SpaceX and the Quest

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SpaceX and the Quest ( spacex-and-quest )

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two most successful clean-tech companies in the U.S. We would rather explain his success as being a fluke. There’s the whole Iron Man thing in which he’s presented as a cartoonish businessman—this very unusual animal at the zoo. But there is now a degree to which you have to ask whether his success is an indictment on the rest of us who have been working on much more incremental things. To the extent that the world still doubts Elon, I think it’s a reflection on the insanity of the world and not on the supposed insanity of Elon.” SolarCity, like the rest of Musk’s ventures, did not represent a business opportunity so much as it represented a worldview. Musk had decided long ago—in his very rational manner—that solar made sense. Enough solar energy hits the Earth’s surface in about an hour to equal a year’s worth of worldwide energy consumption from all sources put together.20 Improvements in the efficiency of solar panels have been happening at a steady clip. If solar is destined to be mankind’s preferred energy source in the future, then this future ought to be brought about as quickly as possible. Starting in 2014, SolarCity began to make the full extent of its ambitions more obvious. First, the company began selling energy storage systems. These units were built through a partnership with Tesla Motors. Battery packs were manufactured at the Tesla factory and stacked inside refrigerator- sized metal cases. Businesses and consumers could purchase these storage systems to augment their solar panel arrays. Once they were charged up, the battery units could be used to help large customers get through the night or during unexpected outages. Customers could also pull from the batteries instead of the grid during peak energy use periods, when utilities tend to tack on extra charges. While SolarCity rolled the storage units out in a modest, experimental fashion, the company expects most of its customers to buy the systems in the years ahead to smooth out the solar experience and help people and businesses leave the electrical grid altogether. Then, in June 2014, SolarCity acquired a solar cell maker called Silevo for $200 million. This deal marked a huge shift in strategy. SolarCity would no longer buy its solar panels. It would make them at a factory in New York State. Silevo’s cells were said to be 18.5 percent efficient at turning light into energy, compared to 14.5 percent for most cells, and the expectations were that the company could reach 24 percent efficiency with the right manufacturing techniques. Buying, rather than manufacturing, solar panels had been one of SolarCity’s great advantages. It could capitalize on the glut in the solar cell market and avoid the large capital expenditures tied to building and running factories. With 110,000 customers, however, SolarCity had started to consume so many solar panels that it needed to ensure a consistent supply and price. “We are currently installing more solar than most of the companies are manufacturing,” said Peter Rive, the cofounder and chief technology officer at SolarCity. “If we do the manufacturing ourselves and take advantage of some different technology, our costs will be lower—and this business has always been about lowering the costs.” After adding the leases, the storage units, and the solar cell manufacturing together, it became clear to close observers of SolarCity that the company had morphed into something resembling a utility. It had built out a network of solar systems all under its control and managed by the company’s software. By the end of 2015, SolarCity expects to have installed 2 gigawatts’ worth of solar panels, producing 2.8 terawatt-hours of electricity per year. “This would put us on a path to fulfill our goal to become one of the largest suppliers of electricity in the United States,” the company said after announcing these figures in a quarterly earnings statement. The reality is that SolarCity accounts for a tiny fraction of the United States’ annual energy consumption and has a long way to go to become a major supplier of electricity in the country. There can, however, be little doubt that Musk intends for

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