In this interview, Lyndon Rive outlines a near‑term transformation of SolarCity from a pure residential solar installer into a dual‑customer business that also serves utilities. He explains that policy shifts will enable SolarCity to sell not only energy to homeowners but also grid‑related services to utilities, effectively turning distributed solar‑plus‑storage assets into an "infrastructure‑as‑a‑service" platform. Rive argues that utilities will manage millions of small power stations via software, using third‑party infrastructure rather than building their own, similar to the SaaS model pioneered by Salesforce. He highlights current regulatory barriers—specifically rules that prevent utilities from profiting on third‑party assets—and proposes an open‑platform approach where utilities can bid on solutions, fostering innovation, lowering costs for utilities and ratepayers, and spurring new technology development in the electric grid.
Chapters
In 15 years, what does SolarCity look like? And how are you going to make it even cooler than it already is?
So I think this may even happen sooner than 15 years. We're starting to see this curve. Right now, most of the markets we're in right now, we compete against the utility. That's our number one competitor. We're starting to see policy shift changes where we're going to have two customers. We're going to have the homeowner to which we sell energy to, and then we're going to have the utility as a customer as well to where we sell grid-related services to. So that, I think, is going to change. And so then what's going to happen is the utility— I don't think the utility's going to go away anytime soon. So the utility provides a good feature. The utility is now going to have access to millions of little power stations across their grid. With the solar generation and the storage device, they're going to have the software application, which they will then essentially manage millions of distributed systems the same way they'd normally manage their own power plant. And they will load balance the grid. They'll manage the grid. But instead of them building out the infrastructure themselves, they can use other people's infrastructure. Now we've seen this model happen. Salesforce.com is probably known for software as a service. And they kind of created a logo around that— no software. This is essentially infrastructure as a service. Somebody else is providing the infrastructure. And the utility then would use that infrastructure as a service. Now, why this policy has to change— today, the utility cannot use somebody else's infrastructure, because they don't make any money. Like, the rule is very clear. You only make money if you pay for the infrastructure. If you don't pay for the infrastructure, it's a pass-through cost. So if we sell it to the utility for $10, they can only rate-base $10, so they make no money. If you create an open field, it'll allow tremendous innovation into the electrical infrastructure. I don't know what technologies will get created, but create an open platform, say, "Here's the problem," bid out the solution, utility subscribes, takes the winning bid of that solution. If the utility would have done it themselves, let's just say that project would have cost $1 million, they bid it out, so they would make 10% of that $1 million. If they bid it out, new technology would come out, maybe only cost $500,000, they still make 10% of $500,000. But this way, the utility has a lower cost, the ratepayer has a lower cost, and it allows for innovation in a market that has seen almost no innovation.
