Tesla and SolarCity: Commercial Solar Energy

Tesla’s lithium-ion battery packs, which power the luxury sports sedans, have a value beyond the auto industry. The commercial building sector has a growing demand for reliable, affordable, sustainable energy. Increasingly, business owners are turning to commercial solar energy.

That’s why Tesla and SolarCity have partnered to provide batteries for businesses that want to cut their utility bills. Big retailers using SolarCity rooftop photovoltaic arrays can install and charge Tesla’s battery packs using solar power. Then, businesses can use their reserve solar power when demand and electricity rates spike. The battery packs will allow businesses to minimize their usage of peak demand electricity, which typically costs more and occurs during business hours.

The best part is that SolarCity’s system, called DemandLogic, costs almost nothing. The monthly payments for energy storage that businesses spend on the system will be less than the money saved by reducing their peak hour usage. Solar City estimates that DemandLogic will save commercial customers about 20% in demand charges. To date, the company has signed up 300 residential customers and installed battery systems for about 100. SolarCity expects to add about 20-30 systems each month.

The company is serious about it’s vision for solar energy. “You’re still connected to the grid but the grid would be your secondary provider and the primary provider would be your solar system and your storage device,” SolarCity chief executive Lyndon Rive told The Atlantic. The relationship is aided by the relationship between Tesla and SolarCity–Elon Musk, Tesla CEO, serves as SolarCity’s chairman.

Unfortunately, SolarCity is currently offering DemandLogic in just three states: California, Massachusetts, and Connecticut. Businesses who are interested in solar energy need to have solar-friendly buildings (low-rise, flat roof) to take advantage of the service.

Our recommendation is that businesses pursue higher building efficiency before investing in solar energy. The reason is simple: if you’re building is using 20-40% less energy to begin with, it becomes easier to supplement or replace your electric utility with renewable energy.