Home batteries are set to shake down power bills

The revolutionary new Tesla Powerwall home battery will be available in Australia next year. What does it do and how will it benefit you?

Never having to worry about paying an electricity bill is a thoroughly appealing prospect. Reducing both your electricity bill and your carbon footprint is doubly appealing. Never having to suffer the inconvenience of a power outage again positively triples the appeal. And it appears this win/win/win solution is fast approaching, at an upfront cost accessible to many Australians.

In April this year, Tesla Motors, makers of the Tesla Model S electric car, announced the launch of Tesla Energy – a suite of high-capacity batteries designed to store electricity. Of the three models, each aimed at different levels of electricity use, the one for use in the home is the Tesla Powerwall. There is also one for business use and a very large capacity battery for use by utility companies.

What sources of energy can the Powerwall work with?

The batteries can work with wind and solar electricity systems as well as the traditional power grid, storing energy during times of peak production or when power from the grid is cheapest and allowing its dispensing later. This eases the problem of intermittent supply when the sun isn’t shining or the wind isn’t blowing, or providing back-up power if the grid goes down.

Solar battery storage isn’t revolutionary, however the cheapest lithium-ion battery storage system currently on the market costs around $AU15,000 including installation. At a price of $US3000 for a 7kWh lithium-ion battery pack, Tesla has significantly reduced the price of solar battery storage, without compromising on quality. What’s more, the Powerwall comes with a 10-year warranty, something not available from any other battery company, and it’s compact, easy to install and maintenance-free.

Investment bank Morgan Stanley has said it expects the arrival of the Powerwall will catalyse the solar energy sector and lead to a rapid take-up of battery storage by Australian consumers.

From powering cars, to powering homes

Similar to the battery used in the Model S electric car, the Powerwall is a rechargeable lithium-ion battery that stores energy from solar panels or load shifting from the electricity grid to power your home at times when your solar panels aren’t providing enough electricity, for example, in the evening. It also provides a backup electricity supply in case of power outages.

Powerwall consists of the lithium-ion battery pack, a liquid thermal control system and software that receives dispatch demands from a solar inverter. The compact unit is mounted on a wall and integrated with the local electricity grid, or connected to the home’s solar panels to harness excess power and allow homeowners to draw energy from their own reserves when needed.

Closing the gap between supply and demand

In most homes, electricity use is higher in the morning and evening than during the day, when solar energy is plentiful. Powerwall closes this gap between your renewable energy supply and demand and makes your home’s solar energy available when you actually need it. It also reduces demand on power plants and reduces carbon emissions (and your power bill by avoiding peak rates). In the event of an outage, Powerwall automatically switches to battery power.

While home batteries are already available on the market, the current generation are bulky and can be expensive to install and maintain. Powerwall, on the other hand, is completely automated, compact, easy to have installed by an electrician and requires no ongoing maintenance.

Powerwall, due to arrive in Australia in early 2016, will be available in 10kWh weekly cycle and 7kWh daily cycle models. Both will offer 10-year warranties and sufficient energy to power the average home during peak evening hours. For larger than average homes (with more than four bedrooms), multiple batteries can be installed together. The wall-mounted Powerwall can be installed indoors or outside, however in areas where temperatures tip over 43C indoor installation is advised.

It’s estimated that 75 per cent of all electricity produced in Australia is generated by coal, with an average cost per household of about $2050 annually. Installing a Powerwall could potentially cut this cost by half, even without solar power.

While it’s ideal to pair the Powerwall with solar panels, households with no solar power still benefit from load-shifting, as the battery charges itself during the night when electricity is cheaper and discharges during the day when peak rates apply.

Preparing for Powerwall

Homeowners who already have solar systems can get their systems upgraded to support a Powerwall. Anyone planning to install a solar system prior to the Powerwall launch in Australia should ensure their system is Powerwall-ready in preparation.

There’s a crucial financial factor in getting a Powerwall-ready system now – the government-run solar energy financial incentive scheme. If you install a solar system now, it is subsidised by a government scheme worth about $700 per kW installed. The scheme is currently in place until at least May, 2017, but the dollar value will drop as the market for solar rises.

An investment in the future

The Powerwall  will launch in the US priced at $US3000 for the 7kWh model and $US3500 for the 10kWh model (excluding inverter and installation), with higher capacity models available for business use. As at August 2015, there was no definitive word on pricing for the Australian market but it’s expected the fully installed price for a 7kWh battery will be approximately $6000, so you’re looking at a relatively low initial investment in terms of ongoing future savings. Similarly priced systems from other major companies, including LG, Samsung and Bosch, are also expected to launch in 2016.

Tesla Motors, based in California, was named after eccentric genius and pioneer of electrical engineering, Nikolai Tesla, and has a stated mission to become an energy innovation company enabling zero-emission power generation. With the launch of Tesla Energy, the company is taking another vital step away from the use of fossil fuels and towards a sustainable energy future.

“Our goal here is to fundamentally change the way the world uses energy,” Tesla’s CEO Elon Musk told Bloomberg. “We’re talking at the terawatt scale. The goal is complete transformation of the entire energy structure of the world.”

Musk predicts 80 to 90 per cent of Tesla Energy sales will be in the large Powerpack system, designed to help major utility companies store power to reduce the need for expensive facilities that only run during times of peak demand.

Tesla’s $US5 billion ‘gigafactory’, currently in construction near Reno, Nevada, will drive down the cost of the company’s energy storage products even further through mass production. More such factories will be necessary in order to assist the transition from fossil fuels to renewable energy, Musk said.

More power to Tesla, and other companies leading the way.