SolarCity didn’t invent solar panel, but it invented something more important
slate.com
slate.com
Three major factors contributed to making solar as viable as it is now, none of which Solar City invented (but it is executing on them better).
1. Germany basically subsidizing China (and others) to build the massive solar panel production pipeline it has now that are producing ridiculously cheap panels[1].
2. Financial innovation to allow consumers and installers to pay for panels over time (PPA, leases, loans, etc.). These were originally pioneered by SunEdison[2], and the industry has been innovating on them since (including SolarCity with its MyPower Loan).
3. The California Solar Initiative[3] and Department of Energy's Sunshot Initiative[4]. Both were incredibly well designed to gradually wean solar off of subsidies and foster innovation through strategic grants, and they have worked incredibly well at teaching the solar industry to stand on its own two feet. We are well on our way to $1/watt[5].
SolarCity has executed incredibly well in this industry, so they definitely deserve tons of credit for installing so much solar. But it's a disservice to the rest of the companies, governments, and financiers to say they invented the recent growth. Everyone, including SolarCity, has come together to build a mature and exponentially growing industry that was 1 out of every 78 jobs last year.
[1]: http://qz.com/41166/how-germanys-energy-transformation-has-t...
[2]: http://archive.onearth.org/article/selling-the-sun
[3]: http://www.gosolarcalifornia.ca.gov/csi/index.php
[4]: http://energy.gov/eere/sunshot/sunshot-initiative
[5]: http://cleantechnica.com/2015/07/10/price-solar-hits-record-...
"Two weeks before his Hyperloop announcement, Musk quietly met with the founder of ET3, an even-faster, already patented[since 1999] tube transport system."[1].
That's not to say Elon didn't help the hyperloop - he helped greatly by exciting the public's and investors imagination. But he didn't invent the thing.
[1]http://www.fastcoexist.com/3015704/futurist-forum/how-much-d...
Several companies were offering Solar lease in 2007.
The article seem to imply that SolarCity invented Solar Leasing which is inaccurate.
[1] https://en.wikipedia.org/w/index.php?title=SolarCity&type=re...
[2] https://en.wikipedia.org/wiki/Special:Contributions/UVHaight
Maybe there are cases where leasing makes sense...but those are few and far between...or maybe SolarCity counts on people being uninformed/clueless, which is why this 'lease' model works. IMHO, it's total ripoff.
Post a (disposable) email address where I can reach you with his info if you're in SoCal.
IMO, no one reads that and assumes that McDs invented the lobster roll. Why then would someone read the Wikipedia quote and assume Solar City was first or assume that's what the wikipedia quote was implying? That was when Solar City first introduced their new product: a lease.
1 - http://www.nydailynews.com/life-style/eats/mcdonald-start-se...
[1] http://www.usatoday.com/story/news/nation/2015/05/20/califor...
If you were looking to buy a house, and it was 7 years into a 20 year solar contract (hence locking in the rates/financing of 7 years ago), wouldn't you want it either removed so you can put in something better, or be compensated for taking on such obligations?
I can't find out how often houses are sold in California, but it seems like ~7 years is normal.
> "Your kind began as self-repairing distributed storage systems for our supercomputers. [...] No, I didn't create you. Engineers did.
> I created something far more powerful... The marketing campaign that made you profitable."
Also, I wonder where any of this (solar city, spacex and tesla) would be without government help?
My rooftop solar (I believe it'll be ~6kw; installation is soon) is around $20,000 to own outright, which includes 30 years of maintenance, whether or not I pay it off early. Once it's paid, it's mine.
That's actually not a "very high" price compared to decades of electricity, particularly not once you include the federal tax credit (30% of the system price). So you're right that the federal tax credit is a big deal, but I wouldn't have described the system as a "very high" price (it's around the same amount as the average "minor" kitchen remodel.)
EDIT: the big deal with the federal tax credit is that it can be used as a down payment, which makes the overall system payments begin at a lower price than grid electricity rather than a slightly higher price. This means monetary savings is immediate.
Of course the numbers vary a bit by state.
That's pretty sweet. It kind of boggles my mind why this stuff isn't more popular...
