back to article Musk's Tesla to buy Musk's SolarCity for US$2.8 billion

Tesla has made a US$2.8 billion offer for another Elon Musk-founded company, home photovoltaic specialist SolarCity. If the share-swap transaction goes ahead, it would (in Tesla's words) create “the world's only vertically integrated energy company offering end-to-end energy products to our customers”. That, the company says …

  1. Captain DaFt

    Translation

    "The deal's attracted criticism already. The Wall Street Journal reckons it “defies common sense”, while Barron's complains about the share dilution involved."

    Yields;

    "Now we will be unable to siphon off all the cash from this value asset that we feel entitled to!"

    1. Mark 85 Silver badge

      Re: Translation

      There ya' go.... When Wall St. complains, it usually is about the cash not landing in their pockets.

      1. Yet Another Anonymous coward Silver badge

        Re: Translation

        Or more accurately the pockets of their customers. All the little old ladies pension funds,your life insurance, etc. Remember bankers don't own companies, people with savings own companies.

        If the bank feels that el'reg's favourite Bond villain is wasting shareholders money on a vanity project to buy back a company he founded - they have a duty to say so.

    2. Mikel

      Synergy. We has it.

      In an IT merger there is always talk of synergy. Here we have it. Solar homes with solar powered batteries that power your life, and your car. Everything in your personal life powered by fusion. Guilt free, CO2 free, even the factory that makes your stuff powered by solar energy. But not the "living in a yurt" "Mother Earth News" self-deprivation kind of life - the rip your face off four wheel traction limited acceleration kind of life. The kind of life that's worth earning a boatload of money to pay for.

  2. Mikel

    The deal will close

    And the next day Musk will ask the Street for more money. And they will give it. At the last possible second.

    Man this kid has got a brass pair. He's not happy unless he's dancing on the razor's edge of failure. I can't wait to see what he can do with my little bit of spare money.

  3. ratfox Silver badge

    Duchessing

    Thanks for this addition to my vocabulary.

    1. Francis Boyle Silver badge

      Re: Duchessing

      Are you sure that it not in fact a ridiculous term for an even more ridiculous sex act? Because I'm not.

  4. DougS Silver badge

    They could make the panels structural

    If instead of having a roof deck with underlayment on top of it, shingles/tiles on top of the underlayment and solar panels top of the shingles, we had a roof deck with solar panels top of it, skipping the underlayment and shingles by filling their role of keeping water off the roof deck, overall installation cost would be significantly reduced, especially in new construction.

    Not sure that really helps all that much with the aesthetics, you either think tinted glass looks good on a roof or you don't, but it solves a more important problem since installation cost is a bigger and bigger factor as solar panels get less and less expensive. And hey, maybe solar panels look better if they are lapped like shingles - you could even have the option of using ones of different tint to get that mixed shading popular in shingles.

    You already have to replace shingles every 20-30 years, which by a nice coincidence is about the life expectancy for solar panels (barring hail, which would trigger the replacement of either shingles or solar panels) Sure, tiles and slate last far longer, but they are also more expensive and there's little point to having a more expensive roof if you are going to cover it up with solar panels anyway.

    1. ARGO

      Re: They could make the panels structural

      These have been available for ~ 5 years. Not sure if they look better, but they're certainly lower profile: http://www.solarcentury.com/uk/c21e-tiles-and-slates/

    2. Nigel 11

      Re: They could make the panels structural

      You can already buy solar shingles. Some are flat and shiny and look like panels, except that they cover the complete roof in a slate-like pattern rather than being bolted onto it. Others are textured to look a lot more like natural blue slate. There's an efficiency penalty for the improved aesthetics. Both sorts cost quite a lot more than the bog-standard panels. I'm hoping the price comes down before I decide to replace my conservatory with something with better thermal regulation.

      Coming soon, barring unforseen R&D snags: perovskite solar panels. These will naturally look less blue, more like slate. Also the manufacturing process will be spray-on, which ought to mean that solar panels can be roof-textured without a serious efficiency penalty. Also, that solar material might be spray-painted onto the roof of electric cars (every little helps, and the weight penalty more or less disappears).

      BTW I don't think Elon is primarily motivated by making money. He actually wants to save the planet, and is going at the job like an engineer and entrepreneur rather than a green politician!

      1. Anonymous Coward
        Anonymous Coward

        Re: They could make the panels structural

        BTW I don't think Elon is primarily motivated by making money.

        I do. I think he's consistently milked the US taxpayer for vast amounts of money. Grants to build his factories, subsidies for R&D, subsidies for PV, subsidies for EVs. WIthout the bottomless pocket of the taxpayer, he wouldn't have a business at all.

        1. MonkeyCee Silver badge

          Re: They could make the panels structural

          So he's a market capitalist, just actually good at delivering product? :)

          Most, if not all, industry is dependent upon the taxpayer subsidising some parts of the process. Education usually, but pretty much anything that changes the status quo is antithetical to the vested interests.

          The funding for Musk is a drop in the bucket compared to the sort of monies thrown at the big defence contractors, for goods and assets that are working within years rather than failing after decades.

          Since the US is *already* subsidising various inefficient players in the market, being unwilling to let the market set a price, or to allow companies to fail, then you have to throw some sort of a bone to new players.

          1. Anonymous Coward
            Anonymous Coward

            Re: They could make the panels structural

            The funding for Musk is a drop in the bucket compared to the sort of monies thrown at the big defence contractors

            Not unlike the billions the US government has also thrown at a company called SpaceX? Hold on....isn't that owned by the rich guy with the rubber face too?

