Solar City (Tesla's sister company)

Japan’s Growth in Solar Power Falters as Utilities Balk…

Article in the NY Times today.

This is an example of why, although I am rooting for SCTY, I’m reluctant to invest in them. Solar is coming, but may take much longer than people think.



Here’s the rub and maybe the difference with the US market. Many states are now mandating their utilities to have so much percent of their power going into the grid coming from renewable sources.

A renewable portfolio standard (RPS) is a regulatory mandate to increase production of energy from renewable sources such as wind, solar, biomass and other alternatives to fossil and nuclear electric generation. It’s also known as a renewable electricity standard.…

Click on the dsire solar map to see the State’s goals. For example,…

So utilities have two options to meet these continuing mandates, invest their own capital in solar, wind, etc projects to meet the requirements or incentives residential and commercial real estate to invest their own funds to help the utilities meet these mandates. As I see it in PECO and Balt. Gas Electric territories, utilities are going toward incentives to get people to invest in solar, wind, etc.

This is in my opinion why a company like Solar City is a great play on this new dynamic in the electricity generation conversation


My utility (that supplys my home) is now a major stake holder in a roof top solar provider.…

I think other power companies will also install their own panels.


Zildjian (do you have anything to do with the famous brand of cymbals?), I’m afraid you have really got things wound around an axle here. Most utilities are fighting against the deployment of personal solar installations for a variety of reasons.

If you delve into this, you will discover that while the local utilities are required to “pay” an individual for the excess energy they generate and subsequently “deposit” on the grid, absolutely, totally 100% of that energy does not reduce the utilities energy production requirements in the slightest. It is not saved and used when the demand arises for it. Electrical energy is almost impossible to store. The only actual storage device is a capacitor, physical construction of this device makes it completely impractical for large-scale applications. The excess energy returned to the grid from home solar (wind, etc) installations is 100% dissipated as heat. The environmental benefit is zero, because not a single gram of carbon released into the atmosphere is reduced. In fact, the local electrical grid is probably the most inefficient single product of our ever so efficient free enterprise system, often squandering about 67% of the energy provided to the grid as unused and unproductive waste.

The high-voltage long-line grid which brings the electrical energy from the manufacturing plant (usually a coal fired steam generator, but more recently gas fired steam generators) are actually very efficient, with losses on the order of only a few percent.

I’m sure at this point you’re probably primed to argue my point about storage by asserting that batteries store electricity. The fact is, batteries do no such thing. Batteries are electro-chemical devices. Some of them (lead/acid, Li-ion, etc.) provide reversible reactions such that electrical energy may be applied to the poles when an excess of energy is present, and after certain frictional losses (heat) the chemistry can be returned to a higher energy state. Under different circumstances, a chemical reaction takes place which releases energy in the form of electricity (and heat). It is non-trivial to understand that this is very different from storing electricity. In practical terms, this is not very different from pumping water into a reservoir with excess electrical energy driving the pumps. Then, when the energy demand reverses, letting the water flow through a turbine to generate electricity by spinning a wire coil in a magnetic field.

The problem we have with renewable energy sources is that today 100% of them are “farmed”. What that means is the energy is only available when the conditions are right for harvest - like when the sun shines, the wind blows, etc. We can not support our energy requirements strictly from farmed sources because our demand does not align with the harvest cycles (which are unreliable to begin with). In order to provide electrical energy without interruption (blackouts, brownouts, etc.) a manufacturing process that provides continuous, uninterrupted levels of electricity is absolutely necessary.

The manufacture of electricity is known as a step-function. What that means is that production can not be continuously scaled up and down with the demand curve. A coal fired generator starts with coal, which represents a certain amount of energy stored in a chemical form. The coal is burned which releases the energy in the form of heat. The heat is used in turn to boil water which is converted to mechanical energy as it drives the vanes of a turbine. The turbine spins a coil of wire in a magnetic field which finally provides electrical energy. So we have the following energy transformations in this manufacturing process: chemical, heat, mechanical, electrical with all the attendant losses along the way which amount to more than 50%. A 2nd generation gas fired plant is somewhat more efficient, but not very different. The problem is that there is enormous overhead with bringing a generator on-line or taking one off-line. That’s what makes it a step function. Once a turbine is spinning up to speed, it continues to operate at 1005 capacity even as demand drops off.

