Investor's Corner

What You Need to Know about Tesla’s Battery Storage Solution

SolarCity-Tesla-energy-storage

A new tweet from Elon Musk this week promises a new product line debut on April 30 and most, including me, have our guesses that it will be Tesla’s battery storage solution as mentioned in the last quarterly earnings call.

This home battery storage solution has already been offered from Tesla Motors, via Solar City, for a couple of years now in the form of a pilot project with the California utilities—Pacific Gas & Edison, Southern California Edison and San Diego Gas & Electric.

This article will boil down what we know – where this may be offered and how much money Tesla drivers may need to dish out.

From Dana Hull’s article last June in the San Jose Mercury, the battery storage product offers:

  • A lithium-ion battery storage system, called the home energy Storage system, from Solar City
  • Contained in a 4-foot-tall metal box mounted on the wall of a  garage
  • Made by Tesla but offered by San Mateo-based SolarCity to its California solar customers as part of a small pilot project.
  • Goes for $1,500 down and $15 a month over a 10-year lease period.
SolarCity-Tesla-energy-storage

SolarCity + Tesla battery pack for storing solar energy. Source: Forum member myI55 via CleanTechnica

Hull received feedback from a battery storage user that’s undergoing the pilot program.  But more recently, Global Equities Research analyst Trip Chowdhry via Benzinga pulled in some real-world data from two additional people testing Tesla’s battery storage solution.

Here are some of the highlights from this article:

  • The Battery has to be installed 1.5 feet above the ground, and should have an open space of 1 ft on all sides
  • The battery does not make any noise, does not need any maintenance, has no drippings
  • The Battery also has an inverter
  • The installer offered a choice between 10KWH and 15KWH;

Chowdry’s article reported a similar price as to what was reported in the San Jose Mercury article and mentioned that a “10kWh battery could be priced at $13,000 with a 50 percent rebate from PG&E Corporation.” That’s a hefty rebate and a big incentive.

The Chowdry article also stated that there are battery storage owners in other states, about 100. So it’s not limited to California. However, the April 30 announcement could be limited to just current Solar City sales territories.

The Benzinga article mentioned that one owner “charges the battery at night at $0.11 and then sells it back to the grid at 3PM for $0.43, and makes $10 to 12 month doing this.”

This revenue opportunity may not exist in all states. In Illinois, solar customers receive a monthly credit based on the number of solar kWh it pushes back to the grid.

This sell-back opportunity for the resident is a point Jigar Shah, solar financier, has emphasized.  Shah argues that utilities need to have real-time analytics and a communication infrastructure to provide energy pricing signals quickly to customers. Shah feels the onus is on utilities to modernize and provide residents these tools or else residential battery solutions could be “dead assets.”

From the most recent earnings conference call in February, Musk says that Tesla could be producing these battery packs in six months. JB Straubel, Tesla’s point person for its energy storage strategy  (& gigafactory), reiterated this point last year at an energy industry conference.

Struaubel said, “We see the California mandate for stationary energy storage by 2020 and we’re (Tesla) quite a lot more bullish. We think that mandate will be met and far exceeded before the timeframe expires. We all should be thinking bigger.”

So are you considering a battery storage solution?

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