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Tesla’s Musk says Powerwall sold out for 12 months, demand “just nutty”

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Tesla says demand for batter storage products “just nutty”, and cites Australia and Germany as countries where household system will be economic.

tesla powerpack

The hoopla around Tesla’s battery storage device continues apace, with Tesla founder and chairman Elon Musk saying that demand for the stationary energy storage is “just nutty,” and the Powerwall home system is already sold out through mid-2016.

Musk told analysts in a phone hook-up after his electric vehicle manufacturer’s first quarter results that around 38,000 reservations for the battery system system had been received.

Interestingly, it was not just the home system that was gaining attention, but the commercial and grid level Powerpack, which analysts suggest is already economic. Some 2,500 companies had put in expressions of interest, around 10 units each.

“The response has been overwhelming. Like, crazy,” Musk told the analysts, before throwing in a few more superlatives such as “off the hook” and “just nutty”.

Demand has been so strong that Musk does not think Tesla can produce enough to meet that demand until mid 2016. That’s when its gigafactory in Nevada is complete. Musk says that the factory could fill its time on stationary storage alone, but will focus most of its efforts on its electric vehicle batteries as it scales up production and introduces new models.

“There’s no way we can possibly satisfy this demand this year,” Musk admitted. “We’re basically sold out through the first half of next year.

“We have to triage our responses to those who want to be a distributor,” Musk said. “It seems to have gone super viral.”

The interest in the commercial scale system, which will come in units of 100kWh each, is not surprising. Tesla says the all-in costs, including inverter but not installation, are $250/kWh. That’s less than one third comparable offerings, and will add around 2c/kWh. Given the way that tariffs are shaped in the US, with a big focus on demand charges for commercial and industrial users, that makes battery storage a good bet.

On the household scale, however, it is less of a good bet, at least in many parts of the US. That’s because most states there have “net tariffs”, which pays solar households the equivalent of retail prices for any exports back to the grid. That removes much of the incentive to battery storage.

That prompted wires such as Bloomberg to write that “battery storage not compatible with solar”. That’s misleading. It is compatible, but it’s economics will depend on the grid tariffs.

One place it might be economics is in Australia, with high electricity prices, excellent solar resources, and low payments – if any – for exports. Tesla Chief technology officer cited Australia and Germany as two markets where the Powerwall was already attractive. These are the same two markets being targeted by competing battery makers such as Australia’s Redflow.

Renewable energy consultant Chris Cooper has put together a calculator that we publish today, which shows that for many people, solar only remains the best value for households. But solar and storage still beats the grid, and with costs coming down, that is likely to continue.

Meanwhile, some more insight has been given into the home battery range. The main product is a 7kWh system and a 10kWh system. The 10kWh system is only designed to be cycled around 50 times a year, meaning it is designed only as a backup in case of outages.

The 7kWh system is presumed to be a 10kWh system that can be cycled more often, hence its lower rating. That is the model that will be used by households for daily use, storing excess capacity, in regions where that is attractive.

In the first quarter, Tesla reported revenues of $UA1.1 billion, almost entirely from car sales. It reported a loss of $US159 million but expects a 20 per cent return from the Gigafactory once its reaches economies of scale.

The home energy battery, which comes with a 10-year warranty, is designed to be mounted on a wall. Tesla’s selling price to installers is $US3,500 for 10 kWh and $US3,000 for 7 kWh. The costs don’t include installation or the inverter that converts direct current power to alternating current for use in the home.

Deliveries will begin this northern summer. It is not expected to be available in Australia until early 2016.

 

   

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  • If 10kwh system is designed to be used in outages, then 50 cycles a year seems too generous. If 7kwh is really a 10kwh system designed for daily use then 10*50/7=71 cycles is too few. For a daily need solar+storage solution which system is better suited then, or neither ?

    • WR

      Either the 10 kWh system is designed to last a lot longer than 10 years or the two batteries have different chemistry and very different expected number of cycles. This is the distinction I have been wondering about since the launch.

      • Jacob

        We really need someone to do a tear down of both versions of the Powerwall. That should tell us A) how many cells per pack, B) what chemistry, and C) cycle the cells till failure to know cycle life.

        • 小杜 (xiao du)

          To quote Musk:

          The 10kWh device is designed as back-up, suitable for 60-70 cycles per year. Its chemistry is similar to the Tesla Model S electric vehicle, and is nickel-cobalt-aluminium cathode.

          The 7kWh system is designed for daily cycling – when homes and businesses will store solar electricity produced during the day. Its daily cycling control constituent is nickel-manganese-cobalt, and Musk expects it to daily cycle for “something on the order” of 15 years.

          Remember industry standard for failure is deemed when pack is at 80% of original capacity, so packs should still be usable, albeit at reduced capacities.

  • Hayden

    I walked into the Tesla showroom two days ago and became, I think, the first in Sydney to place an order. Can’t wait

    • Jacob

      Did you order a car or a grid storage battery?

  • Petra Liverani

    I knew it. Don’t know why I waste time being irritated by the Powerwall naysayers. Whatever its economics people look at it and think, “I want that”. That’s the beauty of Musk’s products (apart from PayPal). You get the wealthier, early adopters who buy when the product might not be strictly economic (or maybe it is – I really can’t figure it out) and they finance development of the product to the point where it is and it’s much more affordable for everyone.

    • Rikaishi Rikashi

      People also tend to underestimate how passionately consumers hate their utilities and desire more independence from them. Especially in Australia.

      If I could devote a moderate amount of my disposable income just to screwing over the incumbent retailers and distributors, I would seriously consider it.

  • Rob Campbell

    At least Danny DeVito won’t have a problem finding a coffin.