Solar installer SolarCity Corp (NASDAQ:SCTY) and electric car maker Tesla Motors Inc (NASDAQ:TSLA) have announced the latest in a series of cooperative projects.
For years the two companies have worked together on solar and storage pilot projects. On Tuesday SolarCity announced that it will use Tesla batteries for a solar project that is underway in Hawaii.
SolarCity to use Tesla batteries in project for Hawaii utility
The linkup comes as no surprise seeing as Elon Musk is founder and CEO of Tesla, as well as Chairman and major shareholder in SolarCity. According to a company release SolarCity “made the selection after conducting a comprehensive competitive solicitation in the battery marketplace.”
A facility is set to built on Kaua’i island for Kaua’i Island Utility Cooperative. It is the latest step in Tesla’s drive to use its batteries with solar panels, the national grid, or connected to buildings. The two companies have been working together since 2010 with the aim of installing batteries in commercial buildings, homes and for utilities.
According to an announcement made last year, Tesla plans to sell Powerwall and Powerpack battery units. The company has been producing units at a factory outside Reno, Nevada, and Musk says that demand for the batteries has been huge.
Clean energy continues to forge ahead on the islands
This latest SolarCity collaboration will be part of a solar and energy storage system spread across 50 acres to the north of the city of Lihue. SolarCity will install 13 megawatts of Tesla batteries, which is quite small in terms of power generation but is relatively large considering it is a grid-connected battery project.
The batteries will be used to generate power at night and at other times when the solar panels are not producing energy. Under the terms of the contract the utility will pay SolarCity 14.5 cents per kilowatt hour for 20 years.
Other utilities use batteries to meet extra demand during times of peak energy usage, such as hot summer afternoons. The Hawaii project shows how batteries can be used to make solar power more competitive.
For years Hawaii has had some of the most costly and carbon-intensive power in the U.S., because much of it is generated from oil shipped to the islands. Perversely this has helped clean power make headway on the islands because the price differential is smaller.