Tesla CEO Elon Musk recently told electricity utility companies that they should not be afraid that the Powerwall home battery system will eat into their business, according to Bloomberg. Launched in April, the home battery system enables homes and businesses to store energy, thus decreasing the need to depend upon utility companies for electricity.

Tesla Motors Inc CEO Calms Utilities On Its Battery Systems

Tesla not a competitor for utility companies

In a meeting with utility executives on Monday, Musk claimed that the media misjudged the function of the home battery packs, which are not economic if used as a main source of power. Moreover, consumers are more likely to use the Powerwall battery system in the case of a power failure rather than using it as a main source of electricity.

Further, Musk predicted that electric cars such as the Tesla Model S will lead to a three-fold increase in power demand in the coming years. Of this, only about a third will be served by complementary power sources such as home battery systems, solar panels, etc.

In addition, Tesla’s CEO predicted a positive outlook for utility companies and requested that executives aid the company in establishing car charging stations. Utility firms have so far welcomed the extra power demand that has been generated by electric cars. But at the same time, they have striven to prevent customers from producing their own power. In fact, in some states, utility providers are battling to charge customers for connecting to the grid, even when it does not serve as a main power source to such people.

Rising potential for energy storage systems

Home battery systems, though far from being realized as a primary source of electricity, serve as an effective way to store energy. It is quite capable of functioning with other wind or solar electricity systems installed by consumers. Energy storage systems provide a convenient method to alleviate the issue of an intermittent supply of power.

According to a report by New Energy Finance, global investments on energy storage systems are predicted to increase to $5.1 billion by 2020, compared to $800 million in 2014. In California, regulators have already started pushing utility companies to acquire 1.3 gigawatts of energy storage capacity in the next five years. Tesla itself is planning to set up 1-gigawatt power of battery capacity by 2016.