During an interview last Thursday with Fortune on the new video show The Chat, hosted at Facebook’s (FB) Silicon Valley headquarters, Immelt lamented that when GE originally entered the solar market, it focused too heavily on trying to be in the business of making solar panels, which he called “a horrible business” and a “money-loser.” In 2012, just a few years after announcing its intention to expand its solar factories, GE put much of that plan on hold as the market was flooded with ultra-cheap panels, many made in China.

But as GE moved away from solar manufacturing, startups like SolarCity were making money precisely because of that flood of low-cost panels. SolarCity has built a business off of buying solar panels and gear from other companies and providing customers “solar as a service,” including financing. Meanwhile, GE “got too fixated on the piece that we were the most familiar with, versus looking at the entire system,” Immelt said.

But Immelt also acknowledged that GE has learned from that mistake and will recover because the solar sector is still in its early phases. GE has “already started doing things to catch up,” he said; the company is a major financier and developer of solar projects. He added:

[T]he worst thing to be when you’re a company likes ours is the incumbent. It’s to allow people to feel like they have safety … versus being paranoid about what Elon’s working on….

But GE isn’t applying these lessons to the solar industry alone. The company also appears to be using these learnings for its grid battery business.

GE built out a factory to make sodium batteries in upstate New York two years ago and then, a few months ago, significantly scaled back that plant. “My hunch is that batteries are still going to be a bad business,” Immelt said on Fortune‘s The Chat. “Lots of competition from China, Korea, the rest of the world.”

And recently, GE has started selling grid battery projects to power companies using lithium ion batteries that it plans to buy from a third party. GE has scored deals for large grid battery projects with Con Edison and Ontario’s Independent Electricity System Operator. Immelt calls the emerging grid energy storage market “huge.”

Think of it this way: GE is basically trying out operating as the SolarCity of grid batteries. But, of course, so is SolarCity’s partner, Tesla. In April, Musk’s Tesla launched its own grid battery business, which currently uses lithium ion batteries from Panasonic. In Tesla’s latest earnings call, Musk said that Tesla’s new grid business had “gone viral” with a massive amount of demand.

In that way, GE and Tesla are now competing for utility grid storage customers. Then again, GE could someday buy batteries from Tesla’s Gigafactory, which is being built outside of Reno, Nevada. Immelt said this about Tesla’s grid battery plans: “What Elon announced is still not low enough cost,” but “if he can get it down the cost curve, it could be a great thing.”

Even though GE might have been slower to move in solar and storage services, Tesla and SolarCity now have the unenviable job of needing to act more like GE and get into large-scale manufacturing. SolarCity is building a solar panel factory in upstate New York, and Tesla is building its battery factory, which will be one of the largest in the world. GE’s transition from manufacturer to supplier could actually be a whole lot smoother than SolarCity’s and Tesla’s transitions from supplier to manufacturer.

Subscribe to Data Sheet, Fortune’s daily newsletter on the business of technology.