Climate

SolarCity CEO: Renewable Energy ‘Costs You Less Than Dirty Energy So Stop Using Dirty Energy’

CREDIT: Mark Von Holden/AP Images for SolarCity)

SolarCity CEO Lyndon Rive with chairman Elon Musk appear at the company's IPO in 2012.

PARIS, FRANCE — When Lyndon Rive co-founded SolarCity — now the largest rooftop solar company in the United States — he chose a particular start date: July 4, 2006, meant to represent the company’s stance for independence from fossil fuels. Two years ago, Rive, the company’s CEO, told the New York Times that his goal was to “change the way people get their electricity.” Since then, SolarCity has completed large-scale solar projects for companies like Walmart and eBay, broken into the business of providing rooftop solar to small and medium-sized businesses, and announced the creation of what the company calls the most efficient rooftop solar module in the world.

In the midst of the United Nations climate talks in Paris — largely expected to produce an international agreement on climate change — Rive sat down with ThinkProgress to discuss how solar power could fit into a climate deal, where the next hotspot for solar power might be, and how a price on carbon could be the best thing for solar — and the planet.

How do you see solar and renewable energy fitting into the Paris talks and an international agreement on climate change?

A think a real key thing would be to tax carbon.

What’s really important to understand is that [in taxing carbon] you don’t increase overall taxes, you’re just shifting tax dollars. If you’re in a country that has a value-added tax [sales tax], for example, you take your value-added tax from 14 percent down to 13 percent, and then that extra 1 percent savings on the value-added tax gets applied to a carbon tax. So as a consumer, or a business, your total tax is the same, you just shift the tax dollars and you’re pricing the externalities of pollution the energy that is polluting for free today.

Is that the next most important thing that could happen for solar industry?

In terms of climate change, that’s the most important thing to occur.

In terms of the solar industry itself, it varies by country. In the U.S., what’s really important is the continuation of the federal tax credit — it’s really, really important that that continues. Net metering, it’s also important that that continues. It’s a fair way to enable competition; it’s a fair way to enable consumer’s choice. All independent studies show that net metering is actually a net-benefit to the grid, not a cost shift. It’s revenue loss, I’m not debating that, but there is no cost shift — it doesn’t increase your costs.

In terms of the federal solar investment tax credit in the United States, it looks like there might be a compromise where those renewable tax credits are allowed to continue if the oil export ban is lifted. Do you think that’s a fair deal for climate?

I think so, yeah. The overall oil consumption in the world is not going to change. It’s the same number. The export is not necessarily going to increase the CO2, it’s going to make the U.S. more competitive with the rest of the world. But if that, in return, enabled us to have long-term visibility into continuing to incentivize and promote solar, then I think that’s a fair trade.

Where do you see the solar industry going in the next few years in the United States, both in terms of residential and commercial solar?

Rooftop solar, as an industry, I think will continue to grow at 40 to 50 percent: massive demand, very low penetration, it’s a product that consumers want.

In terms of commercial, there are certain segments that haven’t been addressed yet. Small and medium business is one of the segments. Ihe initial megawatts will not be that large, but if you start growing that at 40 to 50 percent every year, then the megawatts will start becoming large. I’m very optimistic at how big that market can become.

On a global scale, is there a country that you see being the next big place for solar?

Mexico. We just moved to Mexico, and we think it’s going to be a really big market. You’ve got high cost of energy, you’ve got lots of sun, and you’ve got a country that is needing energy. Lots of energy needs to be deployed. I see mexico as the next up and comer. Right now our focus is on buildings, but next year we are going to launch residential.

What’s the most important thing for developing countries like India, that have a huge need for electricity but so far haven’t fully embraced renewables?

You have to be pricing the externalities. This is the point that people don’t understand, [or] at least countries are struggling to accept. You’re already spending the money, whether you’re spending it on health issues, whether you’re spending it on environmental issues, whether you’re spending it in just pure subsidies towards the fossil fuel industry. The pure subsidies towards fossil fuels, that’s an easy one, because that’s just dollars going towards that energy. Capturing the health challenges and the environmental challenges, the money is being spent, it’s just coming out of a different pocket. The country needs to realize, money is being spent.

So globally, you think that putting a price on carbon is the most important step that could be taken to incentivize the transition to renewables?

Yeah. But whenever I say price on carbon, I want to make sure that it gets followed up with [the caveat that] total cost actually reduces. People freak out when you say that your cost is going to increase. They say, ‘We are developing countries, we can’t afford to pay this cost increase. The rich countries have to pay their fair share.’ A tax on carbon does not increase your cost, it just prices the externalities. You’re spending the money on all this other stuff, just move the dollars to the right places.

It’s not just increasing the cost of fossil fuel. It is pricing fossil fuels correctly, and reducing the cost other places. Then the adoption will occur, and will occur fast.

What would you say to people that say transitioning to renewable energy is complicated, or overwhelming?

If people want to take action, the single easiest thing for them to do is to use clean energy. Go do it. Go spend time looking at it, go look at the options for you, and actually take the action. A lot of people still think clean energy is expensive. It’s not. It costs you less than dirty energy. So stop using dirty energy.

This interview has been lightly edited for clarity and length.