SolarCity, the solar energy company that Elon Musk helped found, has been on a tear over the past several years, adding thousands of employees, expanding across the country, and building what will be North America’s largest solar panel manufacturing facility in Buffalo, New York. Now it has a new claim to fame: maker of the world’s most efficient solar panels.
Later today at an event in New York City, SolarCity founder and CEO Lyndon Rive will announce that his company’s forthcoming rooftop panels will be the most efficient in the world, with a module efficiency of just over 22%. (The measurement refers to how much energy the panels generate. Industrial-scale panels can have much higher efficiencies, but the result is a breakthrough for a product that is small enough and affordable enough to go on your roof.) Calling the new super-efficient panels the “holy grail” of home solar energy, Rive says that they’ll help reduce costs while making renewable energy work for an ever-growing percentage of Americans. “This opens up the market,” says the 38-year-old South Africa native.
SolarCity, which is worth roughly $4 billion and has market share among residential customers that is nearly three times its closest competitor, has come a long way from its startup days. In 2004, Musk, Rive’s cousin and now SolarCity’s chairman, pitched him and his brother Peter on the idea of starting a solar energy company while they were driving to the Burning Man festival. They launched the company two years later as a panel installer, using off-the-shelf mounting hardware and made-in-China solar panels, and focusing on making the process of buying a home solar system as easy and as affordable as possible. SolarCity employees wore spiffy green uniforms and used advanced software to help customers figure out if going solar made sense.
Rive says that the approach was met with skepticism; the idea of employing a large staff of installers–high tech construction workers, essentially–seemed to many venture capitalists expensive and unworkable. “They said you’re better off outsourcing the installation and have others do the work for you,” says Rive. “We found that it’s better to do it yourself. You can maintain the customer experience and reduce your cost.”
As SolarCity grew the company began taken over functions it had previously outsourced, offering financing for the panels so that customers could opt to pay a monthly fee rather than paying thousands of dollars outright, and then manufacturing its own mounting hardware. The moves helped bring costs down, and also helped SolarCity broaden its appeal, but Rive says it became increasingly clear that the company needed to make its own panels.
Though prices for solar panels have fallen–from $4 per watt in 2008 to around 65 cents today–prices for better, more efficient panels that produce more energy, have remained stubbornly high. “Nobody was making high-efficiency low-cost modules,” says Rive, who considers this the “holy grail” for pushing solar adoption, because the more energy a home’s solar panels generate the more affordable solar power becomes. “If no one going to do it, you have to do it yourself.”
Last year, the company bought Silevo, a solar panel startup, for a reported $200 million and began planning its factory in western New York. The result of those moves are the new panels that Rive is unveiling today, which will produce at least 30% more power, while reducing the cost of installing solar panels on one’s roof by between 20 and 30 cents per watt. It doesn’t sound like a lot of money, but given that Solar City pays just $2.90 to install a watt of capacity, it’s a big savings.
The improved cost structure should help SolarCity bring renewables further into the mainstream. Just 2% of the total energy produced in the U.S. comes from the sun, but, as Rive points out, solar energy accounts for a large share, 35%, of new energy production–ahead of natural gas, wind power, and everything other power source. “That,” Rive says, “is pretty neat.”