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What the Tesla Powerwall battery means for households

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Since Tesla dropped the Powerwall, numerous claims have been made about what this means for households and the grid, ranging from ‘The Powerwall changes everything’ to why it’s ‘just another toy for Rich Greenies’.

In order to guide the economic discussion, I’ve created a simple calculator which allows people to investigate for themselves the household economic impact of solar plus batteries at Tesla prices!

To access calculator, click on this link. It will download to your laptop or computer. You will need Excel. Simple Solar plus battery economic calculator.

It’s free to download, use, and adapt for non-commercial purposes. Ensure you read the model limitations and assumptions before you begin, and interpret results accordingly.

Example – A working household in Sydney

Here is a sample output for a household in Sydney with 12kWh daily consumption, who install a 4kW solar system with 7kWh Powerwall. They have a typical ‘working household’ load profile with some controlled daytime loads such as washing machine and dishwasher. The energy flows in the charts below are based on an average day – that is with average solar output and average electricity consumption.

solar only

Figure 1: Average day for 12kWh/day household, 4kW solar only, Sydney.

 

solar plus storage

Figure 2. Average day for 12kWh household, 4kW Solar and 7kWh battery, Sydney

Summary

The most notable impact is that the entire evening peak demand is covered by the battery. With solar and battery combination, the households source 92% of their energy from solar, versus just 36% with solar only. The day’s grid cost for this household is just 4c (excluding fixed costs) with solar and battery installed.

With the 7kWh battery pack installed, the householder pays the equivalent of 30c/kWh (levelised cost) for their solar and power, which for many households is at grid parity.

At current prices obtained from Solar City ($US7160 for the 10kWh fully installed), if it were a straight numbers race, the optimal decision for this household, if their flat electricity tariffs is 30c/kWh, is to:

1st – install Solar (16% decrease in annualised net energy cost compared to grid only),

Tied 2nd – Install Solar and battery (0% change in annualised net energy cost)

Tied 2nd – Use Grid power only

What does this mean?

For many households, like the worked example above, installing ‘solar only’ is still the most economic option for household energy supply. At Tesla’s current pricing, ‘solar and battery’ is neck-and-neck with the grid in Australia. But it’s not a hard and fast rule – it depends on the discount rate, real-world variations in the household’s energy use and solar generation, plus a number of unknowns: such as the cost and terms of Tesla’s extended warranty, the efficiency degradation, and the maximum daily depth of discharge.

This simple analysis indicates that the Powerwall will not yet spur mass market uptake, but it is tantalisingly priced for attracting a raft of early adopters, particularly when factoring in the value of reduced grid dependence. If future electricity prices rise and Tesla’s prices reduce, the economic equation could clearly shift in favour of solar and batteries.

Note: this calculator is intentionally kept simple – please read the model limitations within the calculator for more detail before interpreting results. For precise economic analysis, the ATA is releasing an updated battery inclusive version of the ‘Sunulator’ later this year, which will conducts annual simulations for variation in sunshine and household demand.

What does Tesla’s PowerWall do to your daily energy flows? Download the calculator to find out!

Simple Solar plus battery economic calculator

Chris Cooper is an energy analyst and President of Repower Shoalhaven, a community energy organisation who create renewable energy project for everyday people to invest in.

 

 

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  • Jeff Wehl

    that is one well thought out calculator. great work Chris!

  • Chris

    If you downloaded the calculator in the first five minutes of the story going live, please do so again as that version was an older version which has been updated with correct battery costs, which changes the economic substantially.

  • Jacob

    The price is $5000 for a 9 year lease. Including inverter, installation, control system.

    Do the calculation on that basis.

    • that would be $US5,000, for US consumers. So $A calculation is different.

    • Steve Young

      So if you change the DoD assumption from 100% (which will destroy the batteries) to 70% (the usual assumption) solar plus batteries delivers negative benefits of $221/pa.

      • Chris

        Hi Steve, there is growing consensus (amongst speculators mind you) that the 7kWh rated for daily use is a 10kWh pack, already derated and limited to 7kWh DoD. Time will reveal all!

        • Jacob

          Well a tear down will reveal all.

          • JonathanMaddox

            But will we be able to put it together again?

          • nakedChimp

            Don’t let my dad undo the snap-fits, then we’ll get it back together 😉

        • JonathanMaddox

          That would be one way to do it, though I’ve seen the phrase “different chemistry” thrown about a few times. Probably all pure speculation at this point.

          • Jacob

            It does have a different chemistry. Look at the Wikipedia page.

  • Just further on Chris’ comment. The calculator you want is the one with the price at $6,640. Apologies for initially loading wrong one. Agghh!

  • lin

    Very interesting. Solar + battery and grid costs running neck-and-neck means the grid owners will need to start playing fair. This is fantastic news, and hopefully the grid owners will leverage their natural advantage and integrate dispersed renewables generation into the grid fairly, rather than continue to pursue their coal-age grid dominance model.

