Tesla says battery storage already makes economic sense for Australia consumers

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Tesla says battery storage already economically viable in Australia, based on tariffs, as it outlines more details of Powerwall product.

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Tesla says battery storage already makes economic sense in Australia, based on tariffs, as it outlines more details of its Powerwall product.

tesla powerwall twoTesla founder and CEO Elon Musk has provided more insight into why his new battery storage product is likely to be a major hit among consumers in countries like Australia, and radically change the utility model in the US, the world’s biggest power market.

In his briefing to analysts earlier this week, Musk also provided more details about the make-up and durability of his battery storage offerings, and clarified some points about inverter issues and durability, brushing aside estimates from some analysts that the Tesla products are not as cheap as some may have thought.

As we wrote on Thursday, Australia and Germany are likely to be the two key markets where battery storage products like Tesla’s Powerwall – on sale in the US for just $US3,000- are likely to be adopted quickly.

“Germany and Australia are very strong markets where it does make economic sense today based on the feed in tariff and the electricity rate structures in those countries,” chief technology officer JB Straubel.

Musk also said there had been a lot of confusion about the pricing of the battery storage offering from Tesla. Some have suggested that the retail price will be effectively double, because the Powerwall will need the same money spent again on suitable inverters.

Musk says that is not right. The Powerwall includes a DC to DC inverter, and that can interface directly with a solar panel installation.

“And if somebody has a solar panel installation, they already will have a DC to AC inverter for the solar panel system, and so no incremental DC to AC inverter is needed,” Musk said.

“In some of the analysis we’ve seen online by people who think are experts, they don’t seem to realize that there is a DC/DC inverter. If you already have a solar installation or you’re going to get one, the DC/AC inverter is already there. That’s an important point in considering the cost of the system.”

He addressed the issue of temperature, which has a supposed limit of 43C. “It’s actually capable of operating at a much wider band of temperature. So we got to fix that specification that’s stated on the website.” As Shaubel noted, the battery will operate in the same places as the Model S EV, which is everywhere, and it doesn’t have to move.

And Musk also addressed some of the questions about cycling and chemical make up.

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.

“Actually the warranty period would be a little bit less than that,” Musk said.

“But we expect it to be something that’s in the kind of 5,000 cycle range capability, whereas the high-energy pack is more like around the maybe depending upon on how it’s used anywhere from 1,000 cycles to 1,500 cycles. And they have comparable calendar lives, and for the high energy one, it’s important to appreciate that this actually has a lot of interest from utilities “

Musk says that the storage will effectively replace gas-fired peaking plants, which are usually needed to respond to surges in demand such as air conditioning.

“You could either have a battery pack which requires basically no maintenance and doesn’t require any fuel and it’s going to peak shave those really troublesome days, or you could have, like, a power plant that requires fuel and maintenance and it’s got to be – it’s always going to be maintained and it takes time. You can’t just start it up in 3 seconds, like you’ve got to have a little bit of notice. But the high energy pack is actually very economically competitive in those sort of situations.”

And the high cycling pack will be good for wind and solar on a utility scale, and that means accelerating the disappearance of fossil fuels, as we noted in our first analysis.

Indeed, Musk expects that the storage capacity of his product at utility scale will be 5-10 times that of residential storage, although that is mostly because the structure of tariffs in most of the US does not provide a huge incentive for battery storage at the consumer level – unlike in Australia and Germany.

In turn, that puts pressure on Australian utilities to not just embrace battery storage, but also to restructure the tariffs that does not penalize solar households, and simply drive them off the grid.

But their biggest challenge remains, however, to recoup the huge investments made in the last five year when, brushing aside forecasts of a solar and storage revolution, they charged ahead and built an even bigger and dumber grid designed to service only fossil fuels.

Still, Musk said some will go off grid anyway, including in the US.

“If somebody wants to do a daily cycling, basically go off grid, it’s going to be more expensive than being on grid. This doesn’t mean that people won’t buy it because there are people who want to go off grid on principle, or they just want to be independent.”

And if just one in 100 homes just wanted back-up, the 10kWh option, so they have still got power in case of an outage, hat would translate into one million households. “We couldn’t even support a small fraction of that right now.”

And Musk clarified some points about the orders so far. The 2,500 orders received for the Powerpack actually meant 25,000 of the 100kWh Powerpacks, because on average each customer was combining 10 devices. The Powerpacks are priced at $US250/kWh, including inverters.

And the number of smaller 7kWh or 10kWh Powerwall devices was actually around 60,000, because customers were on average taking between 1,5 and 2 devices, so the 38,000 reservations meant an order of 50,000 or 60,000 actual Powerwalls, which price between $US3,000 and $US3,500 per device.


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  1. WR 5 years ago

    Big news! Those specs indicate that the 7 kWh battery should be providing electricity for about 15-20 c/kWh in Australia.

    That’ll make it cost effective for grid-connected PV everywhere in Australia where a household’s demand profile is the normal one where about 35% of the PV-generated electricity is used directly with the rest exported at a low feed-in-tariff.

    • Jacob 5 years ago

      5000 cycles is the killer. I thought it would only do 3285 cycles.

  2. Jacob 5 years ago

    Really staggering isn’t it. The grid ignored the fact that solar panels have been getting cheaper since 1977 or earlier.

    Batteries have been getting cheaper since 1991.

  3. Objectif Terre 5 years ago

    “a DC to DC inverter” – Inverter or converter ?

    • 小杜 (xiao du) 5 years ago

      The DC-DC inverter output will plug into the MPPT input of most inverters.

      • wholisticguy 5 years ago

        Most solar inverters also require the grid, and will not operate without it. Isn’t this being pitched as a way to go off grid?

        • 小杜 (xiao du) 5 years ago

          I should have prefixed Hybrid to that.

          Its intended for use with Hybrid inverters.

          Its not necessarily pitched as a way to go offgrid though, in some instances time shifting use for cheaper rates is also viable – eg in on-grid solutions where the battery gets used at peak time.

          • wholisticguy 5 years ago

            Are you aware of any hybrid inverters that it is compatible with other than the fronius symo?

            I also agree that the primary use will be for expanding self consumption of solar, but I also expect that people are going to be disappointed when the next blackout happens after the install and their system turns off too, despite a full battery.

          • 小杜 (xiao du) 5 years ago

            Sufficient Telsa Powerwall hasn’t been released yet, but the Schneider Hybrid unit is also mentioned in their literature as compliant, as is the Sunny Island


            Sunny Island 5048U

            Schneider/Xantrax XW6048

            Fronius Symo series

            In lieu of more info though, i’d say most hybrid inverters should be usable.

            My own posts about it here – goingsolar .co .za/2015/05/03/teslas-powerwall/

          • wholisticguy 5 years ago

            I don’t see how the sunny island could be compatible given the info of 400V DC operating voltage.
            There are several mistakes, and bits of out of date info on your link, but I will comment on them there.

  4. Jay R 4 years ago

    would the tesla battery be good on a boat (marine environment) in use with solar panels and wind generators plus altinators ???? and how long would it take to ship one to australia ???

  5. James Ray 4 years ago

    I’m yet to be convinced about the economic viability of storage. I am an engineer, and for me to be convinced I need to see the maths/economics. Perhaps Tesla or someone else could be so kind as to do this, calculating the levelised cost of electricity in the following scenarios:
    + consuming all electricity from the grid;
    + consuming a mix of energy from the grid and from distributed renewable energy, e.g. a solar photovoltaic rooftop system;
    + having a solar and storage energy system;
    + solar and storage plus energy trading.
    Otherwise, I’ll see if I can do this myself.

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