As we reported yesterday, Elon Musk brought up the possibility for Tesla could rebuild Puerto Rico’s power grid with batteries and solar.

It has now led to the CEO securing a talk directly with the US territory’s Governor who seems more than enthusiastic about the prospect of Tesla having a role to play in the reconstruction of the island’s grid.

The CEO and high-level politician linked up on Twitter. Here’s the timeline:

Musk brought up the idea yesterday:

“The Tesla team has done this for many smaller islands around the world, but there is no scalability limit so it can be done for Puerto Rico too. Such a decision would be in the hands of the Puerto Rico government, PUC (Public Utilities Commission), any commercial stakeholders and, most importantly, the people of Puerto Rico.”

Ricardo Rossello, Governor of Puerto Rico, responded:

Then he added that he has “no doubt that Tesla Solar will work with Puerto Rico” and they apparently set up a discussion:

Basically, they initiated talks for a deal to rebuild the island’s electric grid via Twitter – weird times, but exciting times.

Of course, there are still some complicated issues to work through before a deal can be reached.

The biggest concern is cost. Puerto Rico was already in dire financial troubles before it was hit by two hurricanes last month. Now they have to rebuild their electric grid, along with many more damaged and destroyed buildings and infrastructure.

One thing to keep in mind is that the island already had an electric grid and market conditions primed to be updated with more solar power and batteries, which is what Tesla is suggesting to do here. Puerto Rico’s electricity rates were at an average of ~ $0.20 per kWh and reliant on fossil fuels.

In Kauai for example, Tesla built a 52 MWh Tesla Powerpack installation with an 18 MW solar farm.

Through the project, Tesla virtually became a power company selling energy to the grid. Tesla has a power purchase agreement with KIUC, the local electric utility which serves just over 30,000 customers on the remote island, to sell the energy generated and stored through the project for 11 cents per kWh or third of the cost of electricity generated through burning diesel on the Hawaiian island.

Obviously, this doesn’t account for the cost of the distribution through power lines, which were almost all destroyed in Puerto Rico. It will require a large initial investment, which will likely be the most difficult part of getting a deal together, since Puerto Rico has much more important energy needs.

Nonetheless, it’s the kind of project that Tesla is likely to show as an example when talking to Governor Rossello and Puerto Rico’s leadership today.

We will try to keep track of the progress around this project.

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