What do Tesla Batteries mean for Solar Power in Texas?

Source: Tesla Motors

Last week, Elon Musk announced Tesla’s new battery system, the first of its kind for solar power. Musk presented the sleek looking, wall-mounted Powerwall as an affordable alternative to the battery rooms currently on the market, which are often criticized as expensive, odorous, clunky and unreliable.

Since then, the Internet has gone into a frenzy, with some critics prophesizing the end of nuclear energy and others heralding Tesla’s solution as the Holy Grail that will negate our dependence on fossil fuels. There’s a lot of conflicting information about the Tesla battery, its usability and viability, but the orders to date (worth $800 million in potential revenue) would suggest that at least a few people are excited about the latest innovation from the renewables giant.

According to the EDF, there is enough solar energy potential in Texas to power the world twice over, and yet with approximately 57,000 home using solar power we rank 10th in the nation. What does Tesla’s latest venture mean for consumers here, and the solar industry at large? As a consumer interested in solar power as an alternative to fossil fuels, what are your options?

Priced at $3,500, Tesla’s battery holds 10kWhs of electric energy and will deliver approximately 2kWhs of continuous power. For homeowners, there are two offerings currently available: the smaller 7kWh system can be charged on a daily basis, and a 10 kWh system designed for weekly recharging.

Let’s look at each of these options individually. Firstly, the smaller system. In Texas, most solar systems allow for grid use to bridge the gap between the renewable energy supply and peak household demand (e.g. at night or when the sun is not shining). The cost of this grid electricity will be lower than the power produced from the Powerwall. Therefore, the economics of the smaller Tesla system are not yet that attractive, and we would only recommend this system if you are truly looking to go completely off-grid.

For people interested in the batteries in terms of energy security, the larger 10 kWh batteries is a better choice. Designed as a backup for when the grid goes down, they do offer a more cost effective alternative for households during outages. This is a more appealing option for homes with many connected devices or small businesses that need constant power. However, multiple batteries would need to be purchased to power an average household for a night so the price point would be considerably higher than $3,500 with a larger installation.

While Tesla’s solution still has a ways to go in terms of economic and power efficiency, the company’s bold move into home energy batteries will no doubt spark innovation from a number of competitors. Innovation fosters innovation and while Tesla’s solution isn’t quite ready for mass-market adoption just yet, it may just be the catalyst that spurs the market to act.

Thanks to our guest author, Graeme Walker, and Alba Energy for allowing the Energy Finance Report to republish their article. For more information on Alba Energy please visit their website or LinkedIn.