"Tesla's also in a very good position to bundle their tech with SolarCity into single offering," Dehamna said. SolarCity is the largest installer of residential solar panels in the U.S., and Musk is SolarCity's chairman. "And, Solar City just announced a partnership with NEST, so it can connect the system to [a] smart thermostat."
A smart thermostat learns usage patterns and adjusts the temperature based on what the homeowner will likely want.
Dehamna said there's a stronger business case for commercial solar power combined with battery storage than the model for residential use. That's because during peak demand hours, utilities add surcharges for businesses that exceed predetermined electricity limits.
So, the more a businesses can rely on solar power and battery storage, the less they'll exceed those preset power limits.
"For example, a business may have an agreement with a utility to not exceed 100kW of power use at any time. The agreement may state that for every kilowatt over that limit, they'll be charged an additional $45," Dehamna said.
"It's based on the most you go over in any 15-minute period in a [billing] month, Dehamna said.
Conversely, it's "very challenging" to build a business case for battery storage in residential solar systems because there's not enough difference between between nighttime and daytime energy use, Dehamna said.
Amit Ronen, director of George Washington University's Solar Institute, said electrical storage, whether using batteries or other methods, is a key component to transitioning to a renewable generation system, but this is not a magic bullet for getting off of fossil fuels.
"We need a massive ramp-up of a range of fuel-free energy generation sources, a much smarter grid that is able to integrate all those resources and a pricing system that accurately prices electricity for peak periods and its impact on the environment," Ronen said.
Are lithium-ion batteries the right technology?
Another issue raised by experts is the volatility of lithium-ion (Li-ion) batteries, which combust when exposed to oxygen.
Some, like Ronen, believe Li-ion technology is both safe and has an enormous leap on the competition. Ronen said Li-ion batteries are a proven technology -- used in everything from smartphones to laptops and cars.
And the cost of Li-ion will come down quickly as production ramps up, just like what happened with photovoltaic panels. Those prices came down 80% in the last five years because of mass production and manufacturing efficiencies, Ronen said.
Within five years, Li-ion will represent 70% to 80% of the battery market, both Ronen and Frankel said, because it's a flexible technology that can power anything from an Apple Watch to a corporate data center.
But not everyone is convinced Li-ion batteries are completely safe.
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