(Screenshot via Tesla)
Tesla's new home battery might not be ready for prime time.
The battery — part of a suite of new technologies, dubbed "Tesla Energy," from the company formerly known as a start-up electric carmaker — was revealed with great fanfare by CEO Elon Musk on April 30.
We were impressed. But the company that Musk is actually chairman of, SolarCity, is being a bit more cautious, at least in the short term.
Actually, the battery isn't right yet.
"The new Tesla Powerwall home batteries come in two sizes—seven and 10 kilowatt hours (kWh)—but the differences extend beyond capacity to the chemistry of the batteries," Randall wrote.
"The 7kWh version is made for daily use, while its larger counterpart is only intended to be used as occasional backup when the electricity goes out. The bigger Tesla battery isn't designed to go through more than about 50 charging cycles a year, according to SolarCity spokesman Jonathan Bass."
Bass told Business Insider that the smaller battery isn't the best choice for a particular type of residential energy usage strategy, know as "peak shaving."
"It doesn’t make sense to do residential peak shaving in much of the US today," Bass said.
Peak shaving is a practice of using solar to gather energy, then storing it for use when grid power is costly and at "peak" demand. In the US, it's currently less expensive for residential customers to run off the grid, so SolarCity isn't currently offering the 7kWh battery, although according to Bass, it will in the future.
The 10kWh battery is useful for SolarCity because it can provide a fall-back power supply.
The 7kWh version, alone or grouped with other batteries, could appeal to customers who want to store grid electric power when it's cheaper and consume it when it's more expensive.
The economics of Tesla's new products are still being digested. But even detractors are impressed by Tesla's creation of the batteries. "It's a luxury good—really cool to have—but I don't see an economic argument," Brian Warshay said, as quoted by Randall.
Warshay is an "energy-smart-technologies analyst with Bloomberg New Energy Finance."
You could certainly argue that all Tesla is trying to do with the batteries is test the viability of a new line of business. That move makes sense in theory (and now practice), as Tesla has always been quite good at developing innovative batteries and the software to manage their power usage. That's what enabled Tesla's cars to match the range of gas-powered vehicles.
However, at $3,00o and up to start — before installation — Tesla's new batteries aren't exactly a cheap option, given their current limits. The low capacity of the smaller home battery means that several would need to be installed to enable even modest banking of grid or solar power.
But bear in mind that Tesla is also building a huge battery factory in Nevada, the "Gigafactory." If Tesla's car business doesn't live up to lofty expectations, justifying the $5 billion price tag for the factory, the battery business could become a customer for the millions of lithium-ion cells that are expected to be produced.
CORRECTION: An earlier version of this post contained a misquote of SolarCity's spokesperson. It has been corrected and updated.
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