American electric car manufacturer Tesla Motors has unveiled a home battery system designed to store energy when rates are cheap for use in expensive peak times.
The sleek white storage device named the Powerwall and previously referred to as ‘the missing piece’, was designed with the ambition to facilitate the shift away from fossil fuels towards renewable power.
In addition to the Powerwall for homes, Tesla offers a whole range of battery sizes for use by businesses and utilities – all derived from lithium ion battery technology used in Tesla Motors cars.
At a launch event at Tesla’s facility near Los Angeles, the firm’s CEO Elon Musk said the company’s goal was to "fundamentally change the way the world uses energy on an extreme scale".
Some analysts suggested that apart from these noble goals, Tesla is quite likely looking for a new source of revenue as its car-making business still fails to make sufficient profit.
Tesla envisions a world where people have solar panels on their roofs (preferably those supplied by SolarCity, another firm with Musk’s involvement), generating power throughout the day. As electricity demand of households tends to peak in the morning and evening hours, not in line with the peak generation times, the home battery would store this surplus energy for later use. Currently, home generators have the only option to sell the energy they don't need to the grid (and buy it back at peak times at the more expensive rate).
The cheapest six-inch wide 10kWh Powerwall comes at $3,500, excluding inverter and installation cost.
Tesla is already testing the batteries in cooperation with SolarCity. The firms have installed several hundred of batteries in local houses with support of California's public utility regulator.
Battery storage technology has already been explored by operators of solar and wind power installations and electrical networks. Tesla wants to break into this market with a 100kWh battery, referred to by Musk as the ‘power pack’.
Musk explained during the conference he expected to have a low but growing gross margin in battery products in the fourth quarter of this year and added that battery products would be "materially profitable" some time next year.
Analysts agree the move towards battery production may prove wise for the car maker, which is currently building its lithium ion battery Gigafactory in Nevada, the USA.
"A cost effective home energy storage system it could prove far more valuable, and profitable, than anything the company is doing with automobiles," said Karl Brauer, a senior analyst with auto industry research firm Kelley Blue Book.
Deutsche Bank estimated sales of stationary battery storage systems for homes and commercial uses could yield as much as $4.5bn in revenue for Tesla.
Though valued at just $200m in 2012, the energy storage industry is expected to grow to $19bn by 2017, according to research firm IHS CERA.