Last night at Tesla’s Hawthorne Design Studio, Chairman Elon Musk outlined the company’s plan to move into the home and commercial energy storage business.
It appears speculation following rumors and leaks last month was mostly right, but “Powerwall” units to begin rolling out this summer for $3,000 for 7 kilowatt-hours and $3,500 for 10 kilowatt-hours are less than $13,000 spoken of in a Guardian report.
These are essentially Apple-esque computer-controlled batteries which start at 220 pounds in weight and measure 4.3 feet tall by 2.8 feet wide by 7.1 inches thick.
For reference, a Tesla Model S stores 60 to 85 kilowatt-hours in its battery, and a Nissan Leaf stores 24 kilowatt-hours.
Larger 100-kilowatt-hour units will also be made available for business and utility customer applications which can be bundled together in 500-kwh to 10 megawatt-hour assemblies.
The packs come with a 10-year warranty, are to be initially built in Fremont, Calif. where the Model S is assembled, then production moves to the GigaFactory in Nevada next year when it comes online ahead of an initial 2017 scheduling.
Uses for the Powerwall can include as storage for solar or wind energy or to capture electricity overnight during less-expensive off-peak hours then make it available during on-peak hours.
It also acts like a back-up generator that silently maintains power to the refrigerator and climate control and computers and etc. in the event of a power outage.
Potentially more than a Model S which stands to save “$10,000” per year in gas according to Tesla’s online ordering page estimate, Powerwall may actually transcend consumer good status and be viewed as a capital good with more payback ability.
Ultimately however, the Powerwall is part of the plan beyond just dollars and cents to stem climate change by switching to a non-petroleum based infrastructure as fast and feasibly as possible.
Before revealing the energy storage solution, Musk had gone so far as to say this was a missing element for the sustainable future.
“For the future to be good, we need electric transport,” said Elon Musk on Twitter Wednesday, “solar power, and (of course) …”
The “of course” we now know is Powerwall, of course.
Introducing it last night he drove points home including that unused electric capacity in America each night is more than several dozen nuclear reactors’ worth – a fact, incidentally, that’s also been testified of by Senator Lamar Alexander (R-Tenn).
”A conservative estimate is that we have an amount of electricity unused at night that’s equal to the output of 65 to 70 nuclear power plants between 6 p.m. and 6 a.m.,” Senator Alexander stated before the Senate Energy and National Resources Committee.
This is something Musk knows as well.
“We have this handy fusion reactor in the sky called the sun” that “produces ridiculous amounts of power,” he said. “The obvious problem with solar is the sun does not shine at night. I think most people are aware of this.”
He also informed the crowds of his supporters that the entire event was being powered by this captured energy, and was thus off the electric grid.
“So this entire night — everything you’re experiencing — is stored sunlight,” Musk said.
It was unclear from the presentation whether Musk’s other business SolarCity will have a direct hand in this new branching off for the automaker into stationary energy storage, but in any event, it is not a new idea.
Prior to the event, Tesla’s VP of investor relations Jeff Evanson had tipped that Tesla would now show why its energy storage solution is more “compelling” – as in cost-effective and attractively designed as well.
As Musk has panned other ideas before such as calling hybrids “amphibians,” and fuel cell vehicles “bull****,” he offered a new descriptor for competitors to his new product that had come before.
“The issue with existing batteries is that they suck,” Musk said. “They’re really horrible.”
That kind of blunt wording could get a public relations professional fired or reprimanded, but coming from the lips of billionaire Musk, it was received in stride, possibly as candor and refreshingly human by many supporters.
As the industry sits back and analyzes whether Tesla is making a good move or not going beyond the realm of strict carmaker, the notion does not come as a surprise to anyone paying attention.
The Gigafactory was known to have capacity to make such energy storage systems, and solar and energy-storage focused Tesla may have other ways to make hay while the sun is shining in Nevada as well.
Yesterday as the announcement was being anticipated, Tesla stock closed down almost 2 percent.
Today analysts have said that Tesla’s offering a far lower-priced product than a luxury car with practical uses and standing to even offset its own costs could lead to greater profitability for the company than the automotive side of the business.
That would be an ideal case, and one Elon Musk hopes for having said this product’s importance is on par with solar panels and electric cars and a necessary component in his vision for a good future.