Elon Musk is changing the world. The visionary South African-born entrepreneur has radically changed the transportation sector through his groundbreaking companies Tesla and SpaceEx. His solar leasing company, SolarCity, is delivering affordable solar solutions to homeowners across the country. Now, Musk is poised to deliver a sea change in the battery industry, opening the door to massive advancements in clean technology.Inadequate storage technology, namely batteries, has been the main bottleneck in preventing price parity and full scalability of electric vehicles, renewable energy systems, and other clean technology innovations. Musk may become the heartbeat of colossal transformation in the battery sector: he has committed to invest $5 billion to develop a battery “gigafactory”. Scheduled to open in 2017, the gigafactory will have the capacity to double the current global production of lithium-ion batteries, catapulting the U.S. into a commanding industry leadership position (with production levels higher than China, Japan, and South Korea combined).
Lithium-ion batteries are the source of power these days for everything from cell phones to the luxurious electric Tesla. Despite growing demand, the price of these batteries remains high. Musk is making calculated risk that by increasing production of these batteries, prices will be driven down so that he can mass-produce electric vehicles that are affordable for the average American family. In fact, Musk is so confident about his gigafactory that he projects that he can drive battery prices down by 30% by 2017 and 50% by 2020.
Musk realizes that better, cheaper batteries are not only beneficial for electric vehicles, but for renewable energy systems as well. “With this facility,” he says, “we feel highly confident of being able to create a compelling and affordable electric car in approximately three years. This will also allow us to address the solar power industry’s need for a massive volume of stationary battery packs.”
Now that prices for solar panels are effectively half what they were just a few years ago and innovative solar leasing programs are defraying upfront system purchase costs, the solar industry is already experiencing unprecedented growth. As battery technology continues to improve, this massive and rapid adoption will continue.
As renewable energy solutions proliferate and become financially desirable, power companies will struggle to keep pace with decentralized renewable micro-grid and point of use generation systems. Increased consumer defection will force utilities to rethink their power generation and delivery strategies, which could negatively impact the oil, gas, and coal companies that are already struggling with the certain reality of stranded assets on their balance sheets (for more information, read The Demise of Utilities).
As NRG President and CEO David Crane says, “There is no energy company that relates to the American energy consumer by offering a comprehensive or seamless solution to the individual's energy needs. There is no energy company that connects the consumer with their own energy generating potential. There is no energy company that enables the consumer to make their own energy choices. There is no energy company that empowers the individual wherever they are, whatever they are doing, for however long they are doing it. And there is no energy company that the consumer can partner with to combat global warming without compromising the prosperous ‘plugged-in’ modern lifestyle that we all aspire to — not just for us who are so blessed to live a prosperous life in the United States, but for the billions of people who live in the developing world and aspire to what we already have.”
Enter Elon Musk, who once again has a revolutionary solution that may just turn the traditional energy industry on its head, driving us towards a new clean energy frontier that finally empowers buyers and brings choice back into purchasing decisions.
As batteries become more economical, smaller, and easier to charge, it is estimated that renewable solutions like solar and on-shore wind will actually become cheaper than grid electricity in most of the world by 2025. With adequate storage capability, home, business, and building owners across the nation will no longer be held hostage by dilapidated infrastructure, outages caused by extreme weather events, or antiquated utilities. And, with affordable battery technology, the cost of onsite (or community-based) power generation becomes a profitable proposition, especially if a home or building owner can sell excess capacity back to the traditional grid.
When it comes to energy, we are on the crest of a technological tsunami. Fortunately, this wave is certain to deliver sustainable solutions that propel us into a greener, cleaner future.
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