Tesla Powerwall home battery changes our vision of the way the world uses energy

Powerwall is the all-new home battery that charges using electricity generated from solar panels and powers your home or office when the sun goes down.

5/23/15 5:00 am chumakdenis 1

Recent announcement by Tesla’s CEO Elon Musk to launch a home battery that charges on solar power is in many ways a step that could result in a large scale uptake of a sustainable source of energy.

 Its latest project Powerwall --a home battery that charges on solar power—could be a real game changer.

Why? Well, let’s go into details and figure it out.

What is so special in Tesla’s Powerwall battery?

The Tesla Powerwall is the big home battery made of lithium-ion that charge on solar energy.

At first glance, there is nothing special in there.

The rooftop solar industry is already booming in California, with about 250,000 systems now online. The state's solar industry employed nearly 55,000 people  last year, according to the Solar Foundation, and 73 cities in Southern California alone installed at least one megawatt of rooftop solar capacity in 2014, per GTM Research.

But the industry's long-term growth is limited by a fundamental flaw: solar panels only generate electricity when the sun is shining. That's less of a problem in sunny California than it is elsewhere. But even in the desert, solar panels don't do much good in the evening, when people use the most electricity in their homes.

That's where the batteries being produced by Tesla and other companies come into play. If we could store the excess energy that solar panels generate during the middle of the day - and then use that energy to power our homes at night - that would be a big deal.

The batteries come in two variants, costing $3500 and $3,000 each, and are capable of storing 10 kwh and 7 kwh of energy respectively. To put this in perspective, a 1-kilowatt heater can run for ten hours with amazing10kWh of energy. These batteries are housed in a well-designed package and you can hang them on a wall. It's about 4 feet by 7 feet and has a width of about 7 inches.

"Solar right now is an open loop, where we use the grid for storage," said Vincent Battaglia, CEO of Renova Solar, a Palm Desert solar installer. "Batteries close the solar loop."

Some advocates believe that combined solar/battery systems (microgrids) are the key to protecting consumers from a utility industry that is increasingly threatened by solar technology.

In California, for instance, Southern California Edison and other utilities have been pushing new electricity rates that critics say would make it harder to save money through solar. And state officials will decide next year whether solar customers should be paid substantially less for the electricity they feed into the grid.

"All of those issues that they're trying to create that are impediments to the formation of a renewable energy economy, we are able to circumvent with storage," Battaglia said. "A microgrid solves the problem by allowing the customer complete control over their energy."

Competition

Tesla isn't the only company getting into the home battery game.

In the Coachella Valley, a region east of Los Angeles whose best-known city is Palm Springs, Calif., at least two solar companies (Renova and HelioPower) that are marketing their own storage systems. HelioPower complements its commercial solar systems with batteries produced by Sharp Electronics, and Renova will install its first two residential solar/storage systems later this month, using batteries produced by a German company, Sonnenbatterie.

That said, it will probably be a few years before homeowners start buying batteries en masse, because the technology is still so expensive.

Tesla, for instance, is charging $3,500 for a 10 kilowatt-hour battery, which could power the average California home for about half a day. That price doesn't include installation and some equipment.

SolarCity, the powerhouse solar installer chaired by Musk, has said it will sell Tesla's Powerwall home battery systems for $7,140, including installation and equipment. The company will also offer a nine-year prepaid lease for $5,000.

"For some commercial customers, it's an economically preferable move. That's generally not true for residential customers yet," Kann said.

Some solar companies, meanwhile, are skeptical of the battery prices Musk announced last week, pointing out that Tesla's systems won't be available for at least a few months.

Still, Tesla's battery prices are lower than what analysts expected, and lower than what other companies are offering. Renova will sell its 16 kilowatt-hour battery systems for about $20,000, before state incentives are applied.

Maybe that’s why demand for Tesla’s Powerwall is “crazy of the hook”?

Powerwall, a sleek suitcase-sized lithium-ion battery designed for homeowners to store energy, comes in 7 kilowatt-hour and 10 kWh sizes. Both units are meant to be combined with solar panels. The 10 kWh home unit is designed as a source of backup power, while 7 kWh-unit can be used daily to extend the environmental and cost benefits of solar after the sun has gone down.

The home energy battery, which comes with a 10-year warranty, is designed to be mounted on a wall. Tesla’s selling price to installers is $3,500 for 10 kWh and $3,000 for 7 kWh. The costs don’t include installation or the inverter that converts direct current power to alternating current for use in the home. Deliveries will begin this summer.

The Powerpack will be sold in 100 kWh units and can be scaled up into multi gigawatt-hour class. The Powerpacks are priced a $250 a kilowatt-hour.

Huge commercial success

Yeah, you’ve heard me correctly.

CEO Elon Musk claimed that demand for the newly announced Tesla Powerwall (and commercial Powerpack) has been “crazy off the hook.”

Musk notes that Tesla received 38,000 reservations for Powerwall Tesla won’t be able to fulfill all of those orders until sometime in mid-2106.  Musk adds that 2,500 companies have placed orders for Powerpacks (10 units combined), good for 25,000 more Powerpacks in total.

It’s the commercial side of this business that more likely will bring the highest level of benefit for Tesla and, of course, will make solar energy much more widely adopted.

Well, good luck with that one. It’s high time to stop using fossil fuels.