By Steve Hargreaves and Courtney St. John
It may not be as monumental as the Nov. 8th election, but there’s another looming vote that will have big implications for clean energy — the Nov. 17th vote by Tesla shareholders on the proposed takeover of SolarCity.
There’s plenty of reason to be skeptical of the tie-up between the electric car maker and the rooftop solar panel installer — both largely controlled by tech entrepreneur Elon Musk.
Many see the plan as a thinly veiled attempt to funnel money from the (barely) more successful Tesla to SolarCity, which is struggling under changes to state subsidy policies, increasing competition and a business model that prioritizes growth over profits, which is also potentially outdated due to its reliance on leasing the panels over buying them outright.
Yet, to many, Musk’s plan makes sense.
Last week, Institutional Shareholder Services, an influential advisory firm, recommended the deal go through, citing cost synergies of $150 million and the relatively low price Tesla is paying for SolarCity.
Also, last week the New York Times ran a fairly supportive piece highlighting one of the places the two firms could work together — a utility-scale solar array coupled with Tesla batteries. This combination of solar power plus battery storage is what’s led Musk to call it a “no-brainer” all along.
While Tesla stock has fallen after the takeover announcement, many of the firm’s biggest investors support the plan.
“The more we researched this, the more sense it made to combine Tesla with solar panels,” Ronald Baron, founder of the mutual fund firm Baron Capital, told The New York Times shortly after the deal was announced. “We believe they can make better products, make them more efficiently, and realize tremendous savings by selling the two products together.”
If anything, the plan makes plain Musk’s ambitions. Solar panels can essentially replace a utility, the battery an oil company, and the Tesla a traditional automaker. Which, indecently, makes plain the vested interests lined up against him.
Steve Hargreaves and Courtney St. John write for Nexus Media, a syndicated newswire covering climate, energy, policy, art and culture. You can follow them at @shargrea and @CourtSaintJohn.