Tesla EVs and Solar Heading to 90% Lower Energy Costs

Marginal cost of energy by 2030 will approach ~$0.005/kWh. This is about ten times less than most of the energy today. It is essentially making power free and abundant.

The big issue will be the realized cost of this energy and will demonstrate, especially in the US, the decrepit and costly delivery infrastructure from the incumbent utilities. All of this translates into higher prices which makes no sense.

Billionaire Chamath is betting is that more and more of power will be generated by individuals using solar PV + battery packs in their home.

Ramez Naam Forecast on Solar and Energy

Ramez Naam: Back in 2011, he predicted a tenfold decrease in solar costs by 2050, which happened even faster than expected. Solar and battery technology has evolved from being policy-dependent and expensive to being competitive with and sometimes cheaper than gas and coal. Ramez, solar energy expert, thinks the cost of electricity will drop by another four times by the time solar accounts for about a third of all electricity generation globally. Could this happen twice as fast or half as quickly? Possibly. But the key takeaway is that clean electricity, particularly solar, is becoming increasingly cost-effective.

Chamath Forecast

The pull through from EVs will help accelerate this trend.

So whether you want a Tesla and end up with solar and battery or you simply want lower energy costs and break away from your utility, many Americans will end up in the same place: they will become a mini utility that makes power from the sun and uses it to power their lives.

Now, one thing we will save for later is the tipping point of insolvency for utilities as this trend really accelerates: how do they pay for their debt when enough people generate their own power and quit the utilities?

Household Solar Cost Breakdown

Solar panels are approximately 25% of your total cost
Inverters are approximately 10% of your total cost
Racking, mounting and BOS are approximately 10% of your total cost
Installation and soft costs are approximately 55% of your total cost.

If there was mass automation with say Teslabots then the installation and soft costs could be reduced by 90%. The average cost of a solar panel installation in 2023 ranges from $17,430 to $23,870 after taking into account the federal solar tax credit, with an average solar installation costing about $20,650. On a cost per watt ($/W) basis, solar panel prices in 2023 average $2.80/Watt (before incentives). This $19,600 cost would be for a 7 kilowatt system. Reducing this by four times would mean about $4900 for a 7 kilowatt system. Panels for the homeowner are about $0.70 per watt. A 7kW solar system can produce between 10,567 and 11,373 kWh per year.

Doubt Solar Power and Batteries All You Want But Utilities Cannot Be Trusted With the Current Methods

The Utility charges more for electricity for households even if the cost of the operations for the powerplants is flat or decreasing.

In 2022, congestion on the U.S. power grid cost consumers an estimated $20.8 billion, up 56% from $13.3 billion in 2021. Congestion costs occur when there isn’t enough transmission capacity to deliver the lowest-cost generation to consumers. In recent years, few large-scale, high-voltage transmission lines have been built in the United States. Grid enhancing technologies (GETs) such as dynamic line ratings, advanced power flow control or topology optimization that allow for more efficient use of existing grid infrastructure can relieve 40% of the problem. This will take a decade or more to deploy.

In the decades after that there would be replacing and adding power lines and high voltage main lines. In 2023, the cost to upgrade the grid was estimated at $21 trillion. The US electrical grid was built over the last 100 years and it has not been properly maintained. In Europe and North America, the amount of power and grid has been relatively static for a few decades. The supply chain to build and maintain has shrunk or disappeared. If you only change 1% of the grid each year for decades then you cannot ramp up to 5-10% grid change without rebuilding the supply chain. If you are really starting over, then maybe hanging power lines is not the right choice. If the companies are not going to keep trees and brush away from hundreds of thousands of miles of power lines, then we should do something else than just swap out copper wire for new material wire hung on the same wooden poles.

In 2020, major U.S. utilities spent 4.3 cents/kWh on electricity delivery.

The Department of Energy estimates that power outages cost the U.S. economy $150 billion annually.

