You could pre-order a top of the line Tesla today and have it in your garage by this summer for just $3,500. No, this has nothing to do the company’s new S70D sedan, or any of its cars, really. This is Tesla’s new Powerwall home battery, and it’s here to bring next-generation energy storage to the masses. Recently unveiled at the company’s design studio in Hawthorne, California, these lithium-ion batteries should serve to expand the company’s footprint beyond the automotive world, and could potentially make Tesla a fixture in millions of American households.
On the surface, the idea for the Powerwall is simple. The batteries (a seven kilowatt-hour version for daily cycles, and a 10 kilowatt-hour version for weekly) charge during the day when solar energy is at its peak, or when energy companies charge less. Then at night, the batteries take on the duties of powering the household. For industrial use, the company also unveiled the Powerpack, a battery system for industrial applications that can be clustered in groups for upwards of 10 megawatt-hours of power, which has attracted partnerships from companies like Amazon, Target, and Wal-Mart.
Both the industrial and home-use batteries make up the new subsidiary Tesla Energy, which the company describes as “a suite of batteries for homes, businesses, and utilities fostering a clean energy ecosystem and helping wean the world off fossil fuels.” Like any project Tesla founder Elon Musk spearheads, the scope of ambition for Tesla Energy is incredibly huge. Speaking at the launch of the new batteries, Musk outlined that 160 million Powerpacks charged with solar energy would be enough to replace fossil fuel-powered electricity in the U.S., 900 million would end fossil fuel-based electricity worldwide, and 2 billion would make 100% of the world’s power entirely renewable.
This may seem optimistic for now, but the energy storage industry is primed for a massive expansion, and Tesla expects that its battery operation will be “a multi-billion dollar per year one in the near term.” Considering that by 2020, Tesla’s multi-billion dollar Gigafactory will have the capacity to produce 500,000 batteries annually, and global investments in the energy storage industry are projected to make it a $5.1 billion industry, Musk’s predictions may not be that far off.
When introducing the batteries, Musk succinctly summed up why he wanted to enter the battery market. “The issue with existing batteries is that they suck. They’re really horrible. They’re expensive. They’re unreliable. They’re sorta stinky, ugly, bad in every way,” and he has a point. You can’t say Tesla’s batteries are ugly, but there’s no word yet on how they smell. Designed with the same eye for style as Tesla’s cars, the Powerwall batteries are sleek and modern looking (they’re available in white, red, or black), but at over 4 feet tall, nearly 3 feet wide, and 220 pounds each, the batteries are anything but inconspicuous.
Even with Tesla’s ambitious plans for their energy division, there are still important details to be determined. Notably absent from any discussion of cost is the price of battery installation and a power inverter. Skeptics also raise questions about the true cost of the batteries over time. In a feature in Forbes, the initial cost of the batteries mated to the current grid is calculated to reach to upwards of 30 cents per kilowatt hour – more than twice the average cost of electricity.
Still, with the influx of energy storage systems, plus the Powerwall’s 10-year warranty, Tesla’s batteries should long outlast the initial startup costs. Musk is also expecting and inviting competition to drive prices down quickly too. Like Tesla, SpaceX, and his Hyperloop project, Tesla is sticking to its open-sourced patent policy, allowing competitors to use Tesla’s technology. Like electric cars and space travel, the company believes that the end justifies the means, and open competition to make the world less dependent on fossil fuel is worth sharing.
With the introduction of the Powerwall, it’s likely that the first Tesla to reach American garages won’t have four wheels. But as the company ramps up its battery production and drives the cost of lithium-ion batteries down, it could soon become a builder of mass-market tech systems that could grow its footprint to Apple-sized proportions. The company has developed an ingenious multi-pronged attack to wean the world off of fossil fuel-based energy sources, and so far, it’s done a remarkable job for being such a young startup. If the Powerwall does half as well as its projected, and multi-national corporations follow Amazon and Wal-Mart’s lead, then the days of America’s hopelessly outdated and overworked power grid as we know it may be numbered.