Lifestyle

A Tesla Powerwall-powered Home: Will it Pay Off?

SolarCity-Powerwall

We’ve all heard by now that the Tesla Powerwall home battery is designed to store electricity, generated from solar panels and electricity captured from utility companies during off-peak rates, and provide overall independence from the grid.

It sounds like an amazing product, and I’m sure it is, but will it pay off to own one?

Understanding the Powerwall

powerwall_front_angleThe Powerwall is an energy storage unit otherwise known as a battery. It comes in two sizes today (although they can be stacked/expanded), 7kWh and 10kWh (what’s a kWh?) and costs $3,000 and $3,500, respectively. Note that the cost excludes an inverter and installation, both of which can be quite expensive to the point it can double the total out-of-pocket cost. The specs for the Powerwall come in at a whopping 220 lbs / 100 kg (unclear as to which capacity this represents) and  52.1″ x 33.9″ x 7.1″ or roughly 3.5 x 3 feet in dimension.

The concept is simple, the Powerwall battery stores energy generated through your utility company when rates are the lowest (or through solar panels) and ready on tap when you need it.

Installation

Tesla notes that the cost of the Powerwall does not include the inverter or installation. An inverter alone such as the one SolarCity uses can cost around $2,000 which does not include a separate installation cost.

Installation will vary depending on the following:

  • Does your residence have an existing net metering?
  • Is it already wired for a generator?
  • What is the distance between the photovoltaic solar panel hardware and the location to where Tesla’s Powerwall would be mounted? The shorter the distance, the less cabling to run and thus a lower installation cost.

At 200+ pounds in weight, you’ll need to ensure that there’s ample space and structural support to where the Powerwall will be installed. There also needs to be sufficient cooling space and ventilation in the mounting location.

Primary Use Cases for the Tesla Powerwall

Tesla proposes two primary use cases for the Powerwall:

  • Time of Use (TOU) offset
  • Backup power

Let’s explore each of these options.

Powerwall provides a Time of Use offset

In many states and countries from around the world, a Time of Use (TOU) electricity rate is available through the local utility company. The concept is simple: you pay different rates at different times of the day. During peak hours the rates are higher than they are during off hours. Many Tesla owners that live in these areas that have TOU pricing will charge their cars during the evenings when rates are typically the lowest.TOU Pricing

Unfortunately TOU pricing is not widespread here in Massachusetts but if you’re able to take advantage of it in your area, then the Powerwall may bring some value although it would take quite awhile to recoup the initial investment.

Taking a look at TOU rates from Southern California Edison, we can see that their off-peak rate is $0.11 while peak rate comes in at $0.46 for a difference of $0.35 per kWh. The large Powerwall unit is capable of storing 10kWh. Assuming you are able to fully charge the battery during off-peak hours each and every  day, you would save approximately $3.50 per day.

Since the unit itself (without install) costs $3,500, it would take approximately 1000 days or just shy of 3 years before you “broke even”. This is assuming the utility company continues to offer off-peak rates throughout the year. Add in the installation costs and you’re looking at closer to 5 years before breaking even on the Tesla Powerwall investment

Solar Installed

Of course, there’s the argument that having a solar panel system would allow you to charge the Powerwall battery for free through sunlight, but only if you fully ignore the cost of the solar system itself.

RELATED >>> My journey to installing a SolarCity system

Owning or leasing a solar system comes with its own break-even calculations so you’ll have to factor that into the equation with the Powerwall.

Powerwall provides backup power

The other stated potential use case for the Powerwall is to use it for backup power in the event your home power is completely cut off from the grid.

SolarCity-Powerwall

Source: SolarCity

Don’t expect to power your entire house with just a single 10kWh Powerwall. Tesla’s site provides some good examples of how much power common home appliances draw. For instance the Powerwall would be able to power a typical refrigerator for 2 days. This time would of course be extended if you were able to replenish the battery through a solar system.

In the case of an extended power outage (think Zombie apocalypse), you may be able to power essential home services indefinitely with a properly sized battery and solar system.

The ability to re-fill from solar is a nice benefit, but the alternative would be a noisy gasoline powered generator.

GeneratorA 6.5kW generator can be had for for as little as $800. That generator can output 32,500kWh (50% load x 10 hours according that link). That’s 3x the power at less than 25% of the cost of Tesla’s offering. The cost for that power? About $15. The generator, unlike the Powerall, is mobile and can go anywhere you go. Generators typically have very low maintenance and can be re-filled quickly regardless of weather conditions (hurricanes, snow storms, etc – all likely conditions that will cause loss of power).

I have a Honda 6.5kW generator. My house has its own well, septic etc. When power goes out I fire up the generator and power the things I need. I have water, hot showers, heat (oil, fired by electric which is powered by the generator), lights etc. I have run for days off that generator in some of the worst weather conditions New England can throw at me. I’d argue if you’re serious about backup power, then a generator is still the best option.

Powerwall, as a backup power option and also from a pure cost-perspective, I feel is only a good fit for those who have a solar system installed and live in an area where the climate is more stable.

Comments
To Top