Want to see the future? Watch Elon Musk.
Many of us are well aware that Musk became the king of sports carmakers when his electric Tesla S became the best-selling model in early 2013.
A few years ago, his company was on the verge of bankruptcy and close to defaulting on his federal Energy Department loan guarantees, a la Solyndra (a solar panel company that underestimated the ability of Chinese companies to make much cheaper panels).
Tesla Auto is now riding high and may be worth billions.
Another Musk venture, SpaceX, a developer of private spaceships, was near death a few years ago.
If his first test vehicle had crashed and burned (as they sometimes do) his Energy Department loans would do likewise. But the test was successful, and so is SpaceX, a “trucking” company supplying the space station, now that all the NASA shuttles are in museums, and NASA is looking for other worlds to conquer.
Musk’s third new venture is SolarCity. The mission is to lease rooftop solar electric systems to homeowners. They are purported to have equipped upwards of 100,000 homes, mostly in California.
Although hardly a mature operation, SolarCity seems to be keeping its federal loan guarantees above water. All three risky ventures could not have found financing in the public marketplace. The fact that all three are doing well should mollify those who criticize Solyndra-style financing.
A recent newsworthy event was a Musk announcement that SolarCity had formed an alliance with Honda Motors. To what end? After all, Musk already has a successful electric car. Perhaps it’s because of a recent publication by the Edison Institute (the think tank of the electricity industry) that home solar would soon make the homeowner energy independent and thus disrupt the business plans of the nation’s electric utilities.
Home solar systems gather the sun’s rays starting at the crack of dawn and supply the home with whatever electricity it needs during the day. In today’s home, however, there might not be much going on during the day. But if more electricity is generated than needed, it can be fed back through the meter (reverse metering) and the utility must credit the homeowner for the contribution at a substantial rate.
Trouble is, the utility doesn’t need the excess energy any more than the homeowner does. The utilities are beginning to grumble and lobby to get the reverse meter laws changed. The “electric” lobby is quite strong. The solar lobby is non-existent. They don’t even have a solar parking lot.
As we noted in a previous column, large, low-cost storage batteries could allow the homeowner to store excess daily solar electricity in his own on-site battery to be used after dark to supply the home’s needs as well as recharge the family’s electric car. Thus, the family could ostensibly acquire all the electricity it needs from its captive solar system and pay nothing for its electricity, including fuel for the family car.
But what if on very dark day insufficient electricity is generated? The Edison report drew an analogy to the telephone business.
Back in the 70s, AT&T had a virtual monopoly in the telephone business. They were then forced to divest themselves of local telephone service and set up seven geographical phone companies. These “Baby Bells” quickly jumped into the emerging cellphone business. It was obviously successful and cellphone users soon switched to “free” long distance on their mobile phone. Many kept their land line for backup when cell reception faltered.
AT&T was left with zillions of telephone poles and wires to maintain, but with precious little long distance revenue. They withered and nearly died.
In an ironic twist, Southwestern Bell, a cellphone powerhouse, bought the AT&T shell and renamed itself AT&T. Once again, AT&T is one of the biggest telephone companies in the world.
The Edison report suggests that homeowners would similarly keep their connection to the electric grid, but use it only on occasional dark days. Not unlike AT&T in the 70s, the electric utilities would be left with millions of miles of electric power lines and poles to maintain with much less revenue.
If this scenario seems reasonable, Honda will become a major producer of electric cars and SolarCity will add home storage batteries to its leasing inventory and they both will work on persuading consumers to buy Honda electric cars and leasing SolarCity’s very compatible solar generating and home storage system.
Looking ahead, solar seems the best-positioned source of future energy. All fossil fuels are suspect, although some will destroy the planet sooner than others. Wind energy will have some potential, but it will be difficult to persuade homeowners to place huge windmills on their roofs, or in their backyards.
We also wish well to those trying to make gasoline out of garbage and pond scum. But maybe they have listened all too intently to Thomas Edison’s advice that “there is a way to do it better — find it!”