For example, imagine instead of using the $25k to cover your entire electricity budget (let's assume it's $2.5k a year) for decades to come, you earmarked it to be invested in a different project, with the returns going towards paying the utility bill.
Had you invested the same $25k and got a typical long-term average stock return of 7%, you'd net $1.75k every year, assuming your utility bill was say $2500 and it was 100% covered by your $25k, 10.5KW system, you'd be short $750 on the first year compared to having put that money into a solar installation.
Which would mean it'd have to be made up, so you reduce the $25k stock investment by $750, added to the $1.75k stock return, to pay for your annual bill, and go into year two. Same story for year two, only now instead of making 7% on $25k, you make it on $24.25k, and so your return drops from $1.75k to $1.7k. As the years go on, your $25k cash becomes smaller and smaller, and by year 17 it has evaporated entirely, and you start the bear the full cost of paying $2.5k a year to your utility, without any equity or investment or $25k cash left.
Instead, the solar installation of $25k probably still has $10k of equity locked up in the value of your home, and is still generating about 85-90% of your annual bill two decades in.
Not to mention electricity prices have gone up every decade (not necessarily in real terms, but in nominal terms still), meaning your 10 KW system will save more and more in nominal terms, while the $25k investment isn't inflation adjusted. (it it was, the 7% return would probably drop to about 5%, making it even worse off). -- edit: the 7% return is already inflation adjusted actually, sorry.
And none of this even mentions the taxes that cut into your stock returns, again making it a worse off venture, while it appears saving money on your utilities with self-production is largely untaxed (?), just like making a sandwich at home or doing your own laundry isn't taxed.
I know you ended up leasing but I don't know the terms of your lease, but simply running some numbers for a buy scenario looks really appealing.
Of course it is very contextual. In cities where the kwh rate is just 9c instead of 17c, and where the credits, rebates and tariffs aren't very appealing, and where the capacity factor due to fewer sunshine hours is a third lower (e.g. in the UK it's closer to 10%, as opposed to 17% in places like California or Hawaii), it's a totally, totally different story. But it feels like in California it's a giant no-brainer. I mean I know solar is rapidly growing as an industry but we're also hearing of bankruptcies, of Solar City having lost hundreds of millions this year and last year, of solar still being a moral rather than a financial decision etc. And I can't seem to square it with the numbers I'm seeing which look really appealing.
Let me know if you'd like to share some of the terms, numbers, expenses etc for your lease by the way, would be curious to hear some real life cases!
Solar is still not really cost effective without massive subsidy. But those subsidies exist for a reason and taking advantage of them is not weakness.
In other words, the buffer allowed them to be less risk-averse, and accelerated their growth.
2) This comes up in libertarian circles frequently, and is usually meant as deriding comment, but it's important to keep in mind that all energy business has government involvement in some ways. Nuclear and hydro are frequently government-owned, coal was subsidized back in the days when it got its start, there are natural monopolies involved in grid and energy distribution. Solar, however, enables such a great level of autonomy, that it might just be the last sector where government and private interests are intertwined.
Has any world-changing industry gotten anywhere without government help?
I'm not arguing (here, at least) that those are bad ideas, just that there's a broad spectrum in what constitutes government "help".
Did you have something specific in mind?
Industries such as what?
If you don't throw subsidies at key industries (energy, automotive, aerospace, computers), some other countries will, and those countries will inevitably come to dominate.
Most countries that do this might try to hide it, but they still do it.
If government-directed industrial policy were the deciding factor in a sector's success, we'd all be in awe of the massive, globally dominant Japanese software industry, or the French Minitel business.
A tax credit isn't the only way to give a subsidy. In the case of the microelectronics industry, much like aerospace, subsidies were (and still are) supplied via enormous levels of government spending on military/space technologies - all the way from the Manhattan project, to defense funded Bell labs projects, to the space race.
No NASA and no ARPA and no Bell labs = no PC.
>If government-directed industrial policy were the deciding factor in a sector's success, we'd all be in awe of the massive, globally dominant Japanese software industry
No, we'd be in awe of the massive, globally dominant Japanese automotive industry.
Oh wait...
>or the French Minitel business.
Minitel may very well have been the dominant 'internet' today had it been an open technology like Arpanet. The technology landscape of the time is littered with the corpses of companies who tried to own the Internet.