  • gary

    power wall $3000 US you still need an inverter, cheapest on the market is around $4,000 US wholesale, installation and margin you are looking at $10,000 US

  • Ken Dyer
  • Colin Edwards

    Is an existing inverter such as SMA Sunny Boy 3000TL compatible with the Powerwall, or does it require a new inverter?

  • Tosh Szatow

    Hi Chris, what happens when the network company has to rebalance its tariffs to compensate for lost revenue in the hybrid scenario?

  • Chris

    Hi Tosh! Provocative question which I’m sure networks are asking themselves as well. Shifting or raising tariffs will lead to a dynamic response from households which will worsen the situation for grids. I think networks need to start offering value to customers in different ways. They need to be a service provider not a capital builder. On top of the obvious solutions (i.e. solar and battery), one interesting idea is that they should offer virtual net metering arrangements thereby keeping people connected through grid facilitated energy trading.

    • Tosh Szatow

      Indeed. And they need to be able to do that all in a way that preserves the value of their capital asset while providing value for money to the customer. Ouch, something is going to give.

      • Chris

        You’re right. The regulator has to allow them to decouple their revenues from their capital base, otherwise they’re stuck in a pickle.

        • Tosh Szatow

          So play this scenario out, say they have more flexibility in how they generate revenue. How does this solve the tension between current value of assets, and offering a competitive price to customers?

          • Chris

            Write downs? Lower profits? They’ll need to suck it up somewhere. Not familiar enough with the balance sheets of these network companies…perhaps we should ask Greg Garvin of Transgrid, he has got some ideas.

  • Slatehouse

    Thanks Chris…downloading the calculator now. Will you be at the Solar 2015 conference next week?

    • Chris

      Sorry Slatehouse won’t make it to Melbourne this year

  • Coley

    Hi Chris
    Good article but have a dekko at this
    http://www.bbc.co.uk/news/world-asia-32610477
    Storage ” the technology doesn’t exist”
    This from a BBC science correspondent!

  • WR

    The figures used in this simulation appear to be very conservative. As far as I can determine, it appears to be calculating a price of electricity from the PV system of 10.2 c/kWh. However, systems installed in the past couple years should be providing electricity in the range of 4-6 c/kWh. That makes quite a difference because it turns the FIT from a 2 c/kWh loss into a profit of 2-4 c/kWh.

    As the article pointed out, the comparison you should be looking to make is will PV+Battery+grid power be cheaper than PV+grid power . Its impossible to work this out currently because we don’t know what the price of electricity from the battery will be. Current guesses range anywhere from 20 c/kWh up to 40 c/kWh. But those are just guesses. Generally speaking though, if the price of power from the battery is similar to the grid rate, the PV+battery+grid price will be similar to the PV+grid price.

    You can perform the calculations for your own system using the following method.

    Average price = (Energy generated by PV x price of PV electricity + Energy from battery x Price of battery electricity + Energy from grid x grid rate – Energy sent to grid x FIT rate) / Demand

    So for the example given in the article:
    Daily PV energy = 4 x 3.9 = 15.6 kWh
    Price of PV electricity = $8000 / (4 x 3.9 x 365 x 32 years) = 4.4 c/kWh
    Energy from battery = 56% of demand = 0.56 x 12 = 6.72 kWh
    Price of battery electricity = we can only guess at this value. Lets assume its 25 c/kWh.
    Energy from Grid = 7.68 kW for PV only, and = 0.96 kW for PV+Battery system
    Grid price = 30 c/kWh
    Energy sent to grid = 15.6 – 0.36×12 = 11.57 kWh for PV only
    = 15.6 – 12 = 3.6 for PV+battery
    FIT rate = 8 c/kWh
    Demand = 12 kWh

    Using those figures, the average price of electricity will be
    Av price = 17.2 c/kWh for the PV only system (grid-connected)
    Av price = 19.72 c/kWh fro the PV+battery system grid-connected system

    However, if we were to use a PV price of 6 c/kWh and a FIT rate of 6 c/kWh, the prices would be reversed and the battery system would be slightly cheaper than PV alone.

    In the end, you need to calculate the prices for your own situation to determine which system will be most cost effective.

    P.S. Note that I did not include opportunity costs in the price of the PV electricity. In my view, electricity prices are as likely to increase during the life of your solar panels by as much as the opportunity costs of the panels. And since we are comparing the two, the opportunity costs are likely to be balanced out by the appreciation of the grid price. So there is no point in including either of those adjustments.

    • Chris

      Assumed price of $2/W installed with a discount rate of 4% and lifespan of 20 years. Assumes no degradation or maintenance cost for simplicity. Feel free to play with the inputs to suit your own assumptions.

