SolarCity eyes first installations of Tesla’s new batteries this fall

SolarCity is seeking to install potentially game-changing Tesla Motors batteries this fall, and analysts say the product could be especially compelling in California, where state regulators are eyeing sweeping changes in the structure of electricity rates.

“We’re taking orders now and we expect to begin installing in October,” said Jonathan Bass, a spokesman for San Mateo-based SolarCity, which sells and installs solar energy systems in homes and businesses.

Palo Alto-based Tesla caused a stir recently when it announced plans to launch an array of batteries for residential and commercial customers. Tesla’s Powerwall batteries could be used for electricity storage, in connection with solar energy systems, or as backup power supplies.

“We had a record sales lead day on Saturday following the announcement,” Bass said. “There is a ton of interest.”

Prices are expected to start at $3,000 for a battery with a 7 kilowatt-hour capacity and $3,500 for a battery with a 10 kilowatt-hour capacity.

All of this arrives at a time when the state Public Utilities Commission is edging closer to a decision that would increase electricity rates for an estimated 70 percent of electricity customers in California, including those that PG&E serves in the Bay Area, Northern California, and Central California.

The new PUC rules would also jettison fixed-rate pricing for residential customers and replace that with new time-of-use pricing rules that would charge customers more for electricity use during hours of peak consumption.

Forget about running that washing machine, air conditioner and dishwasher when you come home on a sizzling summer afternoon, unless you want to pay sharply higher rates.

“The Tesla battery makes solar power more viable,” said Rob Enderle, a San Jose-based analyst who tracks technology trends. “It makes our ability to use power during times of lower rate costs more feasible. It raises the possibility of getting off the grid entirely.”

The state PUC could make a final decision within weeks.

“SolarCity’s management system will enable the Powerwall battery to be configured for a broad range of uses, including battery backup, time-of-use shifting and grid response,” Bass said.  “We expect to support any or all of those functions in the future depending on how policy evolves.”

The PUC’s new rules, rates — and higher monthly electricity bills — could go into effect as soon as July. Just in time for those sweltering days of midsummer.

“With the battery backup, along with the right software, you could shift your electricity load from high-cost times to low-cost times,” Enderle said. “With a time-of-use smart meter, you could always buy power at the lower rates. Instead of $2 a kilowatt-hour you could be buying at 75 cents a kilowatt-hour.”

The costs aren’t all that far out of line when the expenditures for current backup power generators, argued Tim Bajarin, principal analyst with Campbell-based Creative Strategies, a tech market researcher. Generators to provide power for an entire home can range in cost from $2,000 to $3,000, or even more.

“The Tesla battery isn’t only a rich person’s product at all,” Bajarin said. “As a backup battery, it’s in the price range for conventional generators. It’s ideal as storage for solar energy.”

Prices for fully installed battery and solar systems are now one-third of what they were a year ago, according to SolarCity.

“We expect costs to continue to decline as manufacturing scales,” Peter Rive, SolarCity chief technology officer, wrote in a blog on the company’s site. “Over the next 5 to 10 years, these cost reductions will make it feasible to deploy a battery by default with all of our solar power systems.”


A Tesla Powerwall battery is seen on the side of a home (photo credit: SolarCity)






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  • alrui

    Musk is REALLY good at finding ways to grab a pot-o-gold from the gubment coffers at taxpayer expense! This battery is not an efficient solution for a problem that doesnt even exist!

  • Furthermore

    Sounds like the CPUC is still trying to punish customers who did not chose to have the dirty technology of a smartmeter pulsing on their homes 24/7. Now these customers won’t have the device to prove they were using energy at the cheaper times so they’ll probably wind up paying more again. Very unfriendly and unhealthy!