SolarCity, Musk see ‘infinite’ growth in solar market

Amid all the hype of Tuesday’s news that Elon Musk and his cousins, Peter and Lyndon Rive, were extending their US solar leasing company into a vertically integrated contender, that will manufacture and install solar PV on rooftops, the SolarCity founders made some pretty bold claims.

Chief among these was CEO Lyndon Rive’s suggestion that plans like theirs, to produce and install solar at scale, would soon drive the cost of solar down far enough to beat the grid and disrupt the electric utilty industry status quo.

“Being fully vertically integrated allows us to control the cost of solar per kilowatt-hour installed, which ultimately is the metric that matters,” said CEO Lyndon Rive in a conference call. That would allow the company to provide energy lower than the grid without subsidies. And if you do that, said Rive, “potentially the market is infinite for the next 30 or 40 years.”

Rive, along with his brother Peter – Solar City co-founder and CTO – and SolarCity chairman (and Tesla founder) Elon Musk said in a note on the company’s blog that they “absolutely believe” solar power could and would become the world’s predominant source of energy “within our lifetimes.”

But they also conceded that “a lot of panels” would have to be manufactured and installed for that to happen. “The plans we are announcing today, while substantial compared to current industry, are small in that context,” the SolarCity trio said.

“The path to ultimately having solar power way cheaper than coal or fracked gases is to combine huge economies of scale with the most advanced technologies,” said Musk in the same conference call. The company already owns a mounting rack company called Zep Solar and will look for other acquisitions in the future to wring costs from delivering solar, executives said.

At this stage, the company’s plans for its newest acquisition are to start shipping Silevo’s super efficient (21%) silicon solar panels from a huge 1GW factory in upstate New York (powered largely by hydro power) within the next two years.

“Given that there is excess supplier capacity today, this may seem counter-intuitive to some who follow the solar industry,” said the Rive brother and Musk on the company blog.

“What we are trying to address is not the lay of the land today, where there are indeed too many suppliers, most of whom are producing relatively low photonic efficiency solar cells at uncompelling costs, but how we see the future developing.

“Without decisive action to lay the groundwork today, the massive volume of affordable, high efficiency panels needed for unsubsidized solar power to outcompete fossil fuel grid power simply will not be there when it is needed.

“Even if the solar industry were only to generate 40 percent of the world’s electricity with photovoltaics by 2040, that would mean installing more than 400 GW of solar capacity per year for the next 25 years.”