SolarCity Corp (NASDAQ:SCTY) shares rose as much as 3 percent Wednesday afternoon after the company’s CEO announced the development of a new product. CEO Lyndon Rive told Bloomberg that in 2015, the company will introduce a package of solar panels which come with a battery.
SolarCity To Cut Dependence On Utility Companies
Bloomberg’s Christopher Martin reports that the solar panels in the bundle will produce energy during the daylight hours, while the battery will store the power so that it can be used at night. According to Rive, the company will test the bundle at 100 different locations this year.
Rive said the storage will basically cut utility companies out of the equation. Currently solar panel systems use a setup referred to as net metering, in which the excess energy generated by the solar panels is sold back to the utility company. In return, the place where the solar panels are located runs on electricity provided by the utility company through the grid at night or on days when clouds are preventing the solar panels from generating their maximum amount of power.
SolarCity Teams Up With Tesla
SolarCity Corp (NASDAQ:SCTY) and Tesla Motors Inc (NASDAQ:TSLA) are teaming up for the new product, with Tesla making the batteries for the project. Tesla CEO Elon Musk is chairman of SolarCity and also Rive’s cousin.
According to Rive, the falling price of batteries makes it possible for him to include storage costs while also providing electricity to homes and businesses in Hawaii and California while still beating the energy rates offered by utility companies.
SolarCity And Utility Companies
At this point, 43 states have net metering policies in place, and according to Rive, adding batteries mitigates the risk that regulators will change or even completely get rid of those policies. Rive said consumers will still be able to be on the grid and receive power from their utility company if they need it. Also by adding batteries to its solar panels, SolarCity Corp (NASDAQ:SCTY) is much less reliant on the net metering policies that are currently in place.
There have been some concerns that net metering could be challenged. Utility companies in Arizona and California are putting up challenges because it cuts down on their revenue.