Further exacerbating this situation is the fact that utilities always provide a safety cushion above estimated demand in order to ensure that there is adequate supply in the event of an unanticipated spike in demand. The result is an excess of energy provided to the local grid before any home-owner dumps a few extra watt-hours on the local grid. It all gets pissed away - er, dissipated as heat rather than being used in a productive manner. Hence the extraordinarily high inefficiency of the local grid. Try to think of any other industry where this level of inefficiency would be tolerated - there aren’t any.

The real solution to our energy problems are to stop arguing about the fuel source and start paying attention to the notion of an intelligent grid, conservation and alternative forms of convertible energy storage (note, I did not say electrical energy storage).

All that being said, I have a very modest investment in Solar City. Why? Because as a practical matter I think even the most rabid republican who contends that climate change is a big hoax will gladly buy a home solar system if it will reduce his energy bill. The economic arguments are far more compelling than the environmental ones. I think Solar City has figured out a way to make the economics very favorable in certain locations.


One of the reason why I didn’t invest in Solar City because of the Solar program in Germany over the past decade. They had massive ‘green’ incentives, resulting in a few percentage increase in Solar Power being the total energy output for the country. The end-result has been a net increase in greenhouse gasses. An increase!

Why? Because although the base load power may have consisted more from green solar sources, due to the unreliability of the source, they had to increase their on-demand power generators (expensive, high-pollution generators) to make up for spikes in energy requirements / cloudy days.

The whole paradigm is complicated. If there were a solar city equivalent using wind, I’d plow in, as wind energy is very predictable and can be a good part of the grid.

I’m still totally routing for Solar City. Probably a good time to invest on this drop. It is Musk after all. Fingers crossed he’s got some genius plan under his sleeve to resolve all this grid/storage problems. The world needs it! And I wouldn’t be surprised if he does.

It might be pointed out that while all places have nighttime, Germany has far more cloudy days than almost any part of the US. Thus solar is less useful in Germany than the US. OTOH I have heard that the less burdensome regulation and permitting process in Germany allows for cheaper solar installation, thus helping the economics.(no link)……

I have always suspected that the German rush to solar was political in nature, something to placate the Green Party rather than science based. It gets roughly the same percent of it’s power from dirty coal as does the US. Much German coal is very low quality lignite but I don’t know how this effects pollution.

I AM a “rabid republican who contends that climate change is a big hoax” who bought (not leased or rented- purchased) a PV system to lower my electric bill.

However, my PV production footprint (usually a perfect bell curve peaking around noon) closely resembles the Aggregate Community Electricity Consumption as demonstrated in the graph on the link below:

It’s not a perfect match, but I’m certainly pumping electricity during a high demand time

Here is a link to my solar PV output:…

FYI: I’m with you on most of your points, especially the intelligent grid.

I did entertain SolarCity. My neighbor signed a SC contract and had them install a small/medium number of middle range output/efficiency PV panels on his roof at no cost to him. It’s saving him some $$$ every month with no money out of pocket.

I choose to purchase my grid tie system. I maxed out my southern facing roof space with as many high end PV panels as could fit and were available in the US at the time (32 280W 16.7% efficient panels in July 2014). It’s covering 100% of my electricity (so far- I have not had a full year to run yet).


I live in Southern California. My ROI should be 6-7 years.


Tesla’s battery and charging technology could ultimately wind up saving you money on your electric bill. Although many of today’s homes draw energy directly from the electricity grid, the spread of cheap solar panels means it’s never been easier to generate some of your own energy. Storing renewables efficiently has been a big bottleneck for consumers and for utilities alike, but if Tesla’s stationary battery takes off, it could change the way electricity is priced and traded on a market scale.…

There are clearly folks posting here that are much more informed than me. So forgive my ignorance (or at least be kind with my impending take-down). But, it seems like solar in concert with a home battery like this could be a big driver for both companies. Regardless of the viability of selling the electricity back to the grid. No?

OK - at risk of providing too much information, I’ll provide a follow-up on this thread because I’ve been studying this for years now. I’ve accumulated a lot of knowledge on the subject. And, way back, a long time ago, I almost became and electrical engineer.

First thing, don’t compare EU countries with the US. They’ve got a whole bunch of materially different circumstances. Some of them political (as noted), some of them prevailing weather conditions (BTW, I’ve got a Chinese friend, former Boeing engineer, working with a Chinese company engaged in the design and sale of small wind turbines with Germany as their primary target market). But the most important difference is Europe does not have an abundance of cheap natural gas as is currently the case in the US. How long this cheap gas in the US will persist is anyone’s guess.

