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

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

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.