Pre-orders for Tesla’s Powerwall have shot through the roof since the company unveiled it last month. The Powerwall home energy units are already sold out until mid-2016. Powerwall comes in two options: 7kWh for $3,000 designed for daily use, and 10kWh for $3,500 designed to provide a backup, plus installation charges. It can be charged using solar energy or the power from electricity grid when energy rates are low.
Elon Musk makes it a lot easier to adopt solar
Sanjeev Mukerjee, a physicist and director of the Northeastern University Center for Renewable Energy Technology, discussed Tesla’s home energy storage with Phys.org. Prof Mukerjee is involved in a number of energy research projects. Mukerjee said having batteries at home is not a new idea. Even an average Joe can buy 12-volt batteries and combine them for a backup storage solution.
But that’s something only hobbyists will do, and most people are not hobbyists. They just want to know what ready-made solution they can buy. That’s where Elon Musk comes in. Tesla makes it all very easy for people. Powerwall also includes software and switching solutions to integrate it with a solar panel. Packaged together, Tesla’s solution makes it a lot easier for people to adopt.
When asked whether Powerwall will have a major impact on society or renewable energy space, Mukerjee said the cost of solar panels has fallen dramatically over the past few years. The biggest impact of Tesla’s new product will be felt in southern parts of the United States. Solar adoption is low there because solar can provide electricity in the daytime, but not in the morning hours or at night time during peak demand when people come home and turn things on.
Tesla’s Powerwall not for everybody
People can store electricity produced during the day with Powerwall and use it during peak hours. However, Mukerjee admitted that it is not for everybody. An average household in the United States consumes about 10,900kWh per year. Let’s say you buy four of Tesla’s Powerwall for $12,000.
The average cost of electricity is $0.13 per kWh or $1,417 per year for an average household. That means you’ll need the Powerwall for consumption of 92,300kWh before you break even. Given the 10,900 kWh average annual consumption, it will take Powerwall a little over eight years to break even. That does not include the cost of installation and maintenance.
Mukerjee says Powerwall is a good first step. But Tesla needs to bring down the cost to drive a wider adoption. Its upcoming Gigafactory is expected to dramatically reduce battery costs.