Elon Musk unveils new Tesla Energy division

Posted on 6 May 2015 by Michael Cruickshank

Billionaire industrialist Elon Musk last week unveiled plans for a new division of Tesla Motors.

Named Tesla Energy, the division will manufacture battery-based energy storage solutions rather than cars.

“The obvious problem with solar power is that the sun doesn’t shine at night,” Tesla founder and CEO, Elon Musk, said in a press conference. “We need to store the energy to use at night.”

This being said, he also added that “the issue with existing batteries is they suck.”

In order to fix this, Tesla Energy intends to sell several products based on the Lithium battery technology used in its electric vehicles.

The plan involves moving the company’s battery technology into homes and businesses to help reshape the power grid and utilising millions of solar panels installed on building roofs.

Musk told reporters in attendance said the new battery technology would signal a change in energy use.

“Our goal here is to fundamentally change the way the world uses energy,” he said.

A Tesla Energy Powerwall charges a Tesla vehicle. Image courtesy of Tesla.
A Tesla Energy Powerwall charges a Tesla vehicle. Image courtesy of Tesla.

The first and most attention-grabbing of the new products is called the ‘Tesla Powerwall’. This device functions as an energy storage system for residential homes, enabling them to store solar power through the night, and in many cases go completely off the grid.

In addition, the Powerwall can easily be fitted to the inside or outside of houses as well as garages, where it can be used to charge Tesla vehicles.

The Powerwall will come in two variants, one with 7 kwh for $3,000, and another with 10 kwh for $3,500.

The other product being produced by Tesla Energy is what Musk is calling ‘Powerpacks’. These are battery packs which are intended to provide power for commercial and industrial uses.

Designed to be scalable, these Powerpacks come in 100 kwh blocks, which can scale up to provide megawatts of power storage, making them feasible for utility companies.

Trials for both the Powerwall and the Powerpacks have already been underway in secret for several months.

Share price soars

While last Thursday was the official unveiling of Tesla Energy, it been a rather poorly kept secret with Musk dropping many hints on social media.

As such, Tesla’s share price has increased by almost 20% over the past three weeks.

This being said, many concerns remain regarding Tesla’s ability to produce enough batteries to meet demand, even with its newly planned battery ‘Gigafactory’. Furthermore, other commentators have argued that advances in battery technology may supersede Tesla’s lithium technology and render the new factory obsolete.

Edison announce applications for the Tesla technology

Following the announcement from Tesla, Edison International announced it had established commercial agreements with Tesla as part of the launch of the new line of Tesla Energy products.

Southern California-based, Edison, the regulated utility subsidiary of Edison International, and SoCore Energy, a subsidiary of Edison Energy that provides rooftop solar systems, plan to implement energy storage projects that feature Tesla Powerpacks.

“We are excited to work with a cutting-edge company like Tesla to help create a market for battery storage systems,” said Ron Litzinger, executive vice president of Edison International and president of Edison Energy. “The ability to store energy in batteries by both residential and commercial customers is key to expanding the nation’s use of clean renewable power.”

“This is an important, industry-changing development for the future of solar power,” said Pete Kadens, president of SoCore Energy. “We look forward to working with Tesla to bring battery storage technology to our customers.”

SCE is working with Tesla on two demonstration projects that can help reduce the cost of battery storage systems for residential and business customers. These demand response demonstration projects will test communication capabilities and explore rebates to customers who allow SCE to manage their battery charging in order to increase the use of renewable energy while ensuring continued grid reliability.

The first demonstration project is related to residential customers, targeting homeowners in SCE’s service territory who have solar panels already installed with battery storage capability. The second demonstration project focuses on commercial and industrial customers who require a larger energy storage capacity. These two projects are expected to be in place and operational in 2015.

Separately, SoCore Energy is working with Cinemark to design and install Tesla batteries at two of its theatre properties in Southern California.

Cinemark theatres in Lancaster and Orange will feature Tesla battery units that will be charged with electricity from the grid during non-peak hours at night. The battery system at the Lancaster site will be able to store up to 800 kilowatt-hours, while the Orange site will have a capacity of 1,200 kilowatt-hours, for use during peak periods.