Elon Musk wants to sell you a better-looking solar roof
Elon Musk wants to sell you a better-looking solar roof
amid slowing growth for panels
By Ivan Penn and Russ Mitchell October 29, 2019
Like some kind of 21st century Willy Wonka, audacious
entrepreneur Elon Musk chose a prime spot on the Universal Studios Hollywood
backlot tour to unveil his latest attempt to energize an industry — roofs that
generate solar power but look like no other.
Musk, the chief executive of Tesla Motors and chairman of
SolarCity, showcased a line of high-design solar roof tiles that would replace
clunky solar panels and tie into an upgraded version of the Tesla wall-mounted
battery for those times when the sun doesn’t shine. The glass solar shingles
resemble French slate, Tuscan barrel tile or more conventional roofing
materials with a textured or smooth surface.
“The key is to make solar look good,” Musk said during
the product introduction staged on the old set of ABC’s “Desperate Housewives”
series, where he had re-roofed four of the Wisteria Lane houses. “If this is
done right, all roofs will have solar.”
The move comes as California’s solar industry grapples with
slowing growth and other challenges despite aggressive state mandates to boost
the use of renewable energy.
Nationwide, sales of residential solar panels have held
fairly steady in the year ended June 30, according to the Solar Energy
Industries Assn.
In California, solar photovoltaic panel sales rose 12% in
the first nine months of 2016 compared with the same period of 2015, state data
show. But that pales compared with the 66% jump in the first three quarters of
2015 compared with the same period a year earlier.
Experts attribute the slowing to depletion of the pool of
early adopters as well as to policy changes in California and other states
governing how solar owners are compensated for electricity they produce and
sell to utility companies.
In addition, many homeowners were worried whether
Congress would renew a 30% federal tax credit set to expire at the end of 2016.
Congress extended the credit through 2019 at 30%, after which it gradually
phases out for residential solar customers.
The California solar industry still expects 2016 to
finish with an expansion.
“We’re seeing a slowdown in the market but it’s not a
downturn,” said Bernadette del Chiaro, executive director of the California
Solar Energy Industries Assn. “We’re going to install more rooftop solar this
year than we did in 2015.”
A significant driver in the solar market is the continued
drop in the price of solar panels. The typical residential solar system runs
about $8,000 with government incentives, including the 30% federal tax credit.
The supply of solar panels for residential and other uses
almost doubled from 32 gigawatts in 2012 to 60 gigawatts in 2015, according to
Navigant Research of Chicago. That’s enough to power roughly 45 million homes.
But capitalizing on the falling price of solar panels has
been difficult for an industry that continues to struggle with other high costs
such as labor.
Technological advancements in rooftop solar will help
push overall industry sales from $3 billion in 2016 to $38 billion by 2025,
Navigant projects. And by offering consumers a variety of solar system options,
industry executives believe they will have an increased ability to compete with
the price of electricity produced by utilities.
Price and styling will likely prove critical for the
industry in attracting customers as current solar power owners have seen some
of the benefits of self-generating electricity erode. Utility companies have complained
that solar owners haven’t been paying their share of the cost to maintain the
network of power lines, substations, transformers and power plants that make up
the electric grid.
Regulators across the country have added costs to solar
power owners such as higher rate tiers and mandatory fees that have increased
per-household costs by as much as $10 to $20 a month in California, Del Chiaro
said.
In some states such as Florida, utility companies have
fought the growth of rooftop solar with ballot initiatives that protect their
monopolies on centralized power while penalizing solar owners.
Virtually all quarters agree that the real future for
solar — and much of the energy industry — depends on electricity storage, which
banks solar power for when the sun isn’t shining. The cost of electricity
storage is high but, as with solar panels, is dropping rapidly.
Several solar companies in recent months have announced
partnerships with storage companies to offer a package to consumers. Still, it
remains too pricey for the average consumer.
“All of these strategic alliances are smart,” Del Chiaro
said. “They’re critical. We basically have to sell solar packaged with
storage.”
Last week, residential solar giant Sunrun Inc., based in
San Francisco, said it had entered an agreement with South Korea’s LG Chem, the
world’s largest supplier of automotive batteries, to offer home energy storage
to consumers.
