Tesla Announces Special Batteries To Power Homes At Cheap Rates
Tesla announced a rather disappointing earnings call this week, during which CEO Elon Musk mentioned the company is to produce a stationary battery for powering homes in the next few months. The plan managed to divert some attention from the declining earnings report, as it seems like a good idea to divulge into diverse projects.
Moreover, it also looks like Musk might be able to pull it off, because of SolarCity, a company chaired by Musk and run by his cousin Lyndon Rive. SolarCity is a solar panel installation service, which charges on leases for even lesser than the people pay for energy bills. It then sells the extra energy produced back to the local utility. A win-win situation for all, the company has been highly successful, with over 168,000 customers and 39 percent residential solar market share.
Solar consumption has been expanding rapidly thanks to financing systems like of SolarCity, government subsidies, and a sharp decline in prices of photo-voltaics. However, with such expansion the cons of solar are also surfacing. One, the sun might not be shining when you need power, forcing the user to rely on the local grid station. Two, the sun might be shining for such prolonged periods of time that excess power would have nowhere to go.
Solar consumption is one of the reasons California declared a rather vigorous energy storage mandate. It aims to store 3 GigaWatts of power by 2020. As other states are moving onto creating power from renewable sources like solar and wind, they will obviously need to install energy storage too – providing a ready and waiting market for Tesla’s batteries.
This seems like a pre-planned strategy falling into place. Last fall, Musk and Rive had announced SolarCity would build a huge PV-panel factory, and that every SolarCity unit would come with battery storage within five to ten years, and that the systems would supply power at a lower cost than natural gas. These batteries will be provided by the the gigafactory, which is currently being built in Nevada.
SolarCity has already started installing Tesla batteries, largely on commercial buildings like Walmart stores, which currently have to pay huge amounts of dollars for more consumption during peak hours. Tesla’s batteries now let the stores store the solar power when it is not needed, and then utilize it when rates are high. This has helped in a massive reduction of 20-30 percent off of their energy bills.
The company has not experimented with the residential usage yet, mainly because people would start selling the excess power for outrageously high rates. This practice is called net metering. However, if utilities lower the buyback rate too much, and batteries get cheap enough, people may stop using the grid altogether.
Computer Science student with interests in latest trends in technology, latest news about tech companies, startups, smartphones and football!