You’ve heard the buzz. Tesla (est. value $32.6B) seeks to acquire SolarCity (est. value $2.8B).
Could a holy trifecta of clean energy come to pass?
Solar + electric vehicles (EV) + energy storage all under one excited electron-pumping roof?
A clean energy corporate union more valuable than Apple one day?
Ah, to dream.
Or, perhaps not a dream, and instead an achievable goal -- that is, a dream with the master plan of today’s Edison?
We have concerns about the potential merger, and investors do, too.
However, the benefits for U.S. consumers are tantalizing. And we’re big Musk fans.
So consider us cautious enthusiasts.
Let’s look at some numbers from a recent article by soothsayer and king of candor Jigar Shah’s recent piece “The Bullish Case for the Tesla / Solar City Merger.”
(If you don’t know who he is, check out Greentech Media’s Energy Gang podcast. His honesty will shock and delight. A good dude, too.)
1. Cars are expensive to own and maintain. AAA says we pay about $800/month.
See the breakdown below.
Could a holy trifecta of clean energy come to pass?
Solar + electric vehicles (EV) + energy storage all under one excited electron-pumping roof?
A clean energy corporate union more valuable than Apple one day?
Ah, to dream.
Or, perhaps not a dream, and instead an achievable goal -- that is, a dream with the master plan of today’s Edison?
We have concerns about the potential merger, and investors do, too.
However, the benefits for U.S. consumers are tantalizing. And we’re big Musk fans.
So consider us cautious enthusiasts.
Let’s look at some numbers from a recent article by soothsayer and king of candor Jigar Shah’s recent piece “The Bullish Case for the Tesla / Solar City Merger.”
(If you don’t know who he is, check out Greentech Media’s Energy Gang podcast. His honesty will shock and delight. A good dude, too.)
1. Cars are expensive to own and maintain. AAA says we pay about $800/month.
See the breakdown below.
(To clarify, if this calculation is based on a new-ish car that is financed. Cheaper vehicles purchased with car would see lower implied monthly costs than $800/mo.)
2. Going all solar and driving a Tesla can actually save many consumers money each month.
For rough math, Jigar assumes $200/mo in energy bills. So, car plus energy equals $1,000/mo.
If the solar system ($20k) and EV ($35k), plus some efficiency ($10k), were financed at, say, 8% for 20 years, and treated partly like a service, consumers could see payments of less than $600/mo.
In that hypothetical, they save $400/mo, or 40% vs. status quo.
But now they can also brag to their friends about how “green” they are.
I’m just making up numbers, but you get the idea.
The point: It’s not a scenario of selling your kidney to go carbon-free.
Plus, the idea of EVs as a monthly cost vs. a one-time purchase is in line with current EV adoption: 75% of EV users lease vs. about 30% of conventional vehicle owners.
3. This EV + solar thing is a global opportunity, so think about big, big potential revenue.
Deutsche Bank projects that solar power will be at grid parity -- that is, the same or lower cost than retail rates from conventional power -- in 80% of the world by 2017.
Just to clarify, that is next year, not 20 years from now.
Moreover, we’ve got about 1.2 billion cars on the road now. But in 2035 that number is projected to reach 2.0 billion. Ugh.
Why not start those new car owners off on the right foot -- Tesla-finance EVs that cost less than conventional vehicles on a monthly basis, and offer fun features like air purification (cough, cough, Beijing)?
Finally, consider that EVs are expected to be cost neutral vs. gas-powered cars from a first-cost point of view by 2022.
As wiser men have said before, the future is [already] here; it’s just not evenly distributed.
How fast can that future be more evenly distributed? So far, we’re liking the slope of that graph.
But don’t get too excited yet. We’re still just at the starting line of an exciting marathon ahead of us. Start drinking that Gatorade.
2. Going all solar and driving a Tesla can actually save many consumers money each month.
For rough math, Jigar assumes $200/mo in energy bills. So, car plus energy equals $1,000/mo.
If the solar system ($20k) and EV ($35k), plus some efficiency ($10k), were financed at, say, 8% for 20 years, and treated partly like a service, consumers could see payments of less than $600/mo.
In that hypothetical, they save $400/mo, or 40% vs. status quo.
But now they can also brag to their friends about how “green” they are.
I’m just making up numbers, but you get the idea.
The point: It’s not a scenario of selling your kidney to go carbon-free.
Plus, the idea of EVs as a monthly cost vs. a one-time purchase is in line with current EV adoption: 75% of EV users lease vs. about 30% of conventional vehicle owners.
3. This EV + solar thing is a global opportunity, so think about big, big potential revenue.
Deutsche Bank projects that solar power will be at grid parity -- that is, the same or lower cost than retail rates from conventional power -- in 80% of the world by 2017.
Just to clarify, that is next year, not 20 years from now.
Moreover, we’ve got about 1.2 billion cars on the road now. But in 2035 that number is projected to reach 2.0 billion. Ugh.
Why not start those new car owners off on the right foot -- Tesla-finance EVs that cost less than conventional vehicles on a monthly basis, and offer fun features like air purification (cough, cough, Beijing)?
Finally, consider that EVs are expected to be cost neutral vs. gas-powered cars from a first-cost point of view by 2022.
As wiser men have said before, the future is [already] here; it’s just not evenly distributed.
How fast can that future be more evenly distributed? So far, we’re liking the slope of that graph.
But don’t get too excited yet. We’re still just at the starting line of an exciting marathon ahead of us. Start drinking that Gatorade.
Source: Hybridcars.com, Baum & Associates, EDTA
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