The bad news is that SolarCity, the power-generating company that has Elon Musk as its chairman, is losing money. The good news is that it’ll be rolling out a new product: a roof with built-in solar arrays.
He said the integrated, power-generating roofing structure would be a “fundamental part of achieving a differentiated product strategy” for SolarCity.
Peter Rive, SolarCity’s chief technology officer and Musk’s cousin, said the company would ramp up production of the roofing components at its factory in Buffalo, N..Y., in the second quarter of next year.
Today, SolarCity relies on working out deals to place solar panels on homes and other buildings. That business strategy hasn’t yet brought SolarCity to profitability. This week the company announced that its second-quarter net loss was $55.5 million, compared with a year-ago loss of $22.4 million.
That news led to a decline in Solar City’s share price in early trading today, at levels below the $25.37 price specified in the Tesla merger agreement.
If SolarCity can offer integrated solar roofs as well as retrofitted solar panels, that has the potential to widen the market opportunities – not only for the combined companies’ power-generating services, but for Tesla’s power storage batteries as well.
SolarCity CEO Lyndon Rive, who is Peter Rive’s brother, noted that 5 million new roofs are installed in the United States every year.
“The interesting thing about this is that it actually doesn’t cannibalize the existing product of putting solar on a roof,” Musk said. “If your roof is nearing end of life, you definitely don’t want to put solar panels on it because you know you’re going to have to replace the roof, so there’s a huge market segment that is currently inaccessible to SolarCity.”
Musk said that developing the roof technology has been “quite a difficult engineering challenge,” and that the system will be unlike any other product available.
He said the roof would be custom-made and delivered as a kit for installation, but he didn’t discuss how the price would compare with traditional roofs. “We don’t want to show all our cards right now,” Musk said.
Neither Tesla nor SolarCity are in the black yet, but both companies figure prominently in Musk’s recently updated “master plan.” That plan envisions introducing two new Tesla vehicles: a heavy-duty truck known as the Semi, and a high-passenger-density urban transit vehicle.