Energy
Tesla Energy is quietly setting its sights on peaker plants
Behind the spotlights trained on the Model 3 production ramp and Elon Musk’s online behavior, Tesla’s Energy business is quietly growing and spreading its reach. Tesla notes that its deployment of stationary batteries, which are designed to supply electricity to residential homes, businesses, and even the power grid, surged 450% in the first six months of 2018 alone. These figures are well in line with Elon Musk’s statement during the Q2 2018 earnings call, when he noted that Tesla Energy is growing at such a pace that it would likely catch up and exceed the company’s electric car business in the future.
During the 2018 Annual Shareholder Meeting, Elon Musk announced that Tesla managed to hit a milestone of installing 1 GWh of energy storage to projects worldwide. This is only the beginning, though, as the company is aiming to double its battery storage installations within the next 12 months. Just like its electric cars like the Model 3, Tesla’s energy products like the Powerwall 2 home battery system are seeing overwhelming demand from customers — so much so that installations for the products are quite delayed. In Tesla’s website alone, the company notes that new Powerwall 2 orders would likely not be filled until “late 2018” at the earliest.
Despite the company currently being unable to meet production, Tesla CTO JB Straubel noted in a recent statement to the San Francisco Chronicle that Tesla’s battery production would likely catch up early next year. Straubel stated that while Tesla is scaling production as fast as it could, there are still delays as the demand for the residential market continues to be larger than expected. Demand from utility providers has remained strong as well. Back in June, for example, the company landed a contract with Pacific Gas and Electric Co. to install its industrial-grade Powerpack batteries to store 730 MWh of electricity in Moss Landing; and that’s just one of several high-profile projects that the company is engaged in.
Tesla’s Powerpack farm in South Australia. 
Tesla’s energy storage solutions are starting become more and more accepted by utility companies, particularly since battery technology has reached a point where it now has the potential to replace inefficient and dirty “Peaker” power plants, which are powered on when the demand for electricity is at its highest. Straubel believes that battery solutions such as those offered by Tesla Energy are poised to outcompete conventional peaker plants.
“I think what we’ll see is we won’t build many new peaker plants, if any. Already what we’re seeing happening is the number of new ones being commissioned is drastically lower, and batteries are already outcompeting natural gas peaker plants,” Straubel said.
Tesla Energy’s initiative to eventually replace peaker power plants is very similar to the company’s efforts to render fossil fuel-powered automobiles obsolete. Elon Musk is known to have said that Tesla will not stop “until every car on the road is electric.” Considering the CTO’s recent statements, it appears that Tesla Energy would likely not stop until all backup power plants are powered by renewable energy as well.
Tesla will actually be doing the world a favor if its Energy business ends up helping in the transition of the power industry away from peaker plants. Peaker plants, after all, are responsible for a lot of pollution. A case study of the facilities in CA cited by the Clean Energy Group noted that peaker plants emit roughly 30% more carbon dioxide per megawatt-hour than natural gas combined-cycle plants, which are increasingly being used as base load plants. The case study also noted that 84% of peaker plants are located in areas that are vulnerable to environmental damage. On top of this, peaker plants are actually quite costly for consumers, considering that they are utilized when demand for electricity is at its highest.
Tesla Energy’s goal of eventually replacing peaker plants might be ambitious, but it is not impossible, especially since the United States’ energy storage business has been seeing growth over the past years. A study from GTM Research, for one, estimates that the sales of energy storage for both residential and utility markets in the US would likely hit $541 million this year, before passing $1 billion in 2019, and hitting $4.6 billion in 2023. If Tesla can ramp its energy business within the coming years, the company could position itself strategically in what could very well be an upcoming energy gold rush.
Tesla’s energy business usually takes a back seat to the company’s electric car division, but the updates that the company has teased regarding its battery technology are very encouraging. During the 2018 Annual Shareholder Meeting, for one, Elon Musk mentioned that Tesla is now aiming to hit a cost of $100 per kWh at the pack level.
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“We think at the cell level probably we can do better than $100/kWh maybe later this year depending upon stable commodity prices. With further improvements to the cell chemistry, the production process, and more vertical integration on the cell side, for example, integrating the production of cathode and anode materials at the Gigafactory, and improved design of the module and pack, we think long-term we can get below $100/kWh at the pack level,” he said.