In 2023, the average price of a utility-scale solar project was $1.06 per watt. A 5 MW project would cost $5.3 million, and a 100 MW project could cost over $100 million. The overall cost of a utility-scale project in the U.S. is around $1.10 per watt. However, recent deflation in costs has pushed panel prices below $0.40 per watt for utility scale projects. The scale of the projects allows the installation and soft costs to be more efficiently provided.

16 thoughts on “Tesla EVs and Solar Heading to 90% Lower Energy Costs”

  1. A natural gas 7.5kw generator costs $2000. If this is a dependability argument then a gas generator is a no brainer.

  2. Even without adding onsite power sources, having onsite storage would be a game changer on many levels.

    Off peak charging is cheaper, as has been said, and easier on fragile grid elements.

    Add as a back-up in event of power outages.

    Beyond that, a future path for power companies could be to install storage at customer locations, charging a set monthly price, including a generous base amount of power usage.

    Charge for power usage above the base.

    This would give them complete control of charging schedules, and a widely distributed storage network for large-scale solar panel farms.

    Most days would be topping off partially discharged units, the rest of the power covering higher usage customers, and keeping the power companies own back up power storage topped off.

  3. LPF are said to last 3000-5000 cycles, so about 10 years if cycled daily. At which point they might have 70% capacity.

  4. Article is propaganda decoupled from reality. Most homes are not particularly compatible with using solar energy due to physical location constraints and absence of times when solar energy can be harvested.
    The claims of essentially free energy are not matched by the cost of.energy, for instance California with some of the highest electric bills in the nation.
    Solar energy is really cheap, for the elite who get massive subsidies paid for by everybody else.

  5. “ Marginal cost of energy by 2030 will approach ~$0.005/kWh”

    At the utility level, you can only dream any cost savings from those low numbers will be passed on to consumers. No, in this case, if you want low energy costs, the consumer is going to have to go it alone. As much self generation and storage as possible and as much insulation from the local utility as possible.

    • It’s a rather cheap commodity delivered very reliably.

      Cheap compared to Apple phones for instance.

      Is your water bill too much? Should you start catching your own rain?


      • Your response is out in left field as they say. I don’t see the revelence. Higher and higher utility rates are the focus of the problem to be combated here. No savings are being passed on to consumers.

        • The price of electricity has not doubled as the cost of every other consumer good has since 2019.

          I’m not out in left field. I work for the utility. We’re not making a ‘killing’ and we’re not the bogey man. You wouldn’t believe the amount of unpaid bills we cover for societal benefit.

          Why don’t you turn your hate on one of the companies that’s actually abusing your privacy, selling your data, or otherwise ripping you off. The electric companies are not.

          • Name one other industry that coaches it’s customers on using less of its product…

            Electric companies are constantly coaching their customers to use and waste less power.

            The utilities are intertwined with the State(s).

    • Yes. Using a line from a movie, when the utilities pull a knife on you, you pull a gun. Wide spread adoption of solar-battery set ups by consumers will put a huge dent in their numbers.

      • This is like the smallest market you can imagine. The entire global uranium market is worth less than a billion dollars. Your spite would be better directed at industrial agriculture. A month’s groceries, processed foods, costs 8x more… Half of them (like PG&E) are basically quasi-state monopolies. Of all the burdens on our checkbooks (higher education, taxes, transportation), keeping the lights on is only a burden in the ghetto.

  6. The peak load on the transmission lines is the problem. If you use battery storage to shift some of the power just a few hours you can solve the peak load issue.

    • In Belgium we get electronic counter with a 1/4 hour tarification, you can get very cheap electricity off peak , this is solving the grid issues and avoid to build extra plant

      • Maybe consumer battery packs could be charged with off-peak electricity thus smoothing out the demand. Even better if they can be charged with solar and then off-peak if needed.

        • What if they’re cycled daily? Will they last ten years? The utilities would be the ones to install batteries, should they become cheap enough. All these off grid ‘survivalists’ coming out of the woodwork.

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