Peter J. Rive, co-founder and chief technology officer of SolarCity Corp., views the company’s huge solar panel factory now under construction in South Buffalo as a vital part of the future for the installer of solar energy systems.
With the ability to churn out enough solar panels to install rooftop systems on 450 homes every day it operates, the factory will be at the heart of SolarCity’s operations, Rive told an audience at the University at Buffalo on Wednesday.
“It will be the heartbeat for the cadence of our deployment as time goes on,” Rive said.
The factory, once it is running at full capacity, will manufacture about 550,000 solar cells per day. With each solar panel made up of 60 such cells, the factory will be able to produce roughly 8,500 panels per day.
The $900 million factory is being built by the state, through Gov. Andrew M. Cuomo’s Buffalo Billion economic-development initiative. When the factory opens next year, it will be the biggest of its kind in the Western Hemisphere.
Because the panels that SolarCity plans to make will be more efficient than most conventional solar modules used today, the company expects the switch to high-efficiency panels will reduce its costs, Rive said.
That’s because the high-efficiency panels, which are able to convert about 21 percent of the sun’s energy into electricity, compared with 15 to 18 percent for most conventional panels, will allow SolarCity to generate the same amount of electricity with fewer panels. A SolarCity rooftop system using panels from the factory at RiverBend will need just 18 panels to produce the same amount of electricity as a conventional system that uses 24.
Solar panels become less efficient as temperatures rise, but Rive said the panel that SolarCity makes in Buffalo will do better than conventional modules in high temperatures, further increasing their output. Overall, SolarCity expects the panels it makes here to harvest nearly 8 percent more energy than conventional panels over the course of a year, Rive said.
Fewer panels also means that SolarCity will be able to reduce some of its other installation costs, such as wiring and mounting systems. Rive estimated that SolarCity will be able to reduce its solar panel costs to about 55 cents per watt, or about 10 to 15 cents less than it now pays. Its costs for other components could decline by an additional 10 cents.
“All of the costs go down,” said Rive, who co-founded the company in 2006 with his brother, Lyndon, who is SolarCity’s CEO.
Lowering its costs is a big focus for SolarCity. The company scaled back its growth forecasts to a little more than 40 percent this year, down from its earlier guidance of more than 80 percent, in an effort to stem losses. As part of that effort, SolarCity pushed some of its expected investment in the Buffalo factory into next year.
Despite a favorable move by Congress in December to extend a key 30 percent federal tax credit on new solar energy systems that had been set to expire at the end of this year, SolarCity’s stock has lost more than half of its value in the last three months. On Wednesday, it closed at $26.20, up by $1.12, or 4.47 percent.
Investors were disappointed by the company’s fourth-quarter installations and its forecast that first-quarter growth would be soft because of a pullout from the Nevada market after regulators there changed rules that lowered the amount that homeowners are paid for the excess power that their rooftop arrays produce. “We must lower costs,” Rive said. “It is a subsidized business. It’s a knife in our back that we want to get rid of.”
SolarCity installed 37 percent of residential rooftop solar in the United States last year, but overall, less than 1 percent of all homes have solar arrays on their roofs, he said. Even in the states where SolarCity operates, less than 2 percent of all homes have rooftop systems.
“The opportunity is quite massive,” he said.
“Actual penetration is still incredibly low,” Rive said. “It will take many decades until we’ve reached the point where we’ve deployed enough solar on rooftops.”
Rive’s appearance came as a new report predicts that the U.S. solar energy market will more than double this year, with much of the growth coming from large, utility-scale solar projects. The report from GTM Research also forecasts that residential solar installations, which make up the bulk of SolarCity’s market, topped 2,000 megawatts last year and are expected to rise both this year and in 2017. By 2019, annual residential installations are expected to double to more than 4,000 megawatts.
Rive said growth of solar over the next decade, including utility-scale projects and commercial installations, will require systems to have batteries to store power for use at peak times. Without storage, Rive said, solar generation during midday could eventually outstrip demand at certain times. Adding batteries to solar arrays would allow that power to be stored for use at night or at times when demand is highest.
But Rive said electricity prices in Buffalo are too low for SolarCity to target the market for installations. “It’s just a little too cheap for us,” he said. “In the long term, I think we will be able to do it.”
Rive also addressed the 2016 presidential campaign.
“Anybody who does not believe in climate change, I would not be a big fan of,” he said.
Democratic front-runner Hillary Clinton has “a pretty good perspective on the challenges of climate change,” Rive said. “I’ve yet to see that from the Republican front-runner,” referring to Donald Trump.