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Solarcity to collaborate with Tesla on Lithium battery storage for its Solar Panel Systems

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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.

Read on GWI Net Metering Charge – Utilities to fight tooth and nail to stop the distributed Solar Energy onslaught.

The companies such as Sunpower (SPWR) and SMA Solar have already introduced energy storage solutions along with solar energy systems. Solarcity is also starting to explore lithium battery storage for its solar products. The company will collaborate with Tesla Motors (TSLA) to develop a cheap and safe energy storage product. Note lithium energy storage is quite expensive and most solar systems still use cheap lead acid batteries. Though solar energy prices have reduced drastically in the recent years, it is still expensive compared to the grid electricity. Adding energy storage makes it even more expensive. Solarcity is going to extensively test the energy storage product in 2015 to introduce a combined solar lithium battery product in the next 2-3 years. It will benefit from TSLA’s expertise in the lithium batteries which power electric cars.

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.

LA Times

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.

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Read more on Solar Power, Tesla Motors, Lithium at Wikinvest
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Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in or call me on +913340606492.

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