Why Tesla’s Financial Success Is Critical To The Future Of CleanTech — Part 1

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I write about Tesla a lot. Most of my pieces tend to fall either after major product announcements, or at the end of a quarter when I try to lend some insight into what Tesla has reported.

Sometimes I write articles after other companies make what they hope are major announcements, and I’ve been known to analyze what I think those products will do for those companies. I’ve also written an article about another renewable stock that I hold: Brookfield Renewable Partners (BEP).

Relatively often, in the comments, someone asks why CleanTechnica is bothering to publish financial insight. Why not just celebrate breakthroughs and announcements in clean technology?

The good news is we definitely do that, often, so bookmark our home page to find that stuff covered in great detail by many of our other writers.

But, while I love breakthroughs, I think that the financial success of these companies are just as important to cover, as I feel it’s a truly critical component to the future. If you’re a skeptic of my articles, no problem. My goal is to provide a reason to broaden your mind about why this stuff is important, not suddenly interest you in deep dives on whether Tesla’s Warranty Claims rate is appropriate or not if that wasn’t your thing to begin with.

I don’t know that I’m going to change your mind with this theory and suddenly interest you in reading my next finance-based article. However, I hope that at the least you can understand …

Why This Stuff Is Important

For as long as I can remember, the sustainable energy movement has had people pushing a transition to lower- or no-carbon technologies to avoid huge future problems due to climate change. And let’s be honest, if you’re reading this site, you probably agree with that. We should absolutely use technology that eliminates as much pollution — be it greenhouse gases or other pollution — as possible.

But the problem is more complex. There are reasons the transition hasn’t just happened immediately. To fully understand, we need to start by taking a ride back in history.

Frugal Moogal: Life Goals

Allow me to share something about myself: I absolutely hate paying for things I can’t directly influence, especially bills that occur regularly. I waited to drive until I was out of high school because I didn’t want to pay a car payment, nor insurance, nor for gas. When I finally started driving, I purchased a car without needing to make monthly payments.

Before I had even begun to drive, I had started investing in the stock market. My rule for stock purchases was I needed to find solid companies with high dividends, and then I would purchase enough to cover the brokerage fees in one quarter.

My goal was to combine making as few monthly payments as possible with enough dividends to cover whatever I had to pay. I was constantly looking to either reduce my payments further, or increase my investment in dividend-generating stocks.

I share this not because of any particular genius behind the plan, but because for whatever reason, my mind had this decided since I first started asking about things like stocks and dividends when I was quite young. Because of this, I would always become fascinated by things that could potentially save me money. One of those money savers that fascinated me was solar panels.

Energy (You Make the World Go Round)

I first learned about solar panels the same way many people probably did — at EPCOT Center. Disney (and Exxon) proudly proclaimed that solar panels on the Energy Pavilion powered the attraction.

The panels atop the Universe of Energy were one of the earliest solar array installations, and the attraction’s 2,156 panels array generated peak power of 77 kilowatts of energy. 15 homes!

Free energy from the sun to power houses?! Amazing! If you remember the song, sing it with me now!

Okay, you’re back? Sorry, but that’ll be stuck in your head for the rest of the day.

This was incredible, I immediately wanted my own for my future home, where dreams of eliminating my monthly energy bill thanks to the power of the sun now were firmly dancing in my head.

Unfortunately, there were some major problems. Disney and Exxon didn’t tell us in this early attempt at greenwashing the biggest thing: these panels were expensive. Early panels are often cited as costing $300 per watt, meaning those panels would have cost over $23 million.

The idea behind this technology was awesome, and I wished it would work, but if you have a wish and a sandwich, sometimes you end up with nothing — but at least you’ve eaten. At $1.5 million to power a house, this wasn’t a realistic technology. Not to mention you’d need 144 solar panels to do it.

How could anyone justify the cost for such little power? Where was there space? At 20 panels per house, we’d need 7 houses with those panels on them just to power one. When I dug in, solar power was a nice thought, but clearly they were closer to Fantasyland than the future these pavilions proclaimed would happen, right? (It is a much different story today, now that solar power has gotten dramatically cheaper.)

Electric Cars … HA!

I remember hearing in the mid-1990s that we’d run out of oil, and needed to switch to electric cars. While I didn’t see a cost-savings here, it interested me since technology fascinated me — a quality that I credit my grandfather with, since he was always on the bleeding edge of technology. My family’s first computers were literally hand-me-downs from him. Think of how weird this is — imagine your oldest family member being the first to get the fastest smartphones and teaching everyone else in the family to use them.

That was my reality.

Anyway, because of this, I was always fascinated by technology, and I remember my grandfather once telling me as we got gas for his giant LeBaron — a regular occurrence, as it got a whopping 7 miles per gallon — that he was excited that we’d probably transition to electric cars soon.

Both his technological curiosity and this statement stuck out to me, and when I saw the book The Car that Could: The Inside Story of GM’s Revolutionary Electric Vehicle, I actually purchased the book to read — and still have it — even though I had literally no interest in cars. The book convinced me that electric cars were a neat idea, but the Impact (better known as the EV1) didn’t have a great range and couldn’t go that far.

It was no surprise to me that GM took them all to the crusher. I became convinced that electric vehicles were another fantasy.

That’s where my mind remained almost 20 years later when, due to a series of strange circumstances, I ended up watching “National Geographic’s Mega Factories: Super Cars” documentary on Tesla more than a dozen times. (If you watch that link, there is an audio glitch from 40:30 or so to 43 … but it’s still worth it.) At the end, Franz von Holzhausen states, “we are really, day by day, and person by person, changing people’s thinking about what electric vehicles are versus what we’ve all grown up and taken for granted.”

At the time, I was done listening to promises like this. I was numb to “exciting new technology” since it seemed it would never be able to play a meaningful, affordable role in my life, and I figured the drawbacks like range, price, and charging time could never be overcome … right?

Until Next Time …

Okay, so, new technology is neat, but solar panels are an expensive boondoggle and electric cars are goofy short-range solutions for rich people who can afford a second car. That’s where I was once upon a time.

New technology is just one of three keys to unlocking a future of green energy. In the next installment, I’ll explore the second key, and how green technology invaded my life like a Trojan Horse.