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Without batteries like Tesla's, the power grid could eventually break

Lucas Mearian | April 29, 2015
Backflow from distributed power systems is challenging an antiquated power grid.

Germany, where residential customers consume distributed renewable energy 80% of the time and use grid power 20% of the time, is also struggling with backflow issues on an antiquated utility grid.

The U.S. installed 6,201 megawatts (MW) of solar photovoltaics (PV) in 2014 and 767MW of concentrated solar power to reach 20 gigawatts (GW) of total installed capacity, enough to power 4 million American homes. Thirty-two percent of new electric generating capacity came from solar in 2014, and the industry now employs nearly 175,000 workers, according to the National Solar Jobs Census 2014.

Energy demand on the grid could drop by more than 15% due to new energy technologies by 2025, according to a report from Accenture.

Tesla has already been piloting its consumer batteries in 330 homes, mainly in California. The batteries, which were displayed at a conference last year, hold 10 kilowatt hours (kWh) of electricity. Tesla also showed a 400kWh battery for businesses. The average U.S. household uses about 900kWh of electricity per month, according to the U.S. Energy Information Administration.

Tesla's home batteries, which are 2.5-feet wide and 3 feet tall, have a starting retail price of $13,000. However, state energy efficiency rebates can cut that cost in half.

Tesla's advantage in offering batteries for renewable power storage

Tesla is in a unique position to offer battery technology for homes and businesses because its CEO, Elon Musk, is also chairman of SolarCity, the largest provider of residential solar systems in the U.S. SolarCity can offer a bundled package of photovoltaic and battery systems. And, Tesla already has systems to regulate power output in its cars, a critical function in distributed power storage systems.

SolarCity already has experience offering financing options to customers, including helping them find government subsidies and setting up lease contracts, since Tesla's residential battery systems prices are expected to be steep, at least initially.

The average cost of consumer-grade battery systems ranges from $13,000 to $20,000, according to Dehamna.

SolarCity has a partnership with Panasonic to produce its lithium-ion batteries and it just entered into a partnership with Nest labs, maker of the Nest Learning Thermostat, which regulates power based on homeowner or business use patterns.

The first 10,000 new customers in California who sign up with SolarCity will receive a Nest Thermostat installed at no additional cost.

Tesla has also been targeting the commercial sector, signing up customers such as Wal-Mart and Cargill, for its battery power systems.

Tesla is far from being the only company entering the energy storage market. Last year, SolarEdge Technologies and Enphase both announced plans to bring a lithium-ion home battery to their solar power management systems.


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