efficient in the world. So on an area of ​​0.093 sq. m (1 sq. ft.) they produce more energy than equivalents available in the world. Currently, their efficiency is 22.5% - the highest figure to date among the models on the market.

This became possible after SolarCity acquired new solar cell production technology from Sivelo. The new solar panel configuration reduces efficiency losses to 0.5%, while SolarCity's closest competitors achieve 1.5 to 2.5%.

The solar modules will be assembled in Buffalo, New York. The plant's daily output is expected to be between 9,000 and 10,000 solar panels. Thanks to new technologies, the cost of panels can be reduced to 55 cents per watt of rated power.

Unique panels assembled in SolarCity workshops will produce 30-40% more energy than similar batteries from competitors. The brothers’ ambitious plans include achieving a generated capacity of 1 GW. They intend to create a solar farm near the panel plant that will provide clean energy to Buffalo residents.

To become a SolarCity client, just contact company representatives who will take care of all the necessary calculations and design of solar panels. And then something incredible begins. The installers install and connect the equipment, and the client does not pay a cent for all this.

He will later pay monthly and exclusively for the electricity generated by his solar panels. In this unusual way, the SolarCity company and its creators are introducing their fellow citizens to the use of solar energy.