SolarCity’s mission is to remove every obstacle that stands in the way of clean energy. Today we introduced a product that will make serious headway in this effort: fully-integrated and affordable solar battery backup systems for homes, businesses and governmental utilities. These products can provide benefits to the utility grid as a whole and to all consumers of energy.
While the sun provides more energy in the middle of a single day than the planet’s entire population uses in a year, our potential to harness the sun as an energy source has always been held back by intermittency and our inability to access its energy at night. Battery storage will help solve both of these issues, and as soon as solar battery systems are cost-competitive with fossil fuel-based centralized power, I believe the demand for solar energy will eclipse that of fossil energy.
Using Tesla’s suite of batteries for homes and businesses, SolarCity’s fully-installed battery and solar system costs are one-third of what they were a year ago. We expect costs to continue to decline as manufacturing scales, and over the next 5-10 years, these cost reductions will make it feasible to deploy a battery by default with all of our solar power systems.
Batteries distributed at homes across a region can lower the costs of maintaining the grid and new market structures designed to take full advantage of this benefit appear likely in several states.
Proceedings currently underway, such as the New York REV and California’s More than Smart, seek the creation of effective market structures for distributed clean energy services that will reward utilities for adopting cheaper, cleaner, customer-sited resources. The products that we’re announcing today are the building blocks of these new market structures.
Our customer contract explicitly contemplates the potential of these markets and creates a revenue-sharing opportunity for the customer. For utilities and grid operators, the technology is designed to enable remote-aggregated control of solar battery systems. I urge anyone reading this who is responsible for managing grid operations, and who is interested in procuring capacity, reactive power, or voltage management services deep in the distribution system to contact us.
I believe the best grid design is one in which utilities embrace distributed energy resources. However, when utilities and regulators impose solar-specific charges on their customers, or burden homeowners with unduly long system interconnection delays, utilities risk mass customer defection from the grid via solar battery systems.
In Hawaii, people are frustrated with utilities for having put a hold on rooftop solar in their territories. We hear often from people seeking a solar battery system that will allow them to sever ties from their utility completely. As I’ve written before, we don’t think this is optimal for the grid. But when the choice is between being grid-connected without solar or being off the grid with rooftop solar and a solar battery system, the choice is clear. As a result, SolarCity plans to offer an off-grid solar battery system to eligible customers in Hawaii beginning in 2016.
It is vital that we advance the technologies that will lead to an affordable, decarbonized grid. The widespread availability of affordable battery storage will unlock the full potential of solar energy to contribute to this effort. I believe that the solar battery systems launched today will result in a record amount of batteries being deployed in the U.S., advancing our goal of ensuring a cleaner future for all.
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