Tesla Energy has introduced the Powerwall Lease in conjunction with Tesla Electric, making the service available in Texas. This new option delivers whole-home backup power using two Powerwall units for a net monthly cost of $35 after credits, accompanied by a low fixed electricity rate.
Under the lease terms, customers pay a one-time order fee of $100. The base lease payment for the two Powerwalls is approximately $122 per month during the first year, subject to a 3 percent annual escalator thereafter. Enrollment in a qualifying Tesla Electric Backup plan or Virtual Power Plant plan provides an $87 monthly credit.
Powerwall Lease is now available with Tesla Electric in Texas
Whole-home backup for $35/month, with a low fixed electricity rate
– Two Powerwalls, $0 installation
– Storm Watch outage protection
– One app to manage it all pic.twitter.com/oTzqc6K3aF— Tesla Energy (@teslaenergy) August 13, 2026
This credit lowers the effective cost to roughly $35 per month plus applicable tax.
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Installation of the standard system carries no additional charge. The package features Storm Watch for outage protection and allows complete management through a single Tesla application. The system supplies continuous whole-home backup capability.
The Powerwall system enables households to maintain electricity during severe storms that disrupt the utility grid. When outages occur, the batteries automatically provide seamless backup power to the home.
Tesla announces 100k Powerwalls are participating in Virtual Power Plants
Tesla Storm Watch monitors weather forecasts and ensures the units are fully charged ahead of anticipated severe weather events so that power remains available throughout the disruption, keeping lights, refrigeration, and other essential systems operating without interruption.
Availability is restricted to select Texas locations where retail electric choice exists. Participants must lease exactly two Powerwall units and maintain continuous enrollment with Tesla Electric. Solar panels cannot be included under this particular lease arrangement.
The monthly credit activates automatically once the system is installed, receives permission to operate, and enrollment is confirmed. To retain the credit, customers are required to stay enrolled in Tesla Electric and fulfill all program conditions.
Nonstandard installations that involve electrical upgrades or special permitting may lead to extra expenses and might impact eligibility for the credit, so be sure to check with either your installer or Tesla to ensure you will still qualify.
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Elon Musk
Inside Tesla’s secretive $10 Billion “Project Crystal Sun” filing
Tesla filed for a $10.1 billion Fort Bend solar factory, but the site isn’t confirmed.
Tesla has filed paperwork in Texas for a second massive manufacturing project in the same week it locked down its chip fabrication site, this time for a $10.1 billion solar cell plant in Fort Bend County. The filing, submitted July 22 under the state’s Jobs, Energy, Technology and Innovation Act and first surfaced by Sawyer Merritt on X, lists an internal project name of “Project Crystal Sun” and targets a site off FM 762 and FM 1994 near Richmond, about 40 minutes outside Houston.
Tesla is planning to build a $10.1 billion vertically integrated solar cell manufacturing facility in Fort Bend County, Texas, about 40 minutes from Houston, according to a new public application filing.
Tesla is aiming to start construction this year and finish in 2028, with… pic.twitter.com/f3HIK5HGST
— Sawyer Merritt (@SawyerMerritt) August 7, 2026
The application, prepared by Kroll Tax Services on Tesla’s behalf, spans five parcels totaling roughly 3,000 acres within the Lamar Consolidated Independent School District. Tesla wants a 10 year property tax limitation in exchange for the investment, split as $1.5 billion in real property and $8.6 billion in equipment and personal property. The company projects 9,712 permanent jobs once the plant reaches full operation, with 1,147 peak construction jobs during a build window running from this year through 2028 and commercial operations targeted for the first quarter of 2029.
Tesla is not fully committed to Fort Bend County yet. The filing states the company is weighing the site against an unnamed out of state alternative, and frames the tax abatement as what would make Texas competitive against that option. If the district and county decline the incentive, Tesla says it may build elsewhere.
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The plant would handle the full solar cell production chain in one facility, according to the filing, covering wafer and ingot manufacturing, coating, metallization and printing lines, cell testing, automated material handling and cleanroom infrastructure. That scope points to Tesla vertically integrating a part of its supply chain it currently sources largely from overseas partners, mirroring the approach behind its expanding Megapack production in Brookshire, Texas, where Tesla has already built out two buildings for its grid battery business.
