Elon Musk Makes Room For Utilities Under Tesla's Solar Roof

Saying that Tesla Motors has been, from the beginning, a sustainable energy company, Elon Musk conceded Friday night that homes with Tesla roofs, Tesla Powerwall batteries and Tesla automobiles cannot displace centralized electric utilities.
But that's actually good news for Tesla, which has turned utilities into customers since it began offering utility-scale Powerpack batteries a year ago.
"The solution is both local power generation and utility power generation. It’s not one or the other," Musk said during a press conference at Universal Studios, where Musk and his cousin Lyndon Rive, CEO of SolarCity, announced Tesla's new solar roof product to a select crowd of reporters and acolytes surrounded by Tesla-roofed homes.
As Musk described each type of Tesla roof tile with embedded solar panel—including French slate and Tuscan tile—garage doors slowly rose on the homes and Tesla cars rolled out of garages equipped with Powerwalls.
Musk predicted neighborhoods will gradually convert to this scenario modeled at Universal Studios, because the roofs, like the cars, are better than their conventional counterparts, he said.
"The goal is to have solar roofs that look better than a normal roof, generate electricity, last longer, have better insulation, and actually have an installed cost that’s lower than a regular roof plus the cost of electricity. Why would you buy anything else?"
But even in a world equipped with such homes, utilities will still supply two-thirds of the world's power, Musk predicted. That's because a sustainable society must electrify heating and transportation—two necessities currently powered by fossil fuels.
"We’re actually going to need utility power to increase and we’re going to need local power generation," Musk said.
Tesla stands to gain from both. Musk announced second-generation models of the residential Powerwall and the utility-scale Powerpack this week. Both have double the energy density of last year's models.
The Powerpack sells for $445/kWh, well above the $250 Musk predicted at last year's unveiling, but he expects economies of scale at Tesla's Gigafactory to reduce the price 30 percent—to just above $300, when full production commences. That's still well below the threshold at which utility-scale batteries can save utilities more than they cost, at least in some regions.
"I think it’s a very bright future for utilities," Musk said, "and for rooftop."

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