BUSINESS

Why Elon Musk Is Betting On Solar Power Instead Of Wind

“I think we can solve the problem with the giant fusion reactor in the sky called the sun.”

Elon Musk doesn’t see a place for a wind power division in his expanding clean-energy empire. 

The Tesla chief announced plans on Tuesday to transform his electric automaker into the world’s first sustainable energy behemoth by merging the Model S maker with one of his other companies, SolarCity.

“I don’t think we’re going to get into [wind],” Musk told The Huffington Post on a conference call after announcing the bid, worth up to $3 billion. “I think we can solve the problem [of renewable energy] with the giant fusion reactor in the sky called the sun.” 

That isn’t to say wind power won’t play some part in Tesla's effort to refashion itself as an energy company.

The plan involves ramping up production of the lithium-ion batteries Tesla uses to power its vehicles. Last year, the company released the Powerwall, a standalone battery system based on that same technology. The Powerwall enables everyone from individual homeowners to utility companies to store excess energy produced when the sun is out or wind is blowing. Tesla, which partnered with SolarCity for to launch the Powerwall, has marketed the product as an ideal add-on to a home solar system, but the devices work just as well with any other electricity source, including wind turbines. 

Wind and solar power have both gotten cheaper in recent years, and the trend will continue over the next several decades, according to a recent report from Bloomberg New Energy Finance (BNEF). Solar and wind will be the "cheapest ways to produce electricity" for most of the world by the time we reach the 2030s, the report says.

Meanwhile, BNEF says new investment in clean energy has climbed in America over the last decade, with solar energy edging out wind in the past couple of years.

Solar has generally seen more new investment than wind in America recently. Numbers seen here represent billions of
Solar has generally seen more new investment than wind in America recently. Numbers seen here represent billions of dollars.

Major corporations like Apple and Google have invested heavily in solar energy. While solar and wind are both cost-effective ways to generate power, wind has a number of unique challenges: Turbines are noisy and can disrupt or even harm wildlife, and they generally need to be built at remote locations far from the urban centers where energy is needed.

Not that location isn't a concern for green energy generally. Unlike drums of oil, trainloads of coal or tankers of gas, it’s difficult to move solar or wind energy from place to place. Tesla is betting big that its lithium-ion packs can do the trick, and has invested billions to build the world’s biggest battery factory in Nevada. The so-called Gigafactory is slated to begin production next year.

“Wind, I think, will be part of the equation,” Musk said. “But I think the wind companies are doing fine, and where wind is applicable they seem to be doing a good job of generating that.”

Once the Gigafactory goes live, Musk said he hopes to leverage the company’s manufacturing muscle to increase and streamline production for existing products by Tesla and, if the merger is approved by shareholders, SolarCity.

“There are benefits to sharing knowledge, assuming we’re going to be a combined company, on the manufacturing front and scaling up production and figuring out how to build the machine that builds the machine,” Musk said. “Tesla is hellbent on becoming the best manufacturer in the world.”

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