Solarcity collaboration with Tesla Motors
Solarcity (SCTY) which has seen its stock price rocket up in recent times is exploring the option to sell energy storage solutions along with its solar panels. The biggest problem with rooftop solar systems is that they have to depend on the electricity grid for storing excess power generated during the day and drawing power from the grid in the night. This is done because the electricity grid acts as a free source of energy storage for the solar panel systems. However, companies in the industry realize that this is not a feasible long term solution, as utilities are competitors. A number of utilities in the USA are lobbying the regulators and the government to charge the solar system owners a fee for using the electricity grid. The utilities are also reluctant to allow net metering facilities though they have been made compulsory in a number of states. The problem is becoming acute as thousands of USA homes are adopting cheap solar system solutions each month.
Also read my earlier article on Why Energy Storage will be the Biggest Gainer from Solar Grid Parity.
Solarcity Stock Outlook
Solarcity is the most expensive solar stock and I remain negative on the stock, based on the current valuation. I think that the company can do well in the future but the stock price will see a significant correction.
Lyndon Rive, chief executive of San Mateo, Calif.-based SolarCity Corp., said in an interview this week that his rooftop solar company plans to roll out a system that would allow customers to generate power by panels during daylight hours and store the energy in battery packs at night.
This would let customers sidestep a net metering arrangement that most of the state’s utilities have in place. According to Rive, storing the power would protect companies and homeowners should regulators decide to reduce the amount of energy utilities are required to buy, or downgrade the rates they pay for a system owner’s excess power.SolarCity will begin testing 8-kilowatt battery packs from Tesla Motors, the luxury electric-car maker founded by Rive’s cousin, Elon Musk. According to Bloomberg, Rive said declining battery prices will mean his systems can include storage and still beat utility rates for consumers in California and Hawaii.Jenal said SolarCity is in a good position to work out the kinks, and that the collaboration between Tesla and the solar company made business sense as well. “This is a natural way to leverage the research Tesla’s already done on batteries and expand,” Jenal said.