(Bloomberg) — Elon Musk, the billionaire entrepreneur who
unveiled his “Powerwall” home battery Thursday, is already
offering them to SolarCity Corp. customers seeking backup supply
when the grid goes down.
The battery “replaces noisy, dirty fossil-fuel generators
with zero-emission storage technology,” SolarCity said Thursday
in a statement. Musk, whose Tesla Motors Inc. developed the
product, is also chairman of the San Mateo, California-based
Musk is expanding beyond electric cars to sell batteries to
homes and businesses seeking reliability as the grid absorbs
more clean — yet intermittent — energy. Tesla’s battery can
store power at peak production and dispense it later at less
than half the cost of current systems, according to SolarCity.
“The mainstreaming of storage solutions may ultimately
spur a transformation in how electricity is produced,” Pavel Molchanov, an analyst at Raymond James Financial Inc. in
Houston, said Friday in a note to clients. “Tesla’s focus on
behind-the-meter opportunities means that it’s getting into the
newest, least established component of the storage space.”
“In contrast to the century-old model of centralized power
plants and long-distance transmission lines, the rise of
distributed generation” can in the “very long run lead to the
obsolescence of the traditional utility model,” Molchanov said.
Musk is seeking to solve this issue with a battery that
costs more than 60 percent less than previous residential solar
power storage systems, SolarCity said in the statement.
“We have this handy fusion reactor in the sky called the
sun, you don’t have to do anything, it just works — shows up
every day and produces ridiculous amounts of power,” he said
Thursday at Tesla’s product announcement.
“The obvious problem with solar power is that the sun does
not shine at night,” Musk said. “The issue with existing
batteries is that they suck, they’re really horrible.”
SolarCity is offering two payment options. For a 10
kilowatt-hour system, customers can prepay $5,000 for a nine-year lease, which includes installation, a maintenance
agreement, the electrical inverter and control systems, Jonathan
Bass, a spokesman, said in an e-mail Friday. Customers can also
buy the same system outright for $7,140, Bass said.
For businesses, SolarCity will incorporate the Tesla
batteries into its DemandLogic storage system, which is used to
dispense stored power when prices are high. It will also use the
batteries in its GridLogic service that provides clean power to
Tesla will also work with the energy software company
EnerNOC Inc. to use the batteries to offset power use in
commercial and industrial buildings during periods when grid
power is in high demand, starting with select EnerNOC customers
in California, the Boston-based company said Friday in a
“Batteries, solar projects and other on-site energy
systems — that’s the muscle that’s being put in the system and
EnerNOC’s software is the brains to make all that muscle work,”
Tim Healy, EnerNOC’s chief executive officer, said in an
SolarCity began taking orders for the Tesla batteries
Friday and expects to deliver them in October. The company had
been installing power storage systems on a limited basis.
Black & Veatch, an infrastructure builder, plans to work
with Tesla on building power storage systems for commercial and
industrial customers, the Overland Park, Kansas-based company
said Friday in a statement.
SunPower Corp., the second-largest U.S. solar manufacturer,
began offering power storage systems to customers in new homes
built in California by KB Home last June.
“To the extent that Tesla does a great job, that’s good
for that emerging segment and that’s good for SunPower,” CEO
Tom Werner said in an interview. “I’m excited. The larger the
market, the more opportunity there is.”
Sunrun Inc., a SolarCity competitor, also will sell Tesla’s
home battery system, the company said Friday. The Vermont
utility Green Mountain Power Corp. also plans to offer the Tesla
battery system, it said in a statement.
Musk owns 21.4 percent of SolarCity and is the company’s
largest shareholder as of Apr. 23, according to data compiled by
Bloomberg. He owns 22.4 percent of Tesla, as of Dec. 31.
(An earlier version of this story corrected SolarCity
Corp.’s name in the first paragraph.)
To contact the reporters on this story:
Louise Downing in London at
Ehren Goossens in New York at
To contact the editors responsible for this story:
Reed Landberg at