The timing lines up closely with Tesla and SpaceX’s other big Texas commitment this month. SpaceX confirmed its Terafab chip factory would land in Grimes County days before this filing surfaced, with construction on that $16.8 billion project starting almost immediately after local officials met with residents. Terafab is meant to produce the AI chips running Tesla’s Optimus robots and Full Self-Driving software, while a solar cell plant would feed a different part of the business, the panels and storage systems Tesla sells to homeowners, businesses and utilities, and increasingly needs to power its own data centers.
Musk has talked about building domestic solar manufacturing capacity before, tying it to the amount of power Tesla’s AI ambitions will require.
Tesla just trademarked ‘MEGAPOD’ with the United States Patent and Trademark Office (USPTO), its latest move in what seems to be a hint that the company is incredibly focused on its AI efforts and storage needs as compute increases.
The application carries serial number 99893717 and lists the applicant as Tesla, Inc., located at 1 Tesla Road, Austin, Texas 78725.
The filing remains in ‘live pending’ status, and it is a new application waiting for assignment to an examining attorney. It has not yet been published or registered.
Tesla just trademarked MEGAPOD
Summary:
“Modular data center hardware systems for artificial intelligence computing, comprised of computer servers, computer hardware for artificial intelligence processing, computer networking hardware, electrical power distribution units, and… pic.twitter.com/3l85DsKadl— Robin (@xdNiBoR) June 19, 2026
According to the official goods and services description in the application, Tesla describes ‘MEGAPOD’ as:
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“Modular data center hardware systems for artificial intelligence computing, comprised of computer servers, computer hardware for artificial intelligence processing, computer networking hardware, electrical power distribution units, and cooling systems, sold as a unit; self-contained modular computing hardware systems for artificial intelligence workloads; integrated computer hardware platforms for artificial intelligence computing, namely, enclosures containing computer hardware, power distribution hardware, and cooling hardware, sold as a unit; downloadable software for monitoring, managing, optimizing, and regulating modular artificial intelligence computing hardware systems.”
This description specifies complete, self-contained modular units that integrate servers and specialized AI processing hardware with networking components, power distribution, and cooling systems. It also includes associated downloadable software for oversight and optimization of these systems. The language emphasizes hardware sold “as a unit” and enclosures that combine the necessary elements for AI computing workloads.
Tesla has an established history of developing and commercializing modular hardware systems. Its Megapack product line, for example, consists of utility-scale battery energy storage systems designed as containerized units for grid applications. The MEGAPOD filing follows a similar pattern of protecting a name for modular, integrated hardware platforms, this time focused on artificial intelligence computing infrastructure.
This could be an early move, especially as Tesla did not have trademark rights to the word ‘Cybercab,’ the name of its self-driving, ride-hailing-focused vehicle.
Trademark applications of this type allow companies to secure priority rights to a name for defined categories of goods and services. The USPTO examines applications for compliance with legal requirements, including distinctiveness and absence of conflicts with prior marks. If the application proceeds successfully through examination, publication, and any opposition period, it could result in a federal trademark registration providing nationwide protection. This is what Tesla’s obvious intention is with ‘MEGAPOD.’
Public reports and analysis suggest MEGAPOD could represent modular, container-style AI computing pods designed for easy deployment. These would bundle servers, AI accelerators, power systems, and cooling into self-contained units suitable for distributed AI workloads. This approach aligns with Tesla’s announced AI compute strategy.
In March 2026, Elon Musk outlined plans for “Digital Optimus” (also referred to as Macrohard), a joint Tesla-xAI project for AI agents capable of handling complex digital tasks. The plans include running these agents on Tesla’s AI4 hardware in parked vehicles as well as dedicated compute units installed at Supercharger stations, which collectively offer substantial unused electrical capacity.
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What is Digital Optimus? The new Tesla and xAI project explained
A modular hardware platform like the one described in the ‘MEGAPOD’ filing would support scalable, rapid deployment of such distributed compute resources. It could complement Tesla’s other AI infrastructure efforts, including the Dojo supercomputer used for training models and the development of AI systems for autonomous driving and robotics, by enabling edge or regional AI inference without reliance on traditional centralized data centers.
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