Tesla Energy: Changing How Businesses, Homes Use Power - InformationWeek
IoT
IoT
Mobile // Mobile Devices
News
5/2/2015
11:06 AM
Connect Directly
Google+
LinkedIn
Twitter
RSS
E-Mail
100%
0%

Tesla Energy: Changing How Businesses, Homes Use Power

Founder Elon Musk is leading the electric-car pioneer into the energy infrastructure business. Amazon and Target are among those with pilot projects in the works.

Windows 10 Build 10061: App Revamps Galore
Windows 10 Build 10061: App Revamps Galore
(Click image for larger view and slideshow.)

Tesla Motors CEO Elon Musk on Thursday introduced Tesla Energy, a line of large batteries for residential and commercial use. The batteries are part of Tesla's overall renewable energy strategy, which includes commercial pilot programs with Amazon and Target.

"I think we collectively should do something about this [dependence on fossil fuels]," said Musk at a press event, pointing to a graph showing rising carbon dioxide levels, "and not try to win the Darwin Award."

Tesla Energy redefines Tesla Motors, which now characterizes itself not as an automotive company but as "an energy innovation company."

Tesla Motors has always been more than a car company. It is a software and services company, and an energy infrastructure company, thanks to the need for charging stations to support its vehicles. By entering the residential battery market, Tesla is broadening its aspirations in the energy industry.

Musk mentioned his intention to enter the high-capacity battery market back in February. Such batteries provide a means of storing energy from solar panels or the electrical grid, of ensuring energy availability during blackouts or at night for those dependent on solar power, and of mitigating energy prices when demand for power is high. Tesla expects its Powerwall line of residential batteries to begin shipping in late summer, with prices ranging from $3,000 (7 kWh) to $3,500 (10 kWh), plus installation.

Musk's pitch to potential battery buyers is simple: "The issue with existing batteries is they suck," he said. "They're really horrible."

(Image: Video Misery)

(Image: Video Misery)

Companies such as Amazon and Target appeared to agree with that sentiment enough to test Tesla's take on the battery. In keeping with its commitment announced in November 2014 to move AWS to 100% renewable energy, Amazon has been working with Tesla over the past year to develop data center applications for high-capacity battery technology. And now Amazon has begun a 4.8 Mwh pilot of Tesla's energy storage batteries in its Northern California data centers.

[ What's ahead for Amazon Cloud? Read Will Amazon Cloud Revenue Show A Giant Is Born? ]

"Batteries are important for both data center reliability and as enablers for the efficient application of renewable power," said James Hamilton, distinguished engineer at AWS, in a statement. "They help bridge the gap between intermittent production, from sources like wind, and the data center's constant power demands."

Target is also conducting a pilot test as part of its ongoing investment in sustainable buildings.

Whether or not Tesla's residential Powerwall battery makes financial sense for consumers depends on too many different factors to generalize about how long it would take for the investment to pay for itself.

If consumers are baffled by the mathematics involved in making a buying decision, they may be swayed by aesthetics. In contrast to the utilitarian look of other residential batteries, Musk described Powerwall, which comes in red, white, blue, grey, and black, as a work of art.

"It looks like a beautiful sculpture on the wall," said Musk.

In a statement provided by a spokesperson, Monica Giulietti, associate professor of global energy at Warwick Business School, said Tesla's involvement in the stationary energy storage market could make energy storage more affordable.

Giulietti said she sees two primary risks. First is the possibility that the company's battery technology could be surpassed by something better. "In general a lot of research is still being done about the effective way to store powe,r and no technology has clearly emerged yet in terms of storage performance and affordability."

Second, she suggested that a lack of clarity about where battery technology is headed, and the fear of investing in a system that could become obsolete, will keep the majority of potential customers -- apart from early adopters -- from investing in energy storage.

In an April 23 research note, Global Equities Research analyst Trip Chowdhry estimated that the market for residential energy storage batteries amounts to about 20 million households worldwide presently, and that it has a potential value of about $200 billion.

Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful ... View Full Bio

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Page 1 / 2   >   >>
PedroGonzales
50%
50%
PedroGonzales,
User Rank: Ninja
5/9/2015 | 10:23:44 AM
Re: Toy for the Rich
That is a really good point. Using batteries to help support developed countries.  I do want to know whether Tesla would want to partner with government. They could do a trial in South Africa for local business and remote areas.
Whoopty
50%
50%
Whoopty,
User Rank: Ninja
5/4/2015 | 5:36:26 AM
Re: Toy for the Rich
Even if this isn't something that catches on at home however, it has huge potential in enterprise environments. If some of the world's biggest power draws could be removed from peak hours, that could really ease the strain on the grid and make it far easier to balance loads during spikes. On top of that, if there is a dip, power companies could utilise this crowd-funded power storage tech to offload the additional power, instead of shutting down stations temporarily, which can be incredibly inefficient. 
Brian.Dean
50%
50%
Brian.Dean,
User Rank: Ninja
5/4/2015 | 3:04:33 AM
Re: Nothing innovative here! ...moving stuck inventory.
@KarlQuick, you have raised some good points. The architecture of the home battery is an unknown variable at the moment. For CPUs to go from PCs to mobile devices, the architecture had to evolve and go from performance orientated towards power orientated. However, credit goes to the PC industry for creating the economies of scale and production at a leave where a mobile chip became feasible. Likewise, weight is a consideration for a home battery but as you said, it might not be the ultimate consideration. 

I will have to research the Powerwall in detail. What is the weight of the 10Kwh battery? How many hours does it take to fully recharge? And, what kind of depreciation cycle will they undergo? Etc. If the numbers do come out to be economically feasible then, credit will have to go to the automotive industry because, I don't see the smart phone battery evolving into a home or datacenter battery. But, an automotive battery might do the trick.