Gas has a lot of advantages over coal of any quality. It’s easy to move via pipelines (many of which already crisscross the nation). It’s a more efficient fuel than a coal, even in a converted coal plant, but especially in a 2nd generation gas turbine plant where the heat from burning the gas is used to drive an auxiliary generator, sort of like an afterburner. I refrain from providing percentage efficiency gains because I don’t remember the numbers, but it’s significant - however, any thermal plant is still bound by the laws of thermodynamics, they just aren’t all that efficient when compared to energy sources like hydro.

Our existing grid is pretty much 19th century technology as envisioned by Nicola Tesla (ever hear that name before?) and built by George Westinghouse who went head to head with Edison and won by promoting mostly false benefits of AC current over DC. For sure, much of the hardware has been replaced, but the underlying design has not changed all that much. There are some exceptions. In case you aren’t aware, we have built very few ultra-high voltage long-lines in recent years, but the ones that have been built are DC. There’s this little problem with AC called phase relationship. Basically, AC phase has to be perfectly matched when combining power sources or you get cancellation. One and one does not equal 2. Phase matching high voltage lines is non-trivial. It’s a problem that does not exist with DC.

But the whole notion of central large-scale generation (be it nasty, dirty coal, or those green, not nearly so benign as you might think, wind farms, solar, nuclear, etc.) with long-line distribution to several sub-stations which then step-down the voltage for distribution to the local grid is essentially the crux of the entire problem. Central, large-scale generation is not and can not be sensitive to instantaneous demand. So long as this remains the design paradigm we will forever generate and throw away a great deal of excess electrical energy.

Up until fairly recently, there was no viable alternative. Even with an alternative (described shortly) the entire utility industry is built on maintaining the 19th century design. This industry is not anxious to embrace radical design changes that would disrupt their business models and worse still, severely damage profits.

I mentioned 2nd generation gas turbines above. Another interesting thing about gas fueled generators is that they can be down-sized without losing a lot of efficiency. Also, as the generators are scaled down, the overhead associated with spin-up, spin-down is also decreased - not eliminated, but reduced quite a lot.

So, try and envision a system of local mid-scale power-plants, maybe one for each sub-station, or maybe one for a few sub-stations. Now hook them together with a smart grid so that any point in the grid with low-demand would have its power allotment shifted to areas of higher demand. The size of a “point” would have to be determined, I doubt it would be an individual home or business, maybe a neighborhood. Capacity could be instantaneously adjust to meet shifting demands. Auxiliary generators could be on “stand-by” based on historical trend data. Locally farmed electricity could be easily integrated to this system and actually put to use rather than just squandered as it is today.

OK - I’m not an electrical engineer, so I’m not going to design this system, but I can envision it. It would be almost immune to power outages by virtue of everything being multi-point connected and intelligently controlled. Yeah, maybe a small local area could still suffer a blackout, but those regional outages would be a thing of the past. But it’s true that cyber-security would be an issue.

What kind of investment would it take? I couldn’t guess. But I think we will reach a point where we will have to incrementally change the basic design of our electrical system.


There are a host of problems with home scaled battery systems. Noe of them are impossible to resolve, in fact I Have friend with an off-grid summer home on an island where solar combined with a battery system was his only alternative for continuous electrical supply. It was just damned expensive. If I recall, he used glass-packed, leak-proof nautical lead-acid batteries. I don’t know how long they last before they need replacement. I don’t know what his recycling provisions are, but I assume there are such provisions.

The Gigafactory seems to be geared for excess production over what is needed for automotive purposes. So yes, battery back-up systems for Solar City (or any solar) installation may be a target market. The main hurdles are related to economic issues, with some safety concerns and also providing the physical space for a battery system if it was not part of the original home design.

For an individual homeowner, this may be a good plan. At some point as the economics comes down, the technology get’s simpler and safety and space problems are addressed, solar/battery systems may become widespread in certain regions where the prevailing weather conditions are amenable.

But, we’ll still be stuck with utilities with large-scale generation factories, long-line distribution (oh yeah, I forgot to mention the huge capex of poles and wires along with attendant maintenance labor), local substations and horribly inefficient local grids which may become even more inefficient as self-contained home systems spread.


OK - at risk of providing too much information, I’ll provide a follow-up on this thread because I’ve been studying this for years now. I’ve accumulated a lot of knowledge on the subject. And, way back, a long time ago, I almost became and electrical engineer.

thanks BrittleRock. Fascinating!