Tesla (NASDAQ: TSLA) and SolarCity (NASDAQ: SCTY) Built-In for New Homes
Rooftop systems for newly built homes
In May of 2015, Tesla announced their newest innovation in the lithium battery industry: a home-sized battery called the Powerwall. Though many saw it as a way to go completely off-grid, even CEO Elon Musk has said that the new technology is only meant as a back-up system for now.
That has been a problem for sales on Tesla's end.
SolarCity's solar panel kit has a set of immediate benefits that homeowners can tap into upon purchase: lower energy costs, a no-money-down lease financial formula, and tax and energy credits for using clean energy.
But the additional cost of a Powerwall, $3,000 to $3,500 depending on the kilowatt hour level you want, may not be worth it for homeowners. The returns on that kind of installment aren't immediate.
The two companies, who often support each other's technological advancements, have found the way to avoid this problem: they are selling to customers whose houses aren't built yet.
SolarCity's Homebuilder Program will offer home builders a combination deal on solar panels and Tesla Powerwall systems, hybrid inverters, and a control system before the house is even complete. Yes, it is absolutely possible to sell rooftop solar panels to people whose roofs aren't up, and it ends up being beneficial to both of the companies and their customers.
SolarCity gets contracts for more solar panels, and customers get a boost in their new home's value should they be planning to sell it.
And Tesla gets a new flow of customers for the Powerwall systems who will get more value out of the technology sooner. Where pre-existing homeowners see the $3,000 as an extra cost, that only amounts to 1% of the total price of building a home. Rather than an extra expense, the Powerwall becomes an “upgrade” option.
Already the partnership has reached out to more than 100 home builders in 300 different communities. One business connection was made with Pardee Homes, one of the top 25 home builders in America, which offered SolarCity access to 300 homes in 13 communities.
With the call for clean energy and the popularity of solar power rising, SolarCity and Tesla already have a large potential customer-base for their newly partnered project.
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Until next time,
A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.
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