The logic of bringing Tesla and Solar City together

The logic of bringing Tesla and Solar City together

There’s a logic to Elon Musk bringing Tesla and Solar City together. It has to do with an energy policy called “net metering.”

If Tesla City can reduce the cost of making a house-powering battery to just $640—some analysts believe it’s possible—then every Solar City installation can be both a power plant and a storage system. And if the battery pack is key to the economics and not just a bonus, why not bring the companies together in more than a partnership?

The combined company will still be a gamble, but not on the economics of solar power or the availability of future subsidies. Now, both Tesla and Solar City depend on the company’s ability to stand up its battery gigafactory and meet its production goals.

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