The world’s only vertically integrated sustainable energy company

– Why Tesla buying SolarCity is a good thing

In late June of this year, Tesla, the electric vehicle company, made a $2.6bn bid (to be paid in shares) to buy SolarCity. Whilst the deal is yet to be finalised, completion is anticipated in the fourth quarter of 2016. Most press has focused on the financial implications of the deal, the timing seeming to be critical, there is of course far more to be gained from the partnership than monetary capital.

Tesla’s mission is to “accelerate the world’s transition to sustainable energy.” The purchase for CEO of Tesla and chairman of SolarCity, Elon Musk being therefore a “no-brainer.” The move was further stated by Tesla as creating the “world’s only vertically integrated sustainable energy company” allowing it to pave the way in energy generation, storage and consumption thanks to Tesla’s expertise in storage and SolarCity’s in generation.

After acquiring Silevo a maker of high-efficiency solar modules, SolarCity began work on a production factory. Destined to be the largest solar plant in the US its planned annual production capacity of one gigawatt will allow it to compete with Chinese manufacturers. Tesla’s own gigafactory has a planned annual battery capacity production of 35 gigawatt hours, leading the market (yet again) with potentially dramatic reductions in the cost of energy storage. The factory will produce batteries for Tesla vehicles as well as the stationary storage market. It is this market with the production of the Powerwall and Powerpacks, designs to store solar power for use as battery backup that the integration of the two companies is perhaps easiest to understand.

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The synergy is likely to ease the address of associated problems of both the electric vehicle and solar market. A large barrier for uptake of both technologies being the price, the anticipated increased efficiency is likely to lower costs due in part to vertical integration and economies of scale. Critics of electric vehicles running on dirty electricity can be redirected to the improved storage capacity of solar energy and increased access and ease of solar charge.

The appearance of solar panels is one of the main obstacles of wider adoption, this has been acknowledged in a statement by Tesla promising “an aesthetically beautiful and simple one-stop solar and storage experience”. With Musk already having announced plans for solar roofs, as opposed to the traditional fitted solar panel. Given the sleek design of the Tesla models there is little doubt that the merger is capable of addressing some, if not all of the outlined problems.

Whilst a bold move, it is not surprising. Together the two companies will be able to offer fully integrated residential, commercial and grid-scale products internationally thanks to Tesla’s existing global outreach. If successful, the combined influence on the vehicular and solar market is likely to increase over time and with it the chance of adoption of electric vehicles and solar energy.

The very roof above your head powering both your car and home with solar whilst storing any surplus energy may be closer than you think. Now isn’t that a warm thought.

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Written for the Clean Tech Network at Hethel, Norfolk

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