Elon Musk’s Next Business Venture: Home Energy Storage

Tesla FactoryHow do you keep your 100-percent-solar-powered home’s lights burning bright at night? How do you maintain electricity during a power outage or natural disaster? The answer: home energy storage devices, which represent a growing market for utilities looking to balance the supply and demand of electricity, as well as consumers that want to get the most out of their renewable energy systems.

And now Tesla, the automaker famous for its all-electric Model S sedan, wants to get in on the action. In an earnings call last week, CEO Elon Musk announced that the company will soon unveil a consumer lithium-ion battery that can be used to store energy in homes or businesses, according to Green Car Reports.

Musk noted that the battery pack’s design is complete and that he was pleased with the result. The Palo Alto, California-based company will start production on the consumer battery in about six months, he said.

It was only a few sentences during last week’s conference call, but Musk’s comments set business media abuzz. Green Car Reports confirmed with Tesla’s director of global communications, Khobi Brooklyn, that the luxury electric vehicle maker will soon formally announce its new product.

Releasing a consumer battery pack is almost a no-brainer for Tesla: The Silicon Valley company already manufactures residential battery systems for customers of SolarCity, the solar installer that names Musk as its chairman and largest shareholder.

Speculation that Tesla would delve deeper into consumer energy storage began last year when the media uncovered documents filed with the Securities and Exchange Commission indicating the company planned to produce lithium-ion batteries for “stationary storage applications” – in addition to batteries for its luxury vehicles – at its new “Gigafactory.”

Then, in an earnings call last May, Musk spoke about the company’s plans to build a battery system for homes, rather than just cars, Forbes reported.

“We are trying to figure out what would be a cool stationary (battery) pack,” Musk said in the call. “Some will be like the Model S pack: something flat, 5 inches off the wall, wall mounted, with a beautiful cover, an integrated bi-directional inverter, and plug and play.”

In addition to serving as a back-up power system during an electrical outage, an energy storage device for a home or business can reduce peak-use charges on utility bills. Many utilities charge more for electricity used during times of “peak” energy demand – usually in the afternoon. Consumers with their own energy storage system can draw power from the battery, instead of the grid, during these expensive peak-demand hours, and then recharge the battery during off-peak times, when the electrical rates are lower.

While the global residential energy storage market has lagged in recent years – mainly because of its close ties to the volatile solar market – the sector is poised to expand by 90 percent this year, according to research firm IHS. As the solar industry booms, lithium-ion battery prices drop and homeowners become more interested in going off the grid, IHS predicts that the home energy storage market, coupled with solar installations, will reach more than 900 megawatts in 2018, up from just 90 megawatts last year. And Tesla and Elon Musk, as always, will be right there on the cutting edge of a burgeoning technology.

Image credit: Tesla Motors

Passionate about both writing and sustainability, Alexis Petru is freelance journalist and communications consultant based in the San Francisco Bay Area whose work has appeared on Earth911, Huffington Post and Patch.com. Prior to working as a writer, she coordinated environmental programs for Bay Area cities and counties. Connect with Alexis on Twitter at @alexispetru

Alexis Petru

Passionate about both writing and sustainability, Alexis Petru is freelance journalist and communications consultant based in the San Francisco Bay Area whose work has appeared on Earth911, Huffington Post and Patch.com. Prior to working as a writer, she coordinated environmental programs for various Bay Area cities and counties for seven years. She has a degree in cultural anthropology from UC Berkeley.

12 responses

  1. Here in Arizona the two major utilities, APS and SRP, aided by the State Corporation commission which regulates the former, and the state legislature are waging a war on solar. They claim that rooftop solar users don’t pay their fair share of the costs of maintaining the grid so they’re adding new monthly charges to our bills to make up the alleged unfair burden the solar customers are shifting to non-solar customers. I can’t wait to get off the grid completely and I’ll be checking into Musk’s batteries as soon as they’re available. The only question remaining will be whether I’ll spring for a back-up natural gas generator. Shine on Arizona sunshine, shine on!

    1. His battery solution is not designed for you to go off the grid.
      Indeed it presumes you will charge it with cheap electricity at night.

      “Many utilities charge more for electricity used during times of “peak” energy demand – usually in the afternoon. Consumers with their own energy storage system can draw power from the battery, instead of the grid, during these expensive peak-demand hours, and then recharge the battery during off-peak times, when the electrical rates are lower.”

      This doesn’t require a large battery to do some time shifting.
      More to the point, the battery modules will likely be taken from the trade in battery packs from the 40,000+ Teslas already on the road. Sure the modules won’t have the same capacity as the new packs, but they will be a lot cheaper, and do the job just fine where weight isn’t a big issue.

      1. Thanks, Arthur. I wasn’t clear on that. I just need to store enough power to get me through the night — I producing plenty of excess during the day to cover that need if I could store it. I’ll keep looking. Thanks.

      2. These storage batteries very well could be used to go off the grid!!! Team your solar panel and battery, with a generator like Richard wants to do and you could easily go off the grid. I have a similar system at my house, %100 off the grid. Lead Acid batteries are horribly inefficient and they do require a bit of maintenance. That technology is about 100 yrs old. Now that Tesla and more importantly Musk, have taken on the incumbents, this technology should be deployed everywhere and would benifit everyone. But the utilities are very much aware how this cuts into their profits, case in point AZ. Go Musk!!

        1. Of course they could.
          If money is no object.

          Which is why for large scale storage Lead Acid is still used, but NOBODY goes off the grid if a normal connection to the grid is available.

          It would be financially stupid to do so.

          Even in Southern California, they sell you power for 14c per kWh at night up until noon and on weekends and you can’t generate it and store it and then get it back for that price.

        2. Li-ion batteries are far too expensive to pencil out for off grid applications when the grid is already present. The only reason why Li-ion has been used in pilot programs in California is because of California’s very limited time $1,620 per kWh cash rebate.

        3. Yes they are too expensive. Until the utility incentivizes the technology; the old, cheaper, less efficient technology will dominate the market (current lead-acid). Elon Musk has come along and challenged the current industry and he has the $$$ and brains to do it. Building a mega-factory to produce these Li-ion batteries, will surely lower the price. Will the Utility companies finally “allow” storage to cut into their profits?

    2. Same thing being pulled here in WI by Scott Walker’s oil/gas/coal friendly Public Service Commission.

  2. No storage system would be complete without the highest performance, lower cost solar panels on the planet. And no I’m not taking about Funpower.

  3. The photovoltaics can work more using the “sun flower” power by the koukou clock powered by gravity.

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