On Tuesday, Tesla announced it intends to acquire the solar power business Solar City, provided shareholders of both companies approve the purchase. In a conference call with reporters, Elon Musk said that Tesla “thinks this is a huge opportunity to have a highly integrated sustainable energy company, from generation to storage to transport.” It’s a move Musk said he’s been thinking about for many years, and that the timing seemed right with Tesla’s recent activities in energy storage.
Assuming the shareholders agree, this will add a third product line to Tesla’s retail stores, which will be literal one-stop-shops for sustainable energy, from power generation (via solar panels), energy storage (Powerwalls—the battery packs the company announced earlier this year), and electric vehicles. Integrating Tesla’s Powerwall storage systems with Solar City’s solar panels also promises to remove some duplication—currently both storage and generation systems have to have their own control computers and modems, connecting to different clouds.
“Tesla’s goal is to accelerate the advent of sustainable energy. You need energy generation, storage, and electric transport,” Musk said. “We need those three ingredients to have a good future. I don’t think of us an automotive company; the world doesn’t lack automotive companies, it lacks sustainable energy companies. That’s the fundamental good Tesla will achieve.”
Musk and Solar City’s CEO Lyndon Rive said that the focus will be on both residential and business customers. According to Rive, Solar City’s Demand Logic product is already very successful with commercial buildings, growing 300 percent year-on-year and that the company has 100MWh-worth of contracts with commercial customers.
There were no firm timelines given for the deal, which should be somewhere between $2.5 and $3 billion if approved, as both companies’ shareholders need to complete their due diligence procedures before voting. But as long as that goes ahead relatively quickly, Musk thought that you might be able to buy an integrated solar system at your local Tesla shop sometime next year.
Listing image by Image courtesy of Twin Creeks Technologies