Tesla has finally taken the wraps off Tesla Energy, its ambitious battery system that can work for homes, businesses, and even utilities. The system breaks down into two separate products: the Powerwall is a home battery system, that comes in a 10 kWh version for $3,500, or a 7 kWh model for $3,000, excluding installation and the inverter. The unit is about three feet by four feet in size and six inches thick, and comes with integrated heat management and can fit either on the inside or outside of the wall of your home. The system is connected to the internet — Elon Musk said that the system can be used to create "smart microgrids" — and can be used as a redundancy system, or potentially allow a home to go off the power grid entirely. "The whole thing is a system that just works," Musk told reporters during a briefing this evening.
The big brother of the Powerwall is what Musk and his team are calling Powerpack — and it's where things get really interesting. They describe it as an "infinitely scalable system" that can work for businesses, in industrial applications, and even public utility companies, that comes in 100 kWh battery blocks that can scale from 500 kWH all the way up to 10 MWh and higher. "Our goal here is to change the way the world uses energy at an extreme scale."
Musk's ambitions with the battery are tremendous. He opened the press event by invoking climate change, and saying that it's "within the power of humanity" to change the way we produce and use power. He went on to say that he sees the Gigafactory under construction in Nevada as a product, the first of many. With 160 million Powerpacks, we could power the United States, he said, and with 2 billion, the world. The entire presentation and party, Musk said, was powered by stored solar energy.
While the system is being announced today, Powerwall has been testing for a year, and has already been on sale to select customers. For the Powerpack system, Tesla will start taking orders later this year and then really ramp up production as Tesla's battery-building Gigafactory comes online.
Tesla has been teasing the new system for months now, with Elon Musk casually referencing it on a call with investors last February and then hyping the new product line directly on Twitter last month. Tesla's invite for today's event was entitled "The Missing Piece," and in many ways that's what Tesla Energy is for the company's electric cars. Charging an electric vehicle at home can be expensive, and while solar power offers a way to reduce those costs when the sun goes down owners have had no choice to charge their vehicles with power from the grid. A robust home battery system like Powerwall could allow owners to store that solar-generated power during the day even if they're away, and then use it to charge their vehicle at night. Batteries can absorb surplus power and flow it back into the grid when needed, evening out supply and demand, something called load shifting. But the implications for Tesla's own cars is just the beginning.
The event was powered by stored solar energy
As more electricity is generated from renewable but intermittent sources like solar and wind, demand for storage is going to go up — batteries can absorb surplus power and flow it back into the grid when needed, evening out supply and demand. That's why states like California with aggressive renewable energy mandates are demanding utilities add storage capacity too.
Right now most storage is being added at the utility level or to businesses, which are subject to higher prices when demand is high. But energy analyst GTM believes residential storage is about to boom as well, representing almost half of the storage market by 2019, and driving the transition to a more decentralized grid. Tesla and SolarCity, run by Musk's cousin Lyndon Rive, have been positioning themselves to take advantage of this space. SolarCity has been running a pilot program that pairs its panels with Tesla batteries, and Musk, who sits on SolarCity's board, says that every SolarCity unit will come with a battery within five to ten years, and that the combined systems will drive the price of solar below that of natural gas.
While Musk has been known for pushing ideas that can seem very bleeding edge, in this case he underscored what a practical, immediate solution Tesla Energy can provide. "This is a feasible thing," he said. "It’s very important to appreciate that."
UPDATE: SolarCity tells Bloomberg that a nine-year-lease for the 10kWh Powerwall costs $5,000, including installation, maintenance, inverter, and control system. Buying the system upfront costs $7,140.