The Duck Curve

Here in Massachusetts, solar energy is not yet a big deal. But it is a growing force, and in my recent explorations of how I might incorporate it into my own life, I ran into the Duck Curve. Why it’s named that is obvious, as you can see by glancing at the chart below.

duck-curveBut what does the chart mean?

Reading from left to right, it shows the net electric load on the electric grid throughout a typical March 31 in California, from midnight to midnight.

As the sun rises in the morning, and more and more solar panels begin to generate electricity and reduce the load on the grid, net demand drops, until at about 1 PM, net demand is lowest. Then as the sun sets and people arrive home and turn on their appliances, air conditioners, etc, net demand quickly rises.

Projecting current trends, the established utilities, who use the duck curve to spread their message, project that the spread of solar power installations will lead to a deeper belly for the duck (as more and more electric power is supplied by non-grid power) and thus an increased ramp up (the neck of the duck). And it’s the slope of that ramp up that utilities say could lead to big troubles, because the biggest, most efficient fossil fuel-burning plants can’t ramp up capacity that fast.

One of their suggestions (those bright guys at the utilities) is to constrain solar generating power at peak times. But that just doesn’t seem right. In fact, it seems plain wrong!

The answer, obviously (to me), is to find ways to store that energy generated during peak solar hours and then put it back into the grid a few hours later as demand grows.

And what’s the best way to do that?

Batteries!

Now, batteries are expensive today, but that doesn’t mean they’ll always be expensive.

In fact, there is one fast-growing supply of batteries right now, and as this supply grows, costs are guaranteed to come down. It’s electric cars, and the biggest concentration of them is in California. So, if all those electric cars had the ability (charging stations installed at workplaces would help), those cars could absorb some of that solar production during the day and thus make the ramp up the duck’s neck less steep in the evening.

Getting back to me, here in Massachusetts, I recently received a quote on installing solar panels on the roof of my house, and I’m going to go through with it, once I replace my asphalt shingles, which are nearing the end of their natural life. But as I was thinking through the possibilities, I realized that my Tesla Model S, which has a battery capable of storing 85 kWH of electricity could easily store all the power my rooftop array would generate during the day and then release it to my house at night—if my car were home during the day and if my car were engineered to put energy back into my house.

In other words, the parts to the solution to the (coming) problem are already on the way. And with the right incentives (rational pricing), I’m confident a solution will be found—provided that the utilities and their regulators allow such solutions.

So don’t let the duck curve scare you. Solutions will appear and in the long run, we’ll all benefit from the spread of cheaper, cleaner solar power.

Driving the Tesla Model S

by Timothy Lutts

Do you remember the first time you fell in love?

The first time you had sex?

The birth of your first child?

That’s the feeling I have right now, a week after taking delivery of my new red Tesla Model S.

my-tesla

Admittedly, some of the pleasures of driving the Tesla are slightly more intellectual than those earlier pleasures. But they’re no less enjoyable!

For example, one of the pleasures is showing people what’s under the hood. There’s nothing there, just a big empty carpeted space that could easily hold a ten-year old child. Then I show them the trunk in the back, which has even more space than the one in my last car, an Audi A6. That’s when they ask, “Where’s the engine? Where’s the battery?” Because none of that stuff is visible. The battery is entirely under the floor, between the four wheels, yet the car sits as low as a normal sedan. And the one big motor that drives the rear wheels sits right above the real axle. Somehow, it’s under that great carpeted trunk.

The best comment I’ve had yet after this show came from my nine-year-old nephew Peter, who commented, “This car should have wings.”

And it’s not just kids who are impressed.

A few days after I received the car, I took it to my local garage for the state-mandated inspection. You would think a guy working in a garage would know about Tesla. But this guy, who was perhaps 35 years old, had no clue! He asked if Tesla was a new company. He asked if the car was purely electric, like his computer said it was. And then he affixed the inspection sticker, without inspecting anything! Not even the brakes, horn or lights!

Tesla Mileage StickerHere’s the Federal-mandated sticker that came on the car.

It’s nice to think about saving $8,100 in fuel over five years—and the $7,500 Federal Tax Credit is nice, too. But the truth is, the car was expensive, and I know too much about investing to even pretend this car is a good investment. If I wanted fiscally sensible, I’d buy a three-year-old Toyota.

But here’s what I get with the Tesla.

The ability to never pump gas again, especially in inclement weather. All I do is plug it in every night (in my garage), just like I plug in my phone and my iPad.

Simplicity. I’ve been maintaining gasoline-fueled cars for nearly four decades, and it’s nice to have a car that’s so simple, the only fluid it will ever need is windshield washer fluid!

A 17-inch touch screen that controls all of the car’s functions except the windows the brake and the accelerator (I’ll get to that key item in a moment).

Those functions include:

Navigation by Google Maps, with live traffic updates showing where traffic is and isn’t.

An energy graph showing energy use over the past 5, 15 and 30 minutes.

A web browser, using the car’s 3G Internet connection.

Music, from either my phone—via Bluetooth connection or the built-in USB port—or old-fashioned AM/FM radio or my new favorite, Slacker Radio, which comes in over the Internet connection. I push a button on the steering wheel, say “Play The Rolling Stones” or “Play Beethoven” and that’s what I get. It’s almost magical.

Best of all, however, is the driving experience.

Like the Toyota Prius, the Tesla starts out quiet. (In fact, the Tesla’s coefficient of drag is even less than that of the Prius.) But unlike the Prius, which has its engine kick in eventually, the Tesla stays quiet, with only wind and tire noise growing as speed increases. I like quiet, because my music sounds better, and I really like to listen to music when I drive.

The Tesla feels really solid, in part because it’s heavy, 4700 lbs, and in part because it was designed to be stiff and strong. No doubt that helped it get the highest crash test rating in history from the National Highway Traffic Safety
Administration.

Because the heavy battery pack is under the floor, the car’s center of gravity is extremely low, which makes it feel extremely stable, with very little body roll, even in tight corners. The guys at National Highway Traffic Safety
Administration couldn’t flip it.

Yet because all that electricity is on tap to drive that motor as quickly as your foot can give it instructions, the car’s response to the accelerator pedal is almost instantaneous. Zero-to-60 is 4.2 seconds, and even at highway speeds, you can mash the pedal and the vehicle will leap ahead. And that’s really fun. It’s also really different from any gasoline-powered car, which is hampered by combustion cycles and gears and all that outdated internal combustion machinery. Furthermore, the car not only accelerates really quickly if you ask it too, it also decelerates fairly quickly when you ease up on the accelerator, taking the kinetic energy of the car and turning it back to electricity to put back into the battery! This regenerative braking takes a little time to get used to, but it’s a lot of fun when you master it, and it’s a key factor in the car’s rating of 89 miles per gallon equivalent.

Earlier this year, Motor Trend named the Tesla Model S the 2013 Car of the Year and Automobile Magazine named it the 2013 Automobile of the Year.

They did the right thing.

Related: Buying a Tesla

Buying a Tesla

by Timothy Lutts

Last night, my oldest child’s car wouldn’t start. She’d been visiting my wife and me with her husband, and when it came time to leave, instead of vroom, vroom, all she got from her old Volkswagen Passat was click, click.

Called to assist, I used my lifelong experience as an owner of cars and diagnosed the problem. The starter sounded like it was trying to work, so I figured the battery charge was low, which meant (since it’s summer) that the problem was probably the alternator and not an old weak battery. Solution, connect jumpers from my car, wait a while, and try again.  It worked! And she drove off to her friendly Volkswagen mechanic to get it fixed.

But very soon, I won’t be able to help her like that, because very soon, I’ll be driving a car that doesn’t have a 12-volt battery. Instead, it will have 6,831 lithium ion batteries made by Panasonic, and it won’t have an engine.

It also won’t have a starter, an alternator, a gas tank, an oil tank, a radiator, an exhaust system, belts, pulleys and myriad other parts that make today’s cars so complicated.

I’ll just plug it in every night in my garage, the same way I plug in my cell phone. I’ll never pump gas again (well, maybe for my wife’s car). And every day I’ll have nearly 300 miles of range on tap. I’ll be buying a Tesla.

Tesla Model S

It’s a Tesla Model S, the car that recently received a near-perfect score of 99 from Consumer Reports, a score that has only been given once before, to a Lexus. The Tesla Model S is not cheap. Prices start at $63,570.

But one reason I can afford it is that I first recommended Tesla stock (TSLA) to my Cabot Stock of the Month Report subscribers back in December of 2011, and since then the stock is up 424%.

And I think there’s far more upside ahead—in the long run—because company founder Elon Musk’s goal is not simply to sell lots of electric cars (though he’s doing it really well, and without advertising); his plan is to change the world, by supplanting the old gasoline-centric automotive world with a new electric-centric automotive world.

