CHEAPER ELECTRICITY

Elon Musk is designing a Tesla battery to power your home

Obsession
Batteries
Obsession
Batteries

In all the excitement over the looming battle for supremacy in electric cars between Tesla and Apple, some pretty important comments last week from Elon Musk were largely overlooked.

During Tesla’s quarterly earnings call, Musk said his car company is progressing with plans to sell a lithium-ion battery for energy storage in homes and businesses.

We’re going to unveil the Tesla home battery, or the sort of consumer battery that will be for use in people’s houses or businesses, fairly soon. We have the design done, and it should start going to production, probably in about six months, or so. We’re trying to figure out a date to have the product unveiling, but it’s probably in the next month or two months. And it’s really great; I’m really excited about it.

We’ve known about this for a while, of course. As I wrote last year, Tesla’s batteries could be huge—and possibly a much bigger product than its cars.

In theory, a homeowner could capture energy in a solar panel on their roof (maybe made by Solar City, which Musk chairs) and store it in a Tesla battery. This is key, because at the moment, one of the main problems with solar power is that, as The Verge neatly put it, “the sun isn’t always shining when you need power, and sometimes the sun is shining when you don’t need power.”

There’s a lot of hype about what kind of threat Tesla could pose to electricity utilities by helping people go off the grid. Morgan Stanley estimated last year that by 2028, Tesla’s US fleet of cars will have an energy storage capacity of 237GW which it said was equal to 22% of US production capacity, and nearly 10 times larger than existing US grid storage capacity. (That analysis doesn’t even take into account batteries sold separately from cars).

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In reality, mass defections off the electricity grid aren’t likely. Solar City CTO and Musk’s cousin Peter Rive has said he has “no interest” in such a scenario, because “the grid is a network, and where there are networks, there are network effects.” Also, it seems to be illegal in some states.

Tesla is actually working closely with utilities on the home battery product. “There’s a lot of interest, and a lot of utilities working in this space, and we’re talking to almost all of them,” chief technology officer JB Straubel said on the conference call. More likely, the batteries will help people sell excess energy back into the grid, and save money on their electric bills.

Rive envisages a scenario where batteries with storage capacity were optimized across the grid, allowing utilities to direct clean solar electricity more efficiently, lowering costs for everyone and helping the environment. “We can do so much more working together than we can working alone.”

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