Tag Archives: Tesla

Apple To Use Tesla Batteries At Solar Plant

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Apple has recently announced that it is planning a large battery installation project at its solar farm in Northern California.

The solar farm is called The California Flats Solar Project. It’s located in southeastern Monterey County. Built by a subsidiary of First Solar, this solar power plant boasts an impressive size of 280 Megawatts and was completed in 2019. The power generated by this farm is purchased by both Apple and Pacific Gas and Electric.

California Flats Solar Project. Courtesy – Apple

While it has not yet been publicly announced that Apple is purchasing battery systems from Tesla for this project, this information leak comes from documents sent to the Monterey County Board of Supervisors. More specifically, Tesla is selling their “Megapack” battery system. This is their utility size energy storage system. According to the documents, there will be 85 Megapacks supplied offering a total of 240 Megawatts of storage capabilities.

Tesla Megapack: Courtesy – Tesla

“The challenge with clean energy — solar and wind — is that it’s by definition intermittent,” – Apple VP Lisa Jackson said “If we can do it, and we can show that it works for us, it takes away the concerns about intermittency and it helps the grid in terms of stabilization. It’s something that can be imitated or built upon by other companies.”

It has been estimated that monetary value of this battery storage project is more than $50 million. That’s certainly significant business that Apple is giving Tesla despite their ongoing talent acquisition rivalry. It’s also a sign that Tesla is still the leader in the energy storage industry, and probably will be for some time to come.

This is certainly a smart and important project for Apple. The company knows that not only is battery storage a vital part of the transition to sustainable energy, but it also just makes good business sense. They’ve done the math and have seen the savings they will realize over the long term. Also, like Apple VP Mrs. Jackson mentioned, this is good PR for the company and shows the company taking the lead on actions that other companies can now more confidently take.

Tesla Offers Solar Panel Rental Program

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A recent post on solar-power-now.com mentioned that Tesla has yet to aggressively re-enter the residential solar power market after acquiring SolarCity.

Well, the company just announced a new angle to their solar power business. They are now offering homeowners the ability to rent solar panel systems for as little as $50 per month. Homeowners must pay a fully refundable $100 fee upfront and also sign a contract that says that they must pay $1,500 if they change their minds and want the solar panels removed. Currently the program is only available in California, Arizona, Connecticut, Massachusetts, New Jersey, and New Mexico.

Tesla.com

In many ways, this new approach to entering the solar business is very similar to SolarCity’s leasing strategy. Basically, it entailed the company entering higher-priced electricity markets and offering slightly cheaper prices than what the local utilities were charging for power. They would pitch it as a win-win; we install the system for free and you see savings right away.

However, the best value in solar is still in buying a solar power system.

Elon Musk has admitted this in a recent tweet – “With the new lower Tesla pricing, it’s like having a money printer on your roof if you live a state with high electricity costs. Still better to buy, but the rental option makes the economics obvious.”

Basically, purchasing (whether with cash or getting a loan) a solar panel system would save you considerably more money over the long term than renting.

Here’s an example of what the company offers for their program in Arizona.

  • System size – 3.8kw (smallest of the three they offer)
  • Monthly rental – $50
  • Value of Annual System Generation – $700-$900
  • Net Savings – $110-$280

A good deal, right? Sure, savings are more than $100 per year and homeowners do not have to do much or make any real commitments. Instead, many thousands of dollars can be saved over the long term when a solar power system is purchased.

The difference between renting solar and buying is very similar to renting or owning a home. When homeowners buy solar they will have acquired an asset that they will eventually have paid off, much like a mortgage. Solar, however, can be paid off in just a few years.

It’s very apparent that Tesla and other large solar companies are struggling to find ways to convince people to go solar.

There’s still a disconnect here.

Yes, it’s a marketing problem, but it is primarily an educational one. If homeowners were educated on all of the benefits of going solar, primarily the massive financially related ones, more people would. On the other hand, this new tactic might simply be a way for Tesla to start the conversation, make it easy to rent solar, and eventually turn those renters into purchasers once they see the value.

The big picture viewpoint remains the same. Large solar companies like Tesla still need to find ways of lowering their customer acquisition costs. They simply cannot compete with smaller and local solar panel installation companies on both price and service. In all fairness, Tesla did mention a reduction in the cost of their solar panel systems earlier this year. They are now similarly priced with the other major solar panel installers.

As more homeowners continue to get solar installed on their homes, they will have more conversations regarding their experiences. Word of mouth will surely spread about how much cheaper their local solar company is compared to the big solar outfits.

Kudos to Tesla for bringing more attention to their solar offerings. Hopefully the company will be able to expand their customer base while eventually lowering prices as well.

Tesla To Drastically Cut Solar Panel Prices

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Tesla has just announced a major price cut for their solar panel systems. The new pricing for the company’s systems will be about 10 percent cheaper than the national average.

This is big news for Tesla. The company is finally cost competitive with the rest of the industry.

Solar panel price information is a major focus of Solar-Power-Now.com. One of the primary missions of this site is to help homeowners find the most affordable solar possible. Up until now, the large solar installation companies have not been able to offer good value to their customers. As we approach summer of 2019, this may be the point in time when this idea changes.

Tesla.com

Let’s take a look into the numbers.

According to the Solar Energy Industries Association, the average price paid for solar panels is about $2.98/watt. Tesla’s new pricing ranges from $1.75-$1.99/watt. This is their pricing after the federal tax incentive. Before that potential savings are applied, their pricing is actually $2.65/watt, installed. This means that, normally, homeowners that need an 8 kilowatt system, (which is close to average size) the pre-tax incentive cost is about $24,000. Tesla’s new pricing for the same sized system is only $21,200, pre-tax incentives.

For homeowners that do not use that much electricity, a 4 kilowatt system from Tesla would cost about $10,600. After the 30 percent federal tax incentive, the total cost is only $7,420. Financed over ten years at a 5 percent interest rate, payments on this system would only be $79/month.

It’s fair to say that it is the cost of solar that holds some homeowners back from going solar. Many still think that it is too expensive. The reality is that it has been financially attractive for quite a few years now. It’s that much more attractive now.

How is this pricing suddenly possible? Tesla has crunched the numbers based on the idea that they can drastically cut labor costs by having their customers order online and also assist with providing the company the information it needs to get the install done (such as pictures of their roofs, electric breaker boxes, and circuit breakers). The company is also looking to lower labor costs by eliminating the door-to-door sales model that Solar City used. Sales are expected to be generated via their physical stores and via the internet.

Another way in which the company is attempting to streamline the process to lower costs is to only offer 4 different sized solar packages. Their systems are only available in 4, 8, 12, or 16 kilowatt sizes. This could potentially be seen as a drawback, because homeowners will not be able to precisely size a system based on their energy usage. For example, many homeowners may be forced to either buy a system that is slightly too large or one that does not quite cover their energy needs.

It’s fair to say that Tesla has realized that they can’t get away with high prices for solar, as opposed to their expensive cars. They’ve certainly learned some lessons from the recent failure of Solar City, the company that Tesla just acquired. It’s actually quite ironic that Solar City did not survive considering how much business they did and how high the company’s prices for solar was.

Solar power in the United States is already a good deal. Return on investment averages are about 15 percent. Systems pay for themselves in about 8 years, on average. This amounts to tens of thousands in savings over the guaranteed life of 25 years or more for a solar panel system. All these numbers would improve under this new pricing.

Along with Tesla, any company that can offer prices that are less than the current costs should be able to find plenty of customers. This could really be the tipping point in which homeowners finally take advantage of the massive savings that solar can provide.