For the most part, conventional power producers have been safe from the threat of “free” solar power energy producers, but a recent collaboration between Tesla Motors and SolarCity could up the threat level.
Solar power has always had a few problems that have prevented its overtaking conventional power production, specifically expense, efficiency, and backup solutions. Conventional power producers have dealt with this by switching over to peak power pricing, charging a premium on electricity consumed during peak hours. However, thanks to improvements in solar panel technology and manufacturing processes, solar panels are more efficient and cheaper than ever before, which has caused some problems between solar power producers and conventional power producers.
In Arizona, for example, solar power production has grown by about 10% in just the last quarter, which has cut into the revenue that conventional power producers collect during peak hours. Arizona Public Service went to court over the metering laws that have enabled consumers, industry, and commercial entities to circumvent the peak power premiums. If someone develops a reliable backup for solar power installations, this could really put the squeeze on conventional power production.
SolarCity and Tesla Motors, brainchildren of South African entrepreneur Elon Musk, are coming together to produce just such a backup storage option for some of their commercial customers. The system is called DemandLogic, which essentially turns your private solar power installation into a microgrid. Battery packs, using the same lithium-ion battery technology found in the Tesla Model S, store electricity from the solar panels. The main idea is to have this backup power for use when solar power production drops or when there is a power outage. Theoretically, one could program DemandLogic to release this stored energy at the same time conventional power producers are charging a peak power premium. The conventional power producers won’t be happy about that!