Yeah, you might say that Tesla’s big battery announcement went over pretty well. Within days of introducing the Powerwall and Powerpack – attractive units, but more importantly, less expensive than expected – the company had booked $800 million in reservations.

Image snipped from Tesla's April 30 battery announcement.
Image snipped from Tesla’s April 30 battery announcement.

And no matter what you think about the immediate usefulness of the Tesla Energy batteries, the enthusiastic reaction should serve to propel advancement in producing better and cheaper energy storage options, and that will only help encourage more renewable energy to be deployed.

Tesla revealed reservation figures as part of its quarterly earnings call a week after the battery announcement, saying it took around 38,000 reservations for the 7-kilowatt-hour and 10-kWh Powerwalls, intended for home and small business use, and about 2,500 reservations for the 100-kilowatt Powerpacks.

Here’s the thing about the Powerpacks, though: Elon Musk said the typical order was for at least 10 units (they can be installed together to increase storage capacity), so as Bloomberg calculated, the reservations in sum could represent 2.5 gigawatt-hours of energy storage.

Tesla Powerpack unit.
Tesla Powerpack unit.

To put that in perspective, California gave the energy-storage market a big boost in late 2013 when it mandated that the state’s investor-owned utilities bring on 1.3 gigawatts of energy storage by early next decade. Yes, that’s gigawatts (power output) not gigawatt-hours (stored energy). But if we assume the Powerpack has output commensurate with the Powerwall (2 kw continuous, 3.3 kW peak), those Powerpack reservations could total 825 megawatts of power. That’s huge given where the market has been.

In a way, the success of the Powerpack isn’t a surprise; at this point, it probably makes more sense than the Powerwall.

The Powerwall, at around $350/kWh for the battery alone, is well priced, but the Powerpack is an even better bargain at $250/kWh. And the fact is, at this point, big companies and utilities are better positioned to take advantage of energy storage.

Battery storage has an exciting future for residential use, but the price is still fairly expensive and most people don’t have the kind of time-of-use rate plans that might make load-shifting economic. This is especially true for those who have a home solar system and a solid net metering program where they live.

The equation, right now, appears to be better for bigger customers who can trim hefty peak-demand charges with storage. And utilities could use the Powerpack to meet their own storage needs, whether mandated or not.

That said, SolarCity is talking about the Powerwall as a tool that could pay off for both utilities and homeowners. The idea is that a big pool of home batteries could offer a valuable grid service to utilities, who could then cut homeowners in on a portion of that value stream. We’ll see how that plays out.

What we know with certainty is that there’s now wide recognition of the possibilities with energy storage, excitement even. Yes, there are legitimate questions as to how – perhaps even whether – the early adopters will realize economic gain from their Tesla Energy batteries. But a corner appears to have been turned, there’s no question about that.

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