The problem with a gas generator is that they can be extremely inefficient. For instance, they can cost $2 an hour if demand is 100 watts or 11kwh.
Brian.Dean
50%
50%
Brian.Dean,
User Rank: Ninja
5/4/2015 | 2:34:11 AM
Re: Toy for the Rich
A potential $200 billion market might be an understatement. Developed economies have a huge requirement to maintain efficiency and cut costs, if a home battery can save around 25% on the electricity bill by utilizing a simple algorithm to draw power of the grid during off-peak hours and use battery power during peak hours then, users will opt for it. 

And there has been a lot of news of deaths taking place due to power outages. For example, towards the north a storm can take out the power of entire blocks and residents turn to gas heating -- a dangerous situation if ventilation is not taken into consideration.

And in developing economies, areas that are connected to the national grid can experience many hours of power outage. This causes a lot of loss in productivity and again, I have heard of news of infant mortality because, the household did not have power to switch a fan on.
AQuiroga
50%
50%
AQuiroga,
User Rank: Apprentice
5/3/2015 | 5:02:10 PM
Usage
From a utility standpoint individual consumers without solar systems will not get as good of an advantage (in some areas) as utilities have to keep their pricing the same and reasonable due to regulations restricting how much cost can be built into the rates you pay for your electiricty at home.  Larger companies that have different pricing agreements with the utility can get excellent use out of batteries by storing power during off-peak and using the battery during the peak hours of the day. Pricing between the two time periods can double or even triple per MWh depending on how hot/cold the day is.  

An efficent industrial version would also be a boon for companies who operate certain power plants but do not own them.  Usually they have agreements where they can only turn on the plant 3-4 times a day and must analyze when the most profitable times are to exercise these options.  Making a mistake means lost revenue or even losing money.  The batteries can be a hedge for when the plant is turned on when the demand isn't what was expected.  Also, the batteries can be used to deliver power when all the options for the day have been exercised but a sudden demand is available.
Li Tan
50%
50%
Li Tan,
User Rank: Ninja
5/3/2015 | 10:08:35 AM
Re: Toy for the Rich
The electricity auto and accompanied facilities are still expensive instead of something affordable by normal people. So let's see how the progress of this project will be.
Jack N FranF583
50%
50%
Jack N FranF583,
User Rank: Guru
5/2/2015 | 3:04:18 PM
Re: The Big Question unanswered
Who cares about rooftop solar. Icing on the cake of reliable home/warehouse/factory or Condo, City Regional power-grid. Storing 20% of daily power peaks at windmills, transmission junctions and enough in cities for critical emergency functions at hospitals etc makes sense. Making more smoke does not.

It is a battyery/inverter combo. The best battery with the best inverter. If someone shaves 10% more off the waste/innefficiency of batteries or inverters in the future so much the better. As for getting stuck with another DeLorean, bring it on.
Jack N FranF583
50%
50%
Jack N FranF583,
User Rank: Guru
5/2/2015 | 2:54:56 PM
Re: Toy for the Rich
Autos are toys for the rich. So What/
Gary_EL
0%
100%
Gary_EL,
User Rank: Ninja
5/2/2015 | 1:15:19 PM
The Big Question unanswered
I actually viewed the streaming presentation, which started over an hour late. Other than that the batteries were pretty, and come in your choice of colors, I learned very little. The main question was left Completely Unanswered - What kind of efficiency can utilites and solar farms expect? If you put in 1,000 kilowatt hours, how many kilowatt hours will you get back?

I think putting solar panels on residential roofs is silly. You will turn a $4K roof repair into a $20K roof repair, and, because of the various stresses the solar panels will impose, the roof repairs will be required far more often.
KarlQuick
100%
0%
KarlQuick,
User Rank: Apprentice
5/2/2015 | 1:05:21 PM
Nothing innovative here! ...moving stuck inventory.
Reality.... the mass market for electric cars has not materialized and Tesla has a lot of batteries filling the warehouse.  They need to find some way to unload them.

Tesla 10kwh battery:  $3500 ....needs some way to charge.

Home Depot 11kwh generator: $3000 ....runs 24/7 on natural gas or propane.

A home does not need a small/light battery.  The lithium-ion battery exists not because it is cheap, but because it is small and not heavy.  For home/office use, Tesla's battery offers only the name and eco-glits to recommend it.  Totally a marketing ploy, designed to move stuck inventory.

Note: Tesla and many others are working on small/light fuel cells which will obsolete his batteries.  Another reason why stockpiling them in the warehouse is not really an option.  Their value is shrinking with time.

Googled a bit:  a 10kwh solar panel system to charge Tesla's $3500 battery: $22,000 on Amazon.  Cost of Natural Gas to power the $3000 generator for an hour:  less than $2.  ....still think this is innovative?
Page 1 / 2   >   >>
Commentary
The Coming Wave of Regulation over Facial Recognition
James Kobielus, Lead Analyst, SiliconANGLE Wikibon,  10/18/2018
News
10 Top Strategic Predictions for 2019
Jessica Davis, Senior Editor, Enterprise Apps,  10/17/2018
Commentary
AI & Machine Learning: An Enterprise Guide
James M. Connolly, Executive Managing Editor, InformationWeekEditor in Chief,  9/27/2018
Register for InformationWeek Newsletters
Video
Current Issue
The Next Generation of IT Support
The workforce is changing as businesses become global and technology erodes geographical and physical barriers.IT organizations are critical to enabling this transition and can utilize next-generation tools and strategies to provide world-class support regardless of location, platform or device
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll