Elon Musk: Typical leases are 20 years, but the value proposition is, as you’re sort of alluding to, quite straightforward. It’s no money down, and your utility bill decreases. It’s a pretty good deal.
Chris Anderson: So that seems like a win for the consumer. No risk, you’ll pay less than you’re paying now. For you, the dream here then is that — I mean, who owns the electricity from those panels for the longer term? I mean, how do you, the company, benefit?
Elon Musk: Well, essentially SolarCity raises a chunk of capital from say, a company or a bank. Google is one of our big partners here. And they have an expected return on that capital. With that capital, SolarCity purchases and installs the panel on the roof and then charges the homeowner or business owner a monthly lease payment, which is less than the utility bill.
Chris Anderson: But you yourself get a long-term commercial benefit from that power. You’re kind of building a new type of distributed utility.
Elon Musk: Exactly. What it amounts to is a giant distributed utility. I think it’s a good thing, because utilities have been this monopoly, and people haven’t had any choice. So effectively it’s the first time there has been competition for this monopoly, because the utilities have been the only ones that owned those power distribution lines, but now it’s on your roof. So I think it’s actually very empowering for homeowners and businesses.
Chris Anderson: And you really picture a future where a majority of power in America, within a decade or two, or within your lifetime, it goes solar?
Elon Musk: I’m extremely confident that solar will be at least a plurality of power, and most likely a majority, and I predict it will be a plurality in less than 20 years. I made that bet with someone —
Chris Anderson: Definition of plurality is?
Elon Musk: More from solar than any other source.
Chris Anderson: Ah. Who did you make the bet with?
Elon Musk: With a friend who will remain nameless.
Chris Anderson: Just between us.
Elon Musk: I made that bet, I think, two or three years ago, so in roughly 18 years, I think we’ll see more power from solar than any other source.
Chris Anderson: All right, so let’s go back to another bet that you made with yourself, I guess, a kind of crazy bet. You’d made some money from the sale of PayPal. You decided to build a space company. Why on Earth would someone do that?
Elon Musk: I got that question a lot, that’s true. People would say, “Did you hear the joke about the guy who made a small fortune in the space industry?” Obviously, “He started with a large one,” is the punchline. And so I tell people, well, I was trying to figure out the fastest way to turn a large fortune into a small one. And they’d look at me, like, “Is he serious?”
Chris Anderson: And crazy you were. So what happened?
Elon Musk: It was a close call. Things almost didn’t work out. We came very close to failure, but we managed to get through that point in 2008. The goal of SpaceX is to try to advance rocket technology, and in particular to try to crack a problem that I think is vital for humanity to become a space-faring civilization, which is to have a rapidly and fully reusable rocket.
Chris Anderson: Would humanity become a space-faring civilization? So that was a dream of yours, in a way, from a young age? You’ve dreamed of Mars and beyond?
Elon Musk: I did build rockets when I was a kid, but I didn’t think I’d be involved in this. It was really more from the standpoint of what are the things that need to happen in order for the future to be an exciting and inspiring one? And I really think there’s a fundamental difference, if you sort of look into the future, between a humanity that is a space-faring civilization, that’s out there exploring the stars, on multiple planets, and I think that’s really exciting, compared with one where we are forever confined to Earth until some eventual extinction event.
Chris Anderson: So you’ve somehow slashed the cost of building a rocket by 75%, depending on how you calculate it. How on Earth have you done that? NASA has been doing this for years. How have you done this?
Elon Musk: Well, we’ve made significant advances in the technology of the airframe, the engines, the electronics and the launch operation. There’s a long list of innovations that we’ve come up with there that are a little difficult to communicate in this talk, but —
Chris Anderson: Not least because you could still get copied, right? You haven’t patented this stuff. It’s really interesting to me.
Elon Musk: No, we don’t patent.
Chris Anderson: You didn’t patent because you think it’s more dangerous to patent than not to patent.
Elon Musk: Since our primary competitors are national governments, the enforceability of patents is questionable.
Chris Anderson: That’s really, really interesting. But the big innovation is still ahead, and you’re working on it now. Tell us about this.