The home energy storage product that Tesla Motors Inc. unveiled one month ago is getting an upgrade and now will have twice its original capacity, company CEO and co-founder Elon Musk said yesterday.
The electric carmaker heard some criticisms about its Powerwall energy storage offering after its May 1 unveiling, "took some of that negative feedback to heart" and made improvements, Musk said.
"We’ve dramatically increased the power capability of the Powerwall," Musk told shareholders meeting in Mountain View, Calif. "It basically more than doubled the power output of the power pack, and the price is going to stay the same."
The Powerwall, priced at $4,000 including installation for a 7-kilowatt-hour system, is aimed at customers with solar panels on their rooftops, Musk said, adding that the company would prioritize delivery to those with Photovoltaics. Tesla has a partnership with several solar companies, including SolarCity Corp., where Musk is chairman.
The Powerwall in the 7-kWh size intended for daily use now will have the ability to power lights, appliances and electronics consuming up to 5 kWh at one time. That’s an increase from the original 2 kWh, Musk said.
"You’re basically doubling the output," said Matt Roberts, executive director of the Energy Storage Association, an industry trade group. "So it could do more at once than previously it would be able to."
Powerwall also comes in a 10-kWh weekly cycle version. Musk yesterday didn’t directly address any changes to that option.
The announcement on the 7-kWh version came a day after Musk and his chief technology officer, JB Straubel, at a New Orleans conference lauded Tesla’s storage offerings to executives of the nation’s biggest utilities (EnergyWire, May 9). The audience at Tesla’s shareholder meeting yesterday clapped loudly following the announcement on Powerwall. Roberts said many consumers, who might not understand the nuances of energy storage, believe that "more is better, so that’s positive marketing for Tesla."
But on the larger scale, Roberts said, "it doesn’t really reshape anything for the industry." SolarCity already has said that it plans to install battery storage with all rooftop PV systems starting in 2017, he said. SunPower and SunEdison are on similar trajectories.
"Many companies are going in this direction for a number of different reasons," Roberts said.
Creating a ‘benchmark’ for others
By Musk improving the Powerwall, however, "he’s setting the bar and now others are going to have to pivot against this," Roberts said. "It’s sort of a benchmark that others will use. It’s undoubtedly going to influence the industry. Is this the revolution that pushes everything over the top? No."
Tesla received 38,000 requests for the Powerwall and 2,500 for the larger, utility scale Powerpack, within a week of announcing the products last month (EnergyWire, May 9).
It’s that type of demand that likely has allowed the fast improvement in the product, Roberts said. Selling more of the Powerwall systems lowers production costs for Tesla. And because the lithium-ion cells in both storage offerings are the same ones that go in the Tesla cars, when the company sells more vehicles, it also potentially lowers the price of its energy storage products. The company is building its "Gigafactory" in Nevada to make batteries.
While the Powerwall has attracted a lot of attention, Musk said yesterday the Powerpack for utilities and commercial customers represents about 80 percent of the company’s energy storage business. The Powerpack is a 100-kWh tower that can be stacked to meet any level of energy need (EnergyWire, May 6).
The larger Powerpack gives utilities the option of not using grid power when it’s most expensive, Musk said. The difference between power purchased at peak daytime rates and in the middle of the night can be 2 to 1, he said.
"For utilities it’s quite compelling to use the Powerpack," Musk said.
The Powerpack has the ability to change how utilities operate in the future, Musk and Straubel added, freeing the companies from having to build new substations along with associated power lines and transformers.
"The Powerpack is independent of renewables," Musk said. "You could actually take probably something close to half of all the power plants in the world and turn them off if you had batteries. I’m not sure this is well appreciated."
Getting into utility market tough
Roberts with the Energy Storage Association agreed that for utilities "energy storage really has a big value proposition." There has been billions of dollars worth of investment for energy demand peaks that comprise 10 to 15 hours a year, he said.
But Tesla in the storage market is going up against competitors who have years of experience and reputations for success, Roberts said. He noted that a number of utilities throughout the country recently have procured energy storage and that Tesla didn’t win any large contracts.
Southern California Edison in its recent solicitation of energy storage awarded 100 megawatts to AES Corp., Roberts said, adding that "they’re more of a known entity in the utility world."
"The big thing Tesla’s done, and which has benefitted the industry, is they’re a known consumer brand," Roberts said. "That is a big deal. They’ve really kind of captured the imagination of the consumer.
"Bringing a known brand into this absolutely helps move the needle for the industry," Roberts said.