Green is now front and center
I have to admit that I arrived a little late for the Tesla-Solarcity event at Universal Studios back lot. But what I found was definitely worth the wait. Elon Musk announced he is single- handedly going to revive the home solar market. He announced that building a roof with solar tiles will cost less than building a roof the old-fashioned way. This makes sense if you count the electric bill savings. How is this one person able to continually move our country forward? This reminds me of other greats: Thomas Edison, Nicolas Tesla and Steve Jobs. Our country and its dominant economy in a worldwide market has been in part built on the shoulders of these geniuses.
Most people may not remember the billions of dollars of venture capital and government funds lost in bad new energy investments. However, the irony is that from these losses comes the success of Tesla. This is because Tesla only exists today because of the 2007 financial crisis. At that time, General Motor’s CEO famously flew his jet to Washington DC to meet with lawmakers and beg for mercy and a large bailout- cash GM desperately needed. Well, I am sure that without this event Tesla would have not received their own lifeline to keep the doors open. Tesla received $465 million in financing allowing Elon Musk to stand up today and announce how he is now going to focus on the home solar market.
In reality, I wonder if this publicity stunt was all about convincing the Tesla shareholders to vote for the Solarcity merger. The press has been mostly negative about this combination for many reasons. One of them being Elon Musk’s shareholdings in both companies cries conflict of interest. Is he bailing out Solarcity on the backs of the Tesla shareholders ? Also interesting is the notion these two companies do not belong together. One is a car company which recently announced an Uber-competing service allowing Tesla owners to rent out their cars when not in use. Tesla is on its way to becoming the largest electric car company in the world with a huge backlog of orders for the Model 3. So why combine with Solarcity ? Well, it all now makes sense. Elon Musk is the world’s greatest product designer and he sees a world integrated around electric innovations. His solution to fight global warming is to produce electricity at home, store it at home and then drive off from home without ever using any fossil energy. The merger is really about integrating these innovations and allowing consumers to feel confident enough to purchase it. I own two Tesla cars and frankly I tried to install solar on my house roof but because of the fire codes requiring 2 feet of space between panels, I was not able to justify the installation with so few panels. Now with the solar tiles, this problem goes away and I effectively doubled the electricity production making the installation viable. Add to this the new Tesla wall mounted battery and I now can power my house and charge my car without using the grid. I probably could spill off some of the over production of electricity to the grid and earn a few extra dollars.
The picture Elon Musk is painting for us is an exciting one. We are going to fight climate change, gain energy independence and save money with lower energy costs. We need more Elons and we need to support these visionaries with working capital. The Great Recession bailouts are just one event in our history. Imagine if Tesla and Solarcity did not exist. Our world would be just a little less exciting. The solution to funding these visionaries across our country is simple: Raise capital from the fans, the customers and the general public. Allow the ordinary investor to participate and sometimes gain a great return on their investment. The JOBS ACT, which was voted into law April 2012, is a great step towards the democratization of capital. Companies such as WeFunder, SeedInvest and my own StartEngine are working hard to bring to investors companies who need capital to help build our economy, create high paying jobs and make a more prosperous economy. I envy our new dreamers, visionaries and entrepreneurs because today, for the first time in 80 years, anyone who can build a strong base of fans can now realize their dreams. This is why our country is the greatest country in the world.
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The views and opinions expressed in this article are those of author Howard Marks. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:http://startenginebetadev.s3.amazonaws.com/production/pdfs/Disclaimer.pdf