Even though investors aren’t entirely sold on Tesla’s new switch from an electric car company to a sustainable energy producer, that hasn’t stop Tesla from pursuing its new project. One state, in particular, seems to be reaping a positive benefit from Tesla’s new sustainable energy venture.
Hawaii’s Kauai Island Utility Cooperative (KIUC) is using over 272 of Tesla’s power packs as an alternative electricity source for the island at night. The island is no stranger to solar energy. In fact, Kauai used to use solar energy as a power source on the island at night. Although this was a daytime option, there was no way for the island to use solar energy at night.
Hawaii’s governor David Ige said in an interview that “As a state, we know how to generate power. For us the challenge has been storing that power to use at night. Now we can do that.”
The Tesla energy packs have the ability to store the sun’s energy and use that to power the island at night. That saves an estimated 1.6 million gallons of diesel fuel that have been used in the past as a power source for the island during the night time hours.
Tesla has enough faith in its power packs to ensure that they will cut KIUC’s costs from 15.5 cents per kilowatt hour to a low 13.9 cents which is a set price for the next 20 years.
Although Tesla’s new power packs are a hot commodity for KIUC due to their ability to cut diesel fuel costs, investors don’t seem to be too convinced that Tesla’s new energy move will be enough.
Chief Technical Officer of Tesla, JB Straubel, had an interview with CNBC Wednesday in what seemed to be an attempt to quell any skepticism from market investors. Straubel said he believes it can be “difficult to see into the future sometimes and see how it is going to go.” He also expressed his faith in the renewable energy becoming far bigger than fossil fuels in the upcoming future.
Tesla already took a step into the future back in November when the company joined with SolarCity. Around the same time, Tesla also acquired Elon Musk, a solar energy firm, for around $2.6 billion. These investments have proved beneficial in the fact that they have continued to grow Tesla’s revenue, but the company hasn’t seen a profit in the last two-quarters.
SolarCity has proved to be a good investment for Tesla. SolarCity has nearly 55,000 solar panels across over 50 acres of Kauai. Those panels pull in the solar energy that is being stored in the packs that provide light for the island at night.
In his interview, Straubel told CNBC, “The energy markets are obviously volatile. They will continue to be volatile, and these technologies are coming down in price every single year. So we don’t see this changing and the long-term trend is going to be the same.”