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Tesla batteries a welcome challenge to energy market

Elon Musk, CEO of Tesla, unveils the PowerPack, a scalable industrial battery, Thursday in Hawthorne, Calif. A home battery, PowerWall, will be available at $3,500 for 10kWh and $3,000 for 7kWh.Kevork Djansezian/Getty Images

The sort of breathless anticipation that precedes every announcement by a major tech company might seem ridiculous for those outside of the Silicon Valley bubble. But in case of Tesla’s new product line, the hype was justified. On April 30, the electric car company unveiled several large batteries, one line that can power a private home, and one large enough to store energy for use on the electric grid. These products, and the prices which they will be sold for, might revolutionize the energy market — and power companies should be watching very closely to see how well they work.

The public was given a first look at these two batteries at an event at Tesla’s design studio in Hawthorne, Calif. The smaller one, called Powerwall and designed for use in people’s homes, comes in two sizes, 7 kilowatt hours and 10 kilowatt hours. These batteries have an expected retail price of $3,000 and $3,500, respectively. They are designed to work with solar panels, meaning that a homeowner who has installed solar cells on her roof could charge the battery during the day, and then help run her house off of it at night.

Powerwall could be a boon to individual homeowners, and residential solar companies like SolarCity are reportedly already planning on selling Tesla’s batteries along with their panels. But the real innovation will most likely come with Tesla’s other product, a utility-scale battery called Powerpack. Each individual unit can hold 100 kilowatt hours of power, and they are stackable, meaning that they can theoretically be combined to build energy storage facilities capable of holding a powerplant’s worth of energy. Powerpack is expected to sell for $250 per kilowatt hour, meaning that one unit will likely cost $25,000.

Large-scale energy storage technology such as Powerpack will be crucial in making green energy truly competitive with fossil fuels. The greatest drawback of solar panels and wind turbines is that they only generate energy when conditions are right — solar panels are useless at night and wind turbines don’t work on calm days. That means that utilities often have to turn to coal, oil, or natural gas plants during times of peak demand. However, if large-scale batteries could store power generated from wind farms and solar plants when demand is low, and then send that power to market when the need for energy spikes, that would take away one of the chief advantages fossil fuel generators have over their cleaner competition. This might come sooner than many power companies expected it to — Elon Musk, Tesla’s CEO, announced during the talk that the company is already in discussions with an unnamed utility about building a 250-megawatt energy storage facility powered exclusively by Powerpack units. That’s bigger than most wind farms and solar plants, and greater capacity than all the other energy storage projects expected to come on line this year in the United States, combined.


Tesla isn’t the only company interested in energy storage. General Electric, for one, has invested heavily in the sector. But the price and scale of Tesla’s efforts are sure to attract the attention of major utilities, and the company, which has always enjoyed a veneer of high-tech coolness, will also bring some much-needed swagger to an industry that has so far only attracted the attention of energy insiders. It is too early to say whether or not Tesla’s batteries will deliver as promised. But the company’s claims should get utilities thinking seriously about energy storage technology — and that bodes well for both consumers and the environment.