            And to all the mugs who think that Elon is saving the planet, how many polar bear cubs have drowned for this vanity space programme? All very well saying "ooh look, recycled boosters!", but the actual benefits are modest. And the argument "somebody else would have done it anyway" is likely to come up, but would that work as an excuse for a torturer, drug dealer, or prison camp guard? I just wonder if anybody is stupid enough to argue that the use of hydrogen and oxygen is a somehow a clean fuel....

            I rather like Musk. He's rich enough and tech focused enough to achieve all manner of clever things, and he's largely unconstrained by investors or other people's opinions. But that doesn't alter the fact that his empire is funded not by the market, but by the government, and that even the environmental impact of a Tesla has a big fat carbon footprint.

            1. Dan Wilkie

              Re: They could make the panels structural

              Only a fairly small quantity of biillions though in the scheme of things... ULA get subsidized nearly a billion dollars just in case they get asked to launch a rocket, then get paid again if they actually launch anything...

              What I'm saying is every player in this industry is subsidized, but SpaceX's subsidy is quite small in comparision.

              And I'm British, so I'm on the verge of being triggered by the fact Chrome keeps correcting it to subsidized. :\

        2. Anonymous Coward
          Anonymous Coward

          Re: They could make the panels structural

          Kudo's!! A person that actually gets it! Oddly enough I made the same comment on the latest Space X disaster and was given VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV down-votes. Not that I GAF! It is obvious those that did it are clueless to Musk.

          I can speak from experience, Tesla, was based in OC where I live. Fucked California taxpayers and now Nevada. Space X in Torrance, still fucking California and Solar City, the WORST PE company in the past 25 years, getting yet another tax break pass.

          So while those VVVVVVVVVVVVV votes think they are being cool, they are financial FLEEBS! #3

          1. James Hughes 1

            Re: They could make the panels structural @sux2bu

            Which SpaceX disaster?

            They have had one real problem AFAIK - last years F9 explosion. Nothing since. Seems to me they are doing pretty well.

    3. Anonymous Coward
      Anonymous Coward

      Re: They could make the panels structural

      overall installation cost would be significantly reduced, especially in new construction

      The material savings are very, very small. Shingles (and in Europe cement or clay tiles) are cheap as chips, as is the material underneath, and they're fitted by low skill labourers. Integrated PV certainly looks better, but the savings in unrequired materials are negligible, and probably offset by incremental costs of finishing and weatherproofing an integrated array.

      For a new build there are worthwhile savings in cost, but that's simply because you're on site already, and you don't have the survey, mobilisation and access costs that apply to retrofit.

      1. DougS Silver badge

        @Ledswinger - cost savings

        Yes, the material savings by dumping shingles and underlayment are small, but installing those and installing solar panels on top of them is wasteful in terms of both materials AND labor. If you can trim a dollar or two per watt from the total cost of buying/installing solar panels by eliminating unnecessary materials/labor that makes them workable in more areas than they are today, and more attractive in the areas where they already make financial sense.

        And yes, I know there are "solar shingles" now, but those things are a joke. Hopefully Musk and his team of PhDs could figure out a more workable solution that maintains the same efficiency and installation cost of traditional panels, so the savings in not having the roofing underneath can be fully realized. The current solar shingles are WORSE than putting standard panels on a standard roof, making them nothing more than a gimmick that has no place in the market.

    4. allthecoolshortnamesweretaken Silver badge

      Re: They could make the panels structural

      Shingles, tiles etc. are not 'structural'. Yes, it's not a bad idea to combine two functions, in this case protection against the elements and power generation, into one component. But trust me, you don't want those compnents to be part of the structural design, aka load bearing elements.

      1. James Hughes 1

        Re: They could make the panels structural

        The same old same old SpaceX is funded by the taxpayer argument.

        Of course, tax money goes to SpaceX. And for that tax money, they launch stuff to the ISS for the government.

        Just like tax money goes to road builders to build and repair roads for the government. Just like tax money goes to military equipment manufactures to make military equipment for the government.

        It's not a donation for which the tax payer gets nothing back. The money PAYS for a service. And they do it cheaper than ULA, so the government actually spend LESS money!

        Of course, SpaceX also take advantage of tax breaks, just like loads of other companies do. But that is not funding them. Tax breaks are a common way of encouraging business.

  5. jake Silver badge

    Now hang on a second ...

    TESLA (a public corporation) is purchasing a MUSK funded company. What percentage of SolarCity's shares does Musk own? How much of the 2.8Billion of TESLA shareholder money is going directly into Musk's pocket? Isn't there a word for that?

    1. Def Silver badge

      Re: Now hang on a second ...

      If you'd actually read the article, you'd know it's a share based deal. I.e., all Musk's current Solar City shares are exchanged for Tesla shares. He won't make anything on it until he sells those shares.

      And no, there's no word for that - at least the word you're thinking of doesn't apply here (all of SolarCity's shareholders receive the same deal) - it happens all the time.

  6. allthecoolshortnamesweretaken Silver badge

    As to subsidies finding their way to Musk-founded companies - I like to think of it as crowdfunding.

  7. Trigonoceps occipitalis

    Power Wall

    When I first heard about the domestic battery storage system I assumed that it was part of the Tesla car system. Charge the Power Wall up slowly from a normal domestic supply, have the big boy connection from the Power Wall to the car for a fast charge at home.

    Remember you heard it here first - prior art and all that.

    1. Ammaross Danan

      Re: Power Wall

      They already make fast-charging ports for home installation. The PowerWall is basically a whole-home UPS, so the car would indeed charge from it anyway. The advantage is you can have the PowerWall charge during low-cost/kW time periods, so even if you're charging your car during peak-cost times, you're only paying the low-cost kWs.

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