SolarCity Gets Into the Electricity Distribution Business

Energy

Published: March 16, 2015 9:20 am

Last Updated: April 28, 2020 5:06 am

In an announcement Monday morning, solar PV installer SolarCity Corp. (NASDAQ: SCTY) launched a new service it calls GridLogic, a microgrid solution to electrical power distribution. Instead of building a massive utility scale solar PV plant, SolarCity envisions a distributed system of smaller plants that might serve a local community or other customers, with or without a connection to the utility grid.

SolarCity promises a turnkey system that would offer solar generation, battery storage and controllable load. Here is the company’s story:

GridLogic can provide electricity to communities for less than they pay for utility power with the added benefit of backup power for emergency services. SolarCity’s in-house grid engineering team will design and install each GridLogic project with a system of software-based monitoring and controls that manage the mix of distributed energy resources and utility power to maximize savings.

Some states are already encouraging development of decentralized energy generation capability. The New York Times reports that the state of New York’s public service commission has already released a plan to encourage such development.

A second motivating factor is the pending decline in the solar investment tax credit that drops from 30% currently to 10% at the end of 2016. That will chill enthusiasm from some current investors in solar power, so solar companies must not only develop new sources of financing, but also achieve a scale that guarantees their survival beyond the end of next year.

SolarCity is also targeting communities that want to provide a backup source of power in the event of a utility outage caused by some catastrophic event. Maintaining electrical power for hospitals, police and fire services, and for non-publicly owned necessities like gas stations and grocery stores, could be an auxiliary use for a power-generation system that also reduces the cost a municipality might be paying for utility power.

The company storage systems use advanced battery technology from Tesla Motors Inc. (NASDAQ: TSLA). Tesla CEO and founder Elon Musk is also chairman of SolarCity’s board of directors and a principal shareholder in the company.

The company also said that it will offer financing options requiring little or no upfront cost.

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