by Tom Randall
Tesla Chief Executive Elon Musk introduced a new family of batteries designed to stretch the solar-power revolution into its next phase. There’s just one problem: Tesla’s new battery doesn’t work well with rooftop solar—at least not yet. Even Solar City, the supplier led by Musk, isn’t ready to offer Tesla’s battery for daily use.
The new Tesla Powerwall home batteries come in two sizes—seven and 10 kilowatt hours (kWh)—but the differences extend beyond capacity to the chemistry of the batteries. The 7kWh version is made for daily use, while its larger counterpart is only intended to be used as occasional backup when the electricity goes out. The bigger Tesla battery isn’t designed to go through more than about 50 charging cycles a year, according to SolarCity spokesman Jonathan Bass.
Here’s where things get interesting. SolarCity, with Musk as its chairman, has decided not to install the 7kWh Powerwall that’s optimized for daily use. Bass said that battery “doesn’t really make financial sense” because of regulations that allow most U.S. solar customers to sell extra electricity back to the grid.1
Musk said in a quarterly earnings call on Tuesday said that demand for the batteries has been “crazy off the hook,” with 38,000 reservations for the Powerwall. While storing residential power with the Powerwall is still more expensive than grid power, he said, “that doesn’t mean people won’t buy it.” Demand for the new batteries, including those for businesses and utilities, has been so strong that the company may need to considerably expand its $5 billion battery factory that’s under construction in Nevada.
The Economic Case for Tesla’s New Battery Gets Worse
SolarCity is only offering the bigger Powerwall to customers buying new rooftop solar systems. Customers can prepay $5,000, everything included, to add a nine-year battery lease to their system or buy the Tesla battery outright outright for $7,140. The 10 kilowatt-hour backup battery is priced competitively, as far as batteries go, selling at half the price of some competing products.
But if its sole purpose is to provide backup power to a home, the juice it offers is but a sip. The model puts out just 2 kilowatts of continuous power, which could be pretty much maxed out by a single vacuum cleaner, hair drier, microwave oven or a clothes iron. The battery isn’t powerful enough to operate a pair of space heaters; an entire home facing a winter power outage would need much more. In sunnier climes, meanwhile, it provides just enough energy to run one or two small window A/C units.
