Elon Musk has almost single-handedly driven advances in electric vehicles in the US with his company Tesla Motors. I'll go out on a limb and say that without Tesla, Ford and GM wouldn't have paid too much attention to electric vehicles. But the denizens of Detroit got wind of the auto-upstart. Tesla has not yet balanced the books since its extremely successful public offering in 2010, but its stock trades are around three times that of Ford and well above GM.
But more than that, Musk wants electric cars to be powered by the sun, rather than dirty electricity from the grid. This is not so far fetched from a man who envisions holidays in space and solar powered jet liners…
Despite the headwinds from the shale gale that have blown a chill clean tech, Musk reiterated his commitment to solar earlier this month at the National Clean Energy Summit in Las Vegas, US.
“We must have sustainable energy in consumption and production or we will face massive economic collapse,” he said. “That's a problem we know we must solve one way or another.
“The challenge we face right now is [that] we have these low-cost hydrocarbons stored in the ground that accumulated over 100s of millions of years, or billions of years in the case of methane.
“We're taking trillions of tonnes of carbon dioxide buried deep in the earth's crust and putting it in the atmosphere and that migrates to the oceans and causes acidification. So we're essentially running this massive chemical experiment on the oceans and atmosphere.
“Why are we running this massive chemical experiment on our oceans and atmosphere when we know we're going to have to find an alternative anyway?”
The alternative is solar, said Musk. “If you took just a small section of US, a 100 miles by 100 miles corner of Utah or Nevada and carpeted it with high efficiency panels you could supply the electricity for the whole United States.”
“What I think Tesla has been helpful in doing is accelerating the transition to sustainable energy on the production side with solar power. I feel strongly that solar power will be the single largest source of sustainable energy in terms of power productions that humans consume. But the earth is almost entirely solar powered already.
“So we're really talking about taking a little portion of that energy converting it to electricity for use in human economic activity.”
SolarCity, the residential solar star where Musk is chairman, has been going from strength to strength despite suggestions that its business model may be pushing up the cost of installations by US$3.12/watt.
SolarCity started to lease systems in 2007 with the capital costs borne by large banks tempted by the 30% Investment Tax Credit and large-scale investors with revenues to claim against have been harvesting the subsidies for the sun. Liquid companies like Google have also bought in, with a $280m fund for SolarCity's rooftop solar installations last year.
“At 30% for the federal tax credit, taxpayers are giving SolarCity an extra $2,257,211 — just from six months worth of installs in only the SCE [Southern California Edison] service area,” wrote Run on Sun's founder, Jim Jenal, last year.
For Musk, solar systems are a perfect match for his EVs: residential PV panels charge the car's battery by day, and the car's battery can power homes when the sun goes down.
SolarCity has installed 28,000 PV systems since 2006 and 2,500 EV charging systems for carbon free motoring.
“With SolarCity, we're trying to scale up make it more and more affordable,” he said. “It sure is tough when you've got the ability to pull natural gas out of the ground at next to nothing. It's a pretty hard bar to cross but we're going to give it our best shot.”
In June, SolarCity and US Bancorp announced a US$250 million tax equity fund that will provide the liquidity for residential and commercial solar power projects.
It also announced an investment of US$100 million in addition to an existing US$100 million from Credit Suisse and its SolarStrong initiative provides solar for up to 120,000 US military homes. It also expanded operations in Beltsville, Maryland and Albany, New York.
Walmart already has six SolarCity projects on stores in Colorado and Musk mentioned a further 90 solar installations with energy storage at Walmart stores around the country.
“You can put solar panels at point of use,” he said. “We need to pair that with energy storage in order to have 24 hour a day power. How to lower cost for batteries for grid storage is going to be important as well.”
Musk has succeeded in making electric vehicles sexy, he said.
“The trick with EVs is we've got to make cars that are more compelling as products than electric cars. That's really critical for mass adoption of electric cars. You can't tell people, buy this electric car it's ugly, it's slow, it's got a lower range. It just sucks.
“What Tesla is trying to do is create an EV that is better than a gasoline car. Leaving aside electricity is far cheaper than gas and it's good for the environment, if we just make it a better product then you don't have to make the environmental argument and get a much broader set of people willing to buy the car.”
But Musk's challenge to bring the glow of desirability to solar as he did with EVs will be tested when SolarCity goes public. It registered with the Securities and Exchange Commission earlier this year, but the details of its revenues and profits and the deals with Credit Suisse and US Bancorp are restricted from public viewing now because of the recently introduced JOBS Act.
PayPal, which Musk founded with Peter Thiel, became his greatest direct financial success to date when eBay bought them out for US$1.5 billion. Musk may yet drive off into the sunset for another glorious exit with Tesla. And although his SpaceX mission to commercialize space travel might seem like a flight of fancy, if Musk manages to move the needle on solar the way he has on electric vehicles, he will have done us all a good turn.