SolarCity Corp (NASDAQ:SCTY) has agreed upon offering Tesla Motors Inc (NASDAQ:TSLA) made batteries along with its commercial solar systems, with the help of which businesses could bring down the bill they pay as they can store the electricity, says a report from Reuters.

Tesla Motors TSLA

No upfront cost to be paid

Tesla Motors Inc (NASDAQ:TSLA) batteries provide power backup during blackouts, and will be offered to businesses, who will get new solar system installed from SolarCity and finance them through a lease contract or power purchase agreement.

Just like SolarCity’s service, users would access the Tesla battery without paying any upfront cost and the price will be 20% less than what the local utility company charges.

The base for calculating the charges is the maximum amount of energy used during a customer’s billing cycle. The charges are laid in a manner to assist the utility in realizing their investment in power generation and transmission equipment.

Businesses still have to depend on other sources

Businesses, in any case, would have to take some of power from outside as the solar systems would not be able to fulfill the full demand of any business customer.

Batteries would be offered to the customers in areas where the utility demand charges are high, and SolarCity Corp (NASDAQ:SCTY) could offer a substantial cut in the cost. Areas with high utility bills include parts of California, Massachusetts and Connecticut.

“The goal is to have a significantly differentiated commercial product,” Chief Executive Lyndon Rive said in an interview. “There is nothing out there that we have seen that can compete against this.”

SolarCity Corp (NASDAQ:SCTY) is the most dominant solar energy installer in the United States garnering around 20% to 30% of total business. Its business customers include names like Wal-Mart Stores, Walgreen Co, eBay and Intel Corporation (NASDAQ:INTC), among others.

Joint effort of Tesla and SolarCity

Both Tesla Motors Inc (NASDAQ:TSLA) and SolarCity have been working jointly on the battery for over three and a half years according to Rive, who is the first cousin of Tesla founder Elon Musk, also Solar City’s chairman.

Apart from SolarCity Corp (NASDAQ:SCTY), other energy storage service providers like Stem are also foraying into the segment.

The Energy Storage market is fairly new with generators as the common medium for power backup. With the advent of rooftop installation of solar systems, the energy storage system market has become quite alluring.  Solar powers installations have their own limitations as they can produce power only in the day, and the capacity depends upon how sunny the day is.