What Is Tesla’s Stake
Elon Musk, the CEO of Tesla, is already a chairman of SolarCity and helped found it in 2006.
This year, Tesla has been making moves to acquire much of the company. In March, Musk’s rocket venture SpaceX bought $90 million of SolarCity stock. In late June, Tesla submitted an offer to buy SolarCity for $2.6 billion, and in August, the company accepted.
While the Federal Trade Commission has already approved the merger, shareholders must still vote on the deal. The shop period ends Wednesday, September 14.
Tesla is also building the Gigafactory, a $5 billion battery factory in Nevada, by 2017. There, Tesla will manufacture batteries for the Model 3, as well as batteries for its storage devices, called Powerwalls.
Elon Musk Sells Another $1 Billion In Tesla Shares Nearing 10% Target
- Tesla and SpaceX CEO Elon Musk has sold another 934,090 shares, or about $1.02 billion worth of his holdings, in his electric car company according to financial filings published late Tuesday.
- Since Nov. 8, Musk has been on a selling spree. The Tesla CEO has said he is partly selling shares to pay a massive tax bill that he anticipates will amount to at least $11 billion.
- Musk also exercised options to buy nearly 1.6 million Tesla shares at a strike price of $6.24 per share, granted to him via a 2012 compensation package.
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Tesla and SpaceX CEO Elon Musk has sold another 934,090 shares, or about $1.02 billion worth of his holdings, in his electric car and solar business according to financialfilings published late Tuesday.
Musk also exercised options to buy nearly 1.6 million Tesla shares at a strike price of $6.24 per share, granted to him via a 2012 compensation package.
In exercising his options this quarter, Musk’s holdings in Tesla have increased from about 170.5 million shares to over 177 million shares, the Wall Street Journal first reported.
Since Nov. 8, Musk has been on a selling spree, partly to pay his looming tax bills on those options.
The celeb-CEO polled his followers in the first week of November asking if he should sell 10% of his stake in Tesla. They voted yes. But a major portion of the sales that followed the entertaining Twitter poll were part of a plan that Musk adopted in September this year.
Where The Value Will Be Created In Energy Storage
The valuable aspect of energy storage to utilities won’t be in the batteries themselves — those are just simple commodities. The value will be in the network of batteries that could be used as assets at a moment’s notice. If a homeowner in California had a Tesla Powerwall in their home, there wouldn’t be a great way to generate value, but if 100,000 Powerwalls were in SolarCity customers’ homes, the utility would see a lot of value. Batteries could be used in peak summer hours to reduce peak power plant costs, could take energy off the grid when there was a surge, and could even perform arbitrage when prices are high or low.
So the value is in the network of batteries and the algorithms that control the network. Tesla has the battery, but SolarCity has the ability to build the network. Musk needs to combine them to create value in energy storage. Otherwise, Tesla is selling a commodity battery to whoever wants it, with little control over the value streams that come from the energy storage system itself.
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Why Did Solarcity Raise $305 Million
SolarCity was awarded $305 million to finance new projects. Some of the company’s latest projects include a huge solar field in Kaua’i, Hawaii that will charge up batteries during the day, as well as a new battery factory in Buffalo, New York.
The company also plans to unveil two new products by the end of the year, including a solar roof.
Shares of the company were up 6.6% at $17.89 in afternoon trading on September 12, the day the funding was announced.
So What Exactly Are Tesla Solar Panels
With Panasonic out of the picture, Tesla is working with a company called Hanwha to supply their solar panels. Specifically, they use the QPeak Duo Black solar panels.
Although, when you call Tesla and ask for a quote for solar panels for your home, theres a good chance you wont even see a brand of panel listed aside your estimate.
Even though Tesla does manufacture solar roof shingles, or solar tiles, for the Tesla solar roof, they do not have their own solar panel brand. Youre likely going to have to ask for the specific makes and models but for now, Hanwha is the most likely brand.
One of the biggest benefits of a Tesla solar panel system is the aesthetic appeal. Typical solar installations include skirting, in an effort to hide all solar panel mounting hardware from the ground view, ensuring seamless integration into the roofing material. Teslas panels will also be black in appearance, which ensures the panels are as aesthetically pleasing as possible.
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Elon Musk Knew Solarcity Was Going Broke Before Merger With Tesla Lawsuit Alleges
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When Tesla bought SolarCity in November 2016, Elon Musk billed the deal as a match made in green energy heaven: Combine a hot electric car company with the nations then-largest provider of solar rooftop panels to create a one-stop shop for clean energy customers.
What Musk did not discuss at the time was that SolarCity was in deep financial trouble.
Just weeks after the merger, SolarCity auditor Ernst & Young concluded the company lacked sufficient cash to meet its obligations as a stand-alone company, according to court filings unsealed Monday that include previously redacted material.
In other words, SolarCity was nearly insolvent when Tesla shareholders voted to pay $2.6 billion for the solar panel maker and take on its debts, rescuing it from probable bankruptcy.
The filings are part of a long-running suit filed by shareholder Ellen Prasinos on behalf of all Tesla shareholders against Musk and Teslas board of directors, alleging they overpaid for SolarCity, ignored their own conflicts of interest and failed to disclose troubling facts essential to a rational analysis of the proposed deal.
One allegation: SolarCity hid information from Ernst & Young about two payments due to lenders that should have been used to determine SolarCitys financial condition.
In its motion, the plaintiff seeks summary judgment from the Delaware Chancery Court on key parts of the SolarCity case.
Tesla has not yet filed a court response.
Teslas 2016 Solarcity Acquisition Was Approved By 85% Of Teslas Shareholders
One of the top cleantech stories of recent weeks in the mainstream media has been Elon Musks trial regarding Teslas acquisition of SolarCity. We havent covered it, because we covered the acquisition years ago in depth and we dont typically cover lawsuits, but since its been so broadly covered, lets touch upon some things that may have been left out of the media coverage.
Yesterday, I stumbled upon Steve Mark Ryans video where he talked about how Elon Musk and the plaintiffs attorney went at it. I grabbed some popcorn and dove right in and learned some more details surrounding the SolarCity acquisition that I personally didnt know since I wasnt following Tesla back then. These details are well known to those who followed Tesla pretty closely for many years, back into 2016 at least, but a large number of us started following the company more recently.
CleanTechnica reader survey chart in November 2016.
There are a few key takeaways from Stevens video that I wanted to share:
- 85% of Teslas shareholders voted in favor of the SolarCity acquisition .
- Elon Musks Tesla Master Plan included plans for Tesla Energy 10 years before Teslas SolarCity acquisition.
- The acquisition led to the worlds only vertically integrated sustainable energy company.
- Mainstream media FUDs effect on the stock is weakening.
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Oregon Attorney General Investigation
On March 30, 2017, The Oregonian said that Campaign for Accountability, a D.C.-based consumer advocacy group, and other groups have asked Oregon Attorney General Ellen Rosenblum to investigate solar panel sales practices that “are designed to trick homeowners into buying or leasing solar panels” in violation of Oregon’s Unlawful Trade Practices Act. According to The Oregonian, the request to Rosenblum “singled out one company: California-based SolarCity. It outlined several complaints filed against the solar giant by Oregonians who claimed they’d been misled about costs, tax credits and energy savings by the company.”
The Campaign for Accountability reviewed 58 complaints that consumers filed with the Oregon Department of Justice and said that the complaints indicated “a widespread pattern of apparent fraud and abuse by solar companies”. The Oregon Solar Energy Industry Association, however, said that it examined the complaints and “found the numbers to be relatively low lower than those being cited by the Campaign for Accountability”.
Tesla Raised The Price Of The Solar Roof In April 2021 Musk Said This Was Because The Company Had Made Significant Mistakes
Customers who had already signed contracts for a Solar Roof but had not yet had one installed reported in April the company had jacked up the prices on their roofs.
Musk addressed the price hike in Tesla’s 2021 Q1 earnings call, saying “we did find that we basically made some significant mistakes in assessment of difficulty of certain roofs.”
Musk said roof complexity made it hard to price them accurately. “If a roof has a lot of protuberances, or if the roof sort of the core structure of the roof is rotted out or is not strong enough to hold the Solar Roof, then the cost can be double, sometimes three times what our initial quotes were,” he said.
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Federal Settlement For Allegations Of False Claims Act Violations
In September 2017, as part of a legal settlement with the federal government, SolarCity agreed to pay a $29.5 million penalty regarding allegations that the company overstated the cost of facilities it developed and submitted claims for under the American Recovery and Reinvestment Act of 2009, which would be a violation of the False Claims Act. SolarCity dropped its lawsuit, Sequoia Pacific Solar I, LLC v. United Statesin which the company alleged the federal government owed it more moneyas part of the settlement.
As part of the settlement, the company agreed to “release all pending and future claims against the U.S. for additional payments from the grant program”. The move ended a five-year investigation.
The Tesla Energy Batteries Announcement
Elon Musks May 2015 announcement was much anticipated. In May 2015, Musk announced Tesla Energy, expanding the companys capabilities into a new reporting segment, now called energy generation and storage. The two inaugural products were a home battery and a grid battery.
The new batteries build out the concept of electric storage. To support this segment the company has built an enormous battery factory in the Nevada desert. Its vision suggests as many as 10 Gigafactories around the world.
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Vermont Projects Without Approval
In June 2017 the Vermont Public Service Board found that SolarCity was implementing solar projects in Vermont without approval required by law. According to Vermont Public Radio, Public Service Board Chair Anthony Roisman sent a letter to SolarCity warning the company that it needed to get regulatory approval before installing solar generation equipment and attaching it to the state’s electrical grid. Roisman wrote, “Over the past few months, my office has observed a pattern of procedural issues with net-metering applications being pursued by your company.” Officials at the company worked quickly to respond to the issue.
Are Tesla Solar Panels Worth It
At first glance, a Tesla solar panel installation seems like a no-brainer. They have an easy ordering process and they offer good-quality solar panels at an insanely low price. All we can say is that if it seems too good to be true, it probably is.
When it comes to solar, the communication between you and your solar company is key. Youll be dealing with them for 25 years, at least! Teslas track record shows that they might not be the ones you want to rely on if something goes wrong. Cutting costs wont be worth the potential headache you could incur after the solar installation.
We recommend getting quotes from a few local solar installers before you decide to go solar with Tesla. A local installers prices will most definitely be higher than Teslas, but the cost includes the value of a long-term customer relationship, and to us, thats priceless.
Find out how much solar would cost for your home after the 26% income tax incentive
- Tesla solar panels cost $2.01 per watt before the federal solar tax credit is applied.
- Tesla installs their own 425-watt solar panels.
- Teslas performance warranty listed on their website is incredibly vague and below industry standards.
- While Tesla may offer a low price for solar, they dont offer great customer service, which is pertinent for a 25-year investment like solar panels.
The Checks And Balances Project
SolarCity indirectly funds a political advocacy group known as the Checks and Balances Project. The project has criticized the elected members of the Arizona Corporation Commission for being too well-connected to utility companies. The Checks and Balances Project has filed several requests for public records from the Arizona Corporation Commission. In July 2016, the Federal Bureau of Investigation interviewed the head of Checks and Balances as part of a larger criminal investigation into the financing of certain Arizona statewide races in 2014.
Solar By Degree Project
The company is involved in a case concerning Martin Shain, the lead energy consultant in a solar power project at two Oregon universities. Shain was indicted for forgery in Marion County in August 2016. He is a consultant for BacGen Technologies in Seattle, a key player in the controversial $24 million “Solar by Degree” project and is accused of “creating a phony invoice from a fictional subcontractor that was pivotal in getting nearly $12 million in tax credits from the Oregon Department of Energy”. The project began in 2013 and was sponsored by the Oregon University System thousands of solar panels, generating millions of kilowatt hours of energy per year, were constructed on 21 acres on the campuses of Oregon State University and the Oregon Institute of Technology in Klamath Falls.
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Elon Musk Is On The Hook For Billions If He Loses Lawsuit Over Teslas Solarcity Deal
Whathe worry? Tesla CEO Elon Musk is due in court in Delaware on July 12 to defend the companys 2016 acquisition of SolarCity.
Five years ago, Elon Musk gushed to investors about Teslas acquisition of SolarCity, then the top U.S. solar panel installer. Im pretty optimistic about how its going to turn out. Its pretty transformational, he said on a November 1, 2016, call with analysts. Its been extremely well received at the consumer level, said Musk of the estimated $2.2 billion deal. During the same call, he batted down concerns about SolarCitys faltering financial health. There are quite a few naysayers on the financial front, some of the big hedge funds, whatnot, said the billionaire, I see no chance of SolarCity going bankrupt. Zero.
A home outfitted with a Tesla Solar Roof
When Tesla bought them, supposedly they were going to recapitalize the business and revamp.
Joseph Osha, Guggenheim Securities senior research analyst
When Tesla bought them, supposedly they were going to recapitalize the business and revamp. Instead, it really declined significantly, I think because they weren’t paying that much attention to it and had other things going on, says Joseph Osha, senior research analyst for Guggenheim Securities who tracks the solar power industry, but doesnt cover Tesla.
Elon Musk debuting Tesla’s solar roof at Universal Studios in Hollywood in October 2016
Alan Ohnsman via ForbesDavid Paul Morris/BloombergAndrew Harrer/Bloomberg
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Even so, within Tesla, there were serious doubts about the merger. There was almost no understanding for what SolarCity was inside the broader company, and that includes Elon, says a knowledgeable source. They didnt understand the business. Yet Musk is famous for mastering information quickly, and again, whos going to bet against him? If hes wrong, SolarCity could prove to be a serious strain on Teslas resources. Solar power might be an undeniable part of our futurethe industry created double the amount of jobs as coal did last year and accounts for nearly 40% of new electric capacity added to the grid, more than wind or even natural gasbut SolarCity itself isnt. In its last reported earnings quarter before the merger, SolarCity saw a 26% year-over-year decrease in its megawatts installed, a key growth metric of solar power.
If hes right, however, hell move a big step closer to realizing his vision for a cleaner planet. With President Donald Trump announcing the U.S.s withdrawal from the Paris Climate Agreement last week, all eyes are now on the private sector for environmental leadership, with Musk leading the charge.
Not surprisingly, Musk says he isnt worried. Oh, it definitely will work, he says. Its just a question of when.
This is a company that I regard in a first-class crisis that acts as if everything is fine, TV anchor Jim Cramer said on CNBC afterward, calling it the worst conference call of 2016.
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