SolarCity, duke of the rooftop, expands into solar farms

By David Ferris | 05/06/2016 08:01 AM EDT

SolarCity, the country’s largest installer of rooftop solar panels, announced yesterday that it is seeking a bigger customer: the electric utilities, for which it intends to build and operate power plants that are both solar farms and battery hubs.

This marks the first time a rooftop solar installer has offered centralized power plants that could directly compete with traditional, fossil fuel ones. The news wasn’t unexpected, since SolarCity has been building a utility-scale data platform and has contracted recently with power companies in California and Hawaii on pilot projects. Yesterday, it announced another in Connecticut.

Intriguing questions exist about the role energy storage will play in the offering, considering SolarCity’s close relationship with Tesla Motors Inc. SolarCity’s chairman is Elon Musk, the CEO of Tesla, which in addition to its attention-grabbing electric cars has marketed its own energy storage solutions to both homeowners and power companies. Tesla also recently reported record-breaking shipments of batteries to SolarCity (Greenwire, April 25).


The announcement came as SolarCity’s stock lost $3 in value yesterday, continuing a decline that has dogged it since the start of the year. Last year, the company scaled back its torrid growth plans in order to appease investors seeking a profit. SolarCity has had disappointing earnings reports recently, and comes out with its first-quarter earnings report Monday.

SolarCity officials were unavailable yesterday to comment on the company’s news.

The California firm says it will finance, build and operate its power plants and will sell the output to utilities through power-purchase agreements. It is steering potential customers to buy into a combination solar farm and energy storage facility, which could allow a power company to reduce the need for electricity generation during times of peak demand and to shift chunks of the grid’s load from one time of day to another.

It will also launch a service called "Distributed Energy Solutions" to "offer grid planners and operations increased flexibility as they work to modernize the grid." The inputs from the grid edge, as distributed power generation is sometimes called, include rooftop solar arrays and batteries and could fulfill a number of roles on the grid, including frequency regulation, peak shaving, flexible ramping and voltage support.

In an announcement, SolarCity pointed to its work with Kauai Island Utility Cooperative. There, SolarCity built a 12-megawatt solar farm and is at work on a 13 MW installation that will also incorporate a 52-megawatt-hour battery system. It is also building a 13 MW solar farm with a 6 MWh energy storage system for Connecticut Municipal Electric Energy Cooperative. That project encompasses seven sites and nearly 57,000 panels, according to the company.

SolarCity is also part of a $4 million pilot program with Southern California Edison Co. that is a first stab at an aggregated offering, rather than a centralized power plant. In that project, 50 homes are being outfitted with solar panels, batteries, and smart inverters and thermostats. Collectively, they are intended to provide grid support to Southern California Edison and other services into California ISO, the state’s grid operator.