Something exciting is brewing in Tesla’s Hawthorne, California design centre these days. We’re not even talking about the new S70D 4-door electric-powered sedan.
Instead we are referring to the new Tesla Powerwall, the home battery system hailed as the future of renewable energy. This will bring Tesla once again to the limelight that goes beyond the automotive world and millions of households in America lie in wait.
Like the S70D, the Powerwall comes without a teasing tweet from its prime mover, Elon Musk. Homeowners can pre-order this innovative lithium-ion battery pack and have it delivered to their doorstep this summer. At $3500, this energy storage system allows homes to generate its own power source straight from the sun. These batteries come in two varieties for household use. A 7 kilowatt hour is recommended for daily use while the 10 kilowatt-hour version is meant for weekly cycles. Both batteries store solar energy during daytime. Powerpack, on the other hand, is the battery system designed for industrial use. This battery storage system can be clustered to deliver 10 megawatt hours of power making it attractive to retail giants Amazon, Wal-Mart and Target.
This paves the way for Tesla Energy, a new subsidiary of the company still spearheaded by Elon Musk that manufactures “a suite of batteries for homes, businesses, and utilities fostering a clean energy ecosystem and helping wean the world off fossil fuels.” According to Elon Musk, this venture aims to alleviate, if not get rid, of people’s dependence on fossil fuel. With 160 million Powerpacks, the US alone can say goodbye to fossil fuel as energy source for electricity. For the world, 900 million Powerpacks will do. But to obtain a 100% renewable energy globally, 2 billion Powerpacks is needed.
Tesla’s optimism in this new venture is quite palpable.
Not only does it eye a multi-billion dollar annual operation, it aims to develop a Gigafactory which can produce half a million battery packs annually. With massive investments from global sources, it projects a $5.1 billion energy storage industry in the not-so-far future.
But why does Tesla prefer to develop the battery market? Musk summed up all the negative aspects saying that they suck, are horrible, expensive, unreliable, stinky, ugly and so on. It would seem that the venture is bent on developing the opposite as the Powerwall is anything but ugly with its sleek ultra hip look that comes in red, white and black. Its size, at 4ft tall, 3ft wide weighing 220lbs each, begs for another story though.
The question of underlying costs, however, undermines the optimism behind the product. The costs of installation for both the battery and power inverter are not clearly laid out. Notwithstanding the estimated 30 cents per kilowatt hour initial cost of the batteries, the long-term maintenance cost of the batteries is also not determined.
Tesla’s open-sourced patent policy is the ultimate game changer. By encouraging healthy market competition and more venues for environmental conservation, this will eventually pave the way for a surge of energy storage systems that will drive the price of lithium down. At competitive cost and with more support from big industrial corporations, the Tesla Powerwall will make the power grid obsolete.