In July, Musk’s Tesla Motors offered to buy SolarCity for
more than $2 billion. As a battery maker, Tesla combined with SolarCity gives
the company its own version of a storage and solar partnership.
Tesla is expected in November to finalize its acquisition
of SolarCity, which is run by Musk’s cousins Lyndon Rive, who is chief
executive, and Peter Rive, the chief technology officer.
People spend a lot
of time trying to create an attractive home. They don’t want funny glass boxes
stuck on one side of their roof.
— Andy Ogden,
chairman, industrial design graduate program, ArtCenter College of Design
But Musk, with his flamboyant style, did not stop there.
Instead, he is looking to one-up his competition.
Musk is working to build a personal alternative energy
ecosystem connected by software and harmonious design, all under the Tesla
brand name. The idea is that green-minded homeowners will mix with
performance-oriented automotive geeks at Tesla retail stores to shop for
electric cars, charging stations, solar rooftops and wall-mounted batteries for
energy storage, available separately but designed to work best as a system.
Friday’s solar roof unveiling also included an upgraded
Powerwall, Tesla’s sleek wall-mounted home battery, which can store
roof-generated solar energy for household uses and recharge the Tesla in the
garage.
During an August conference call with analysts, Lyndon
Rive all but bet the announcement would trigger growth in SolarCity sales as
the company lures homeowners off the sidelines with its new design. Rive noted
that 5 million U.S. homes get new roofs each year — “a really big market
segment” that won’t cannibalize sales of SolarCity’s traditional product.
Revenue during the first six months of the year almost
doubled that of the same period in 2015, but the company’s net loss for 2016
was more than $230 million higher.
SolarCity’s value is far from its February 2014 high of
$84.96 per share. The company’s stock price hovers around $20 a share now.
Julien Dumoulin-Smith, an analyst with UBS who focuses on
electric utilities and alternative energy, said new products and flashy
presentations are less important to SolarCity than the fundamentals.
“What they need to do is bring down the costs,”
Dumoulin-Smith said. “The meat and potatoes issues for this company are much
more pressing.”
In an effort to curb costs, SolarCity and home-sharing
company Airbnb this month announced a partnership under which Airbnb hosts and
renters are eligible for a rebate of up to $1,000 on solar panels through
SolarCity. In addition, SolarCity customers who become Airbnb hosts receive a
$100 travel credit.
With this kind of partnership, solar firms reduce the
cost of customer acquisition, a large expense.
Solar firms also have been adding financing options other
than the leasing model that was a signature strategy of SolarCity.
In June, SolarCity said it had begun offering 10- to
20-year loans to customers that would allow homeowners to gain the benefit of
government incentives the leasing programs did not offer. The loan program
allows homeowners to own the panels without huge upfront costs and receive the
30% federal tax credit — an incentive SolarCity and other solar leasing
companies claimed themselves since they still owned the solar panels.
For Musk, who just reported a surprise quarterly profit
at Tesla, design has always been supreme.
The company had fashioned its Powerwall home storage
batteries with lines that complement the silhouette of a Tesla Model S; but to
Musk, SolarCity’s solar panels looked like the same commodity products every
other solar installer was selling.
He pushed the company to make the product not only
cheaper and more energy efficient, but also better looking.
"This needs to be an asset to your house,” he said,
repeating it in public appearances over the past few weeks. “It needs to be so
good that when it's done you call your neighbors over to show them how proud
you are.”
The new Tesla-SolarCity roof tiles will be available next
summer, Musk said Friday, with rollout starting in California. He didn’t give
details about cost or efficiency.
Musk says he spends most of his time on engineering and
design, and on Wednesday emphasized the essential relationship between the two
in a conference call with stock analysts.
“It’s important to have tight control over the production
of solar panels … to have a beautiful roof product,” he said. “We’ve got to be
able to iterate rapidly and have them made exactly how we want them.”
A 2014 survey by home-solar power provider Lumeta found
that slightly under a third of respondents considered appearance very or extremely
important, while slightly over a third said the look was slightly important or
not important at all.
“People spend a lot of time trying to create an
attractive home,” said Andy Ogden, chairman of the industrial design graduate
program at the ArtCenter College of Design in Pasadena. “They don’t want funny
glass boxes stuck on one side of their roof.”
Making solar roofs more attractive, he said, “increases the number of people who will
install solar.”
Comments
Post a Comment