Tesla Home & Industrial Battery Packs

Tesla Motors Inc. Chief Executive Elon Musk has unveiled home and industrial battery packs–power wall” batteries–ranging from a $3,000 7 kilowatt-hour wall-mounted unit to a $3,500 10 kwh unit.
The batteries cost far less than the going rate for large-scale batteries and can be easier to install. Palo Alto, Calif.-based Tesla will begin delivering units by the summer from its California car factory, and later shift production to a $5 billion battery plant under construction near Reno, Nevada.
Tesla also will sell massive battery blocks for industrial users.

Tesla’s first battery customers include Green Mountain Power Corp., Vermont’s largest utility. It plans to buy Tesla packs and sell them to customers that already have solar power. Another customer is TreeHouse Inc., an Austin-based home improvement store concentrating on ecologically friendly goods. The store will sell the battery packs along with its own solar installation options.

Utilities such as Duke Energy Corp. and Edison International have installed large battery systems next to wind farms. The batteries store electricity that the wind turbines generate at night and release the power to the grid in the late afternoon and early evening when electricity demand spikes.

Other companies, such as Stem Inc. and Green Charge Networks are installing batteries for large retailers and hotels, to help the companies limit their power usage and cut their utility bills.

Government subsidies can reduce the cost of installing the batteries. In California, state rebates cover up to 60% of the price of the battery. Nationwide, batteries that are connected to solar panels are eligible for federal tax credits equal to 30% of the price of the battery. California’s subsidies and a mandate requiring utilities to use batteries or other devices to store power have put that state at the center of the stationary energy-storage market.

Hawaii, Texas and some eastern states also are using batteries to store electricity from solar panels and wind farms, and to keep the flow of electricity on transmission lines moving smoothly. Tesla batteries initially will use cells made by Panasonic Corp., the supplier of batteries in its Model S electric sedan. When production shifts to Reno, costs will drop by 30%, it estimates.

The new battery models include large, standing industrial-level batteries intended for use by utilities sold in units of 100 kilowatt-hours, which cost $250 per kilowatt-hour. The company already has a customer with plans to install 250 megawatt-hours-worth of such batteries.

Its home model, called “power wall,” comes in sleek black and white models and will be aimed at people who want to more efficiently use power from solar panels or go entirely off the electrical grid. The larger home model can store enough electricity to power a home for 10 hours. The Power Wall batteries will be installed through certified third parties, including SolarCity Corp., where Mr. Musk is chairman.

There are two key details here that are worth considering — the cost of the battery itself, and what it would actually mean to have 10 kilowatt-hours of backup power or power storage in your home. When it comes to price, these numbers are hardly cheap, but they’re also lower than some analysts were suggesting — figures like $13,000 were common in press coverage prior to Tesla’s announcement.

According to the U.S. Energy Information Administration, the average annual kilowatt-hour use for a U.S. utility customer (in the year 2013) is 10,908, or 909 kilowatt-hours per month. Divide that by 30 and per day, an average U.S. customer uses about 30 kilowatt-hours. So the battery could cover roughly a third of this. one idea behind pairing a home battery with solar panels is to store solar energy harnessed during the day and then deploy it in the evening, overnight, and the next morning. While the battery might not cover all energy uses during these times, it could reduce how much power needs to be purchased from a traditional utility and drawn from the grid.  (WSJ, 5/1/2015, Wash Post, 6/1/2015)