  • Craig Allen

    Throwing an out of the box idea into the conversation:
    Is there anything to prevent a collective of people from starting a power sharing cooperative that enables them to buy and sell from each other’s solar and home storage systems? Affordable storage might make it feasible for a collective to be independent of electricity retailers throigh virtual net metering within the collective. Would electricity network providers who are not retailers (such as in Victoria) prevent or facilitate this? They would need to be payed a fee for use of their network obviously. All contributors and consumers would need to interact via a sophisticated software system that tracks electricity flows. And rates for electricity use and contributions would need to be carefully calibrated to incentivize people to install PV and/or storage for the benefit of both themselves and the collective. Does such software exist. Would networks interests or legal constraints prevent it? It would enable people who don’t have roof space for PV to instead participate by installing storage and contributing that as a service. Others with more roof space than they need for themselves could install over-sized systems to sell to the collective for profit while buying storage services from others. Could this work?

    • nakedChimp

      probably 5 years from mainstream for an idea like that.. so IMHO, sounds good, run with it 😉

    • Ben

      I’ve been thinking the same. There was a company in Australia, ZBB, that were working on building container sized battery storage solutions but they’ve moved to USA now. If everybody pumped their solar output into something like these, whole streets or communities could go off grid and it might even be cheaper too.

    • Miroslav Belik

      Not only can a community not need a grid but they can supply the grid at a profit. Im sure I read an article of one such coop in England thats making a fair profit.

  • clayton

    i think to buy renewable energy from synergy in perth is around 5c extra, so around 27c per unit. the calculations provided in this article mean that to do solar and battery would be a more expensive option than purchasing 100% renewable energy from synergy. am i missing something here?

  • Susan Clark

    Hi there. I’ve an existing 3.24k system that has paid for itself already, courtesy of the 60c per kWhr NSW gross input scheme. When this scheme completely wraps up I’m planning to transfer to a net scheme (only my excess going to the grid), but all in the family work or go to school during weekdays, and there is little running other than fridge. So either way there’s a lot of ‘wastage’ that I’d like to recover.

    Looking at your calculator for adding batteries only at that stage, I’m completely bamboozled. It seems that I have to deduct more for lost solar credits (payments for my excess solar power going to the grid) than I would ever receive. There’s a few other things besides that which confuse me. Can I ask if you have robustly tested that part of your calculator? As it sits now I’m not even sure if the batteries will pay for themselves in their lifespan, and that seems ridiculous given the solar panels and inverter are completely paid for now.

    • Esmail Attia

      Hi Susan
      You just need to add multi mode inverter and battery ( say 200Ah deep cycle lead acid ) for now , as 1 options , but who is to know your load profiles
      If you are in Sydney I can visit your site ( for enriching my experience in On & Off Grid ( Accredited )

  • Carl Stanfield

    Hi Chris, is it still possible in Australia to purchase off peak electricity via a second meter? I wonder what the impact of the cost would be of doing this on the overall costs.

  • Rob W

    I’ve heard that the inverter is limited to a maximum 2kW output (to ensure battery protection and prolong its life). So running my demand and energy-efficient 9kWh per day house would mean that if I want to boil a kettle and toaster at the same time, well, I’m going to need at least two systems. Add a third powerwall if I want to use the oven and some other appliances too? Have I go this wrong – hope I have?

    • Anton de Waal

      nope that is right

      • Rob W

        As I thought – thanks Anton. So add the cost of the inverters, installation, etc… and upwards of three Tesla systems, this really is unfounded media hype for the consummate salesman, Mr Musk. No real price benefit to a correctly sized system for the demand I require and I don’t have to wait ’til next year. Others might not look as snazzy as Mr Musk’s, but then again, I’m not wanting a fashion statement on my living room wall (I’m still safety conscious too)! Batteries still not a cost effective option at present, unless the network provider is wanting to charge an arm and a leg to connect you to their network running past the end of your very long driveway.

  • Ricardo_62

    Great work Chris, I will use it for teaching if that’s OK, thank you.

    I had a play with some numbers, and being a fairly low kWh household (4-6kWh/day) it seems a pity that Tesla isn’t making a smaller, cheaper battery which would probably cover our needs – still I suppose someone might fill that niche.

    For those interested in a community grid, University of California at San Diego’s micro-grid might be worth a look. There is also a Robyn Williams interview on the Science Show, discussing using electric cars for two way interraction with the grid – charging up during the solar peak or overnight while garaged at home or work, and then partially discharged into the grid when demand peaks. The do this as part of the UCD micro-grid

    http://www.abc.net.au/radionational/programs/scienceshow/electric-cars-to-power-cities/3114164

  • John Ernst

    Taking every circuit except a feed-in circuit off the grid? I am keen to leave the feed in circuit as they pay me 48cents kW/H for my on grid solar. My idea would be to run the house off-grid but leave a separate grid connected solar system.

  • eveee

    A comparison cost should include expected utility rate increases due to fuel cost increases and inflation. This may cancel the interest in the solar plus storage calculation.