The solar energy company has a simple concept: creating low-cost but highly efficient solar panels that would allow more people to adopt solar power.
Since Musk to his cousin Lyndon Rive, now the company鈥檚 head, while driving to the Burning Man festival in 2004, SolarCity, which launched in 2006, has become the nation鈥檚 largest residential installer of solar panels.
A large part of the company鈥檚 success has been due to its manufacturing strategy 鈥� employing installers directly, using low-cost hardware, and introducing a leasing strategy that allows customers to pay a monthly lease to get solar power without buying the hardware themselves. In 2014, the solar power start-up Silveo, which had been manufacturing solar panels with an efficiency of 21 percent, along with a rack-mounting company called Zep Solar.
In October 2015, SolarCity introduced panels with improved efficiency, at a cost of $0.55 per watt. That鈥檚 reportedly one percentage point more than those of its nearest competitor, the longterm installer Sun Power, which makes more expensive panels.
鈥淣obody was making high-efficiency, low-cost modules," Mr. Rive , calling this the 鈥渉oly grail鈥� to increasing the adoption of solar panels, because increased efficiency will eventually drive prices down and make them comparable to traditional fossil fuels.
The company says it been able to achieve this by producing panels that are similarly sized to competitors, but produce 30 to 40 percent more power. They also claim the panels will perform better than its competitors in high temperatures. After acquiring Silveo, it introduced plans to produce up to 10,000 panels per day in a 1 gigawatt factory in Buffalo, N.Y.
While some experts note that the increased efficiency may not be a milestone in itself 鈥� the typical panel boasts an efficiency of 18 to 22 percent 鈥� SolarCity鈥檚 gains in lowering costs could dramatically increase adoption of solar energy. While the company will use some external suppliers, the factory鈥檚 efficiency is intended to spur innovation, Musk says.
鈥淲e thought we had to make our own panels," Musk said in announcing the new panels. "I like counter-intuitive moves. I thought people would think, at the time, 'Wow, that鈥檚 stupid,' " making him think, "That鈥檚 probably a good idea."
