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Will Tesla Deliver on its Commercial Battery Storage Solution?

Tesla Battery Swap

Musk and the Tesla PR juggernaut will officially release its home battery storage product this Thursday at the Hawthorne, Calif. design studio to much fanfare. The Tesla conference hype is in the air due to the residential home storage product, but the big enchilada could be commercial battery storage.

Tesla-Motors-April-30th-Home-Battery-Event

Tesla provides a sneak peek at its residential battery storage product.

The real buzz for many analysts and enthusiasts is utility scale battery storage pilot program and the announcement last week that eleven WalMart stores have this technology in place,according to Dana Hull at Bloomberg.

Tesla designed these battery systems for large commercial or even manufacturing operations, and began producing them last year.

This news of a potentially bigger national market for utility scale battery storage sent Tesla’s share prices soaring by 11% percent in less than a week. There’s a lot of potential without the need for huge state incentives that, for example, California is providing in the form of  Self-Generation Incentive Plan (SGIP). California’s Public Utility Commission (CPUC) provides SGIP incentives to support existing, new, and emerging distributed energy resources.

According to some discussion boards,  Tesla will have excellent margins on its residential battery solution but market potential in seems to side with the utility scale storage.

New York could be an interesting state for utility scale battery storage. The state scores high marks for being proactive in the solar industry and energy rules and then Jigar Shah tweeted this yesterday:

New York is moving toward private distributed generation, even though there are exemptions that allow utilities to get in the distributed energy game (ie. energy storage).

Solar City is also building a solar panel factory in Buffalo, NY, Tesla’s partner in helping push more adoption on the residential side. Thursday’s conference should have provide more details on this partnership.

Manufacturers will also keep an eye on the announcement,  as more companies look for better ways to implement energy demand programs–shedding energy loads during peak times and getting paid by the utility to do it.

Deutsche Bank analysts announced on Monday that Wall Street may be underestimating energy storage potential:

We have not factored any benefit from this market opportunity into our views on Tesla. Until now, the market has not been provided with sufficient information on the company’s planned product offerings or their growth expectations to make a judgment. Based on preliminary work on the economics of Stationary storage, we believe that this has potential to be more significant than the Street currently expects. Deutsche Bank concludes that it could add $100 to the stock’s price by 2020.

Of course, I hope we get other cryptic messages and clues about other Tesla possible moves, such as that “secret weapon against car dealers“.

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