So after the Model S will come the Model X crossover SUV. And after that will come a small, mid-priced sedan that’s expected to directly challenge the BMW 3-Series on price and surpass it in performance. I think Tesla will sell a ton of them, because its cars are so much fun to drive.

Plus, over time, the cars save money, because they can be refueled using solar power and they require almost no maintenance!

Now, other car companies aren’t sitting still why Tesla forges ahead. But no one else makes a car that’s even close. The Chevy Volt and Nissan Leaf are OK, (I actually drove an early Leaf), but driving them is no fun at all. Plus, Chevy and Nissan are NOT trying to change the world; their bread-and-butter is still gasoline-powered cars. So they’re not really motivated the way folks at Tesla are.

Furthermore, Tesla is not just changing the driving experience, it’s also changing the refueling experience, by building a network of Superchargers where Tesla owners can recharge for free, for life. Plus, it’s changing the BUYING experience. You don’t buy a Tesla from a salesman, spend hours haggling about price and then leave fearing you’ve been cheated. Instead, you buy it the way you buy an iPhone. The car’s price is fixed, period. And currently, because there is no Model S inventory, you order a car with the exact color and options you want, and they build it for you, just the way you want it. Mine will be red, with a grey interior and the premium sound system. I can’t wait.

 

 

 

My Favorite Stock: TSLA

by Timothy Lutts

I originally wrote this on March 18, 2013, as the final installment of a series titled “Ten Stocks to Hold Forever.” You can see the background info on the concept here.

In the brief time since this was published, Tesla stock (TSLA) has performed superbly, gaining 48%, while ex-competitor Fisker is nearly bankrupt, and the subject of interest by no “distressed-company” buyers. (April 2013)

Though I work very hard to avoid falling in love with stocks, I will confess that TSLA is my favorite stock.

Tesla Motors was founded 10 years ago by Elon Musk, who made a small fortune selling PayPal to eBay, and it’s different from traditional automobile companies in five big ways.

First, its cars use no gasoline. They’re all-electric, recharged primarily by plugging in and secondarily by regenerative braking.

Second, its cars are made in California, guided by a business plan generally used for technology companies.

Third, its cars are not sold by dealers; they’re sold directly by the company, either in showrooms (like Apple) or remotely.

Fourth, Tesla carries no inventory. It has a backlog of orders, so each car is manufactured for a specific customer.

Fifth, Tesla offers no financing; it takes deposits when taking reservations, and is paid in full upon delivery.

In short, the Tesla buyer gets a much cleaner experience than what most of us are accustomed to when buying a car. And maintenance of the cars is simpler, too, with only tires, brake pads and windshield wipers needing regular attention.

Tesla Model S, tslaBut here’s the best part. In addition to all the above, the company’s first high-volume car, the Model S, is simply a joy to drive!

It can go from 0-60 MPH in 4.1 seconds (with the biggest battery pack); that’s quicker than a Porsche 911. Or it can go 300 miles on a single charge. Its center of gravity is so low (the battery is the floor) that it corners like a go-kart. And it seats five adults, with room for luggage in both the back and in the front (where the engine is in most cars).

(Note: I’m not buying one until I can get two features I’ve grow accustomed to in my Audi: all-wheel drive and a back-up camera.)

The Tesla Model S has won:

  • Motor Trend’s Car of the Year Award, with the first-ever unanimous vote.
  • Automobile Magazine’s Automobile of the Year Award.
  • Yahoo Autos’ Car of the Year Award.

In short, the car is wonderful. And the engineering has been nearly perfect.

Contrast that with competitor Fisker Automotive, born soon after Tesla and competing for the same market with a hybrid powertrain. Fiskers have had numerous technical troubles. Battery supplier A123 went bankrupt. 300 cars were ruined by Hurricane Sandy. And founder Henrik Fisker recently resigned, reportedly as the Chinese firm Geely (which now owns Volvo) discussed a takeover.

Tesla, meanwhile, is on target to turn a profit in the first quarter of this year, and to deliver 20,000 cars this year. And the Model S has been so well received that the company is delaying the production of its lower-priced SUV (Model X), so it can manufacture more Model S sedans.

Now, investing in automobile companies is always challenging, mainly because this is a mature industry. And investing in automobile startups has traditionally been an excellent way to lose money. But I think Tesla is going to succeed in a big way precisely because it is doing so much differently, because Elon Musk is an exceptionally capable leader, and because the world (this is a global story) is ready for a car that frees its users from the tyranny of the gas pump.