April 30, 2015
Tesla Announces Home Battery Packs

Tesla has announced home battery packs. They can be used for shifting home PV electric power usage from day to night and also to lessen the impacts of grid outages.

If your utility is willing to sell you electric power at discount at night and for a higher price in the day then home batteries might pay themselves back in electric power costs reduced.

One version of the Tesla home battery will cost $3500 for 10 kwh plus installation costs. Lets put that in perspective. 10 kwh is about a third of an average US home's daily electric power usage.

In 2013, the average annual electricity consumption for a U.S. residential utility customer was 10,908 kilowatthours (kWh), an average of 909 kWh per month. Louisiana had the highest annual consumption at 15,270 kWh, and Hawaii had the lowest at 6,176 kWh.

Suppose you want to run your home for 2 days during a power outage. You are looking at a number north of $20k for enough Tesla batteries to get you through the 2 days without a lifestyle change. Of course, you could stretch the electric power longer by foregoing home vacuuming, TV watching, and other optional activities. Better to keep the fridge and freezer cold than clean the carpet.

If you have enough solar panels to power your home every day then you could get by on lower battery capacity and have only enough batteries to get you through the night. But in the winter the days are short and the battery discharging nights are quite long.

Musk thinks with enough installed batteries we could switch to solar and wind coupled with home and business battery power storage.

Musk even had some numbers for what would be required. To transition the US to use renewable energy, you would need 160 million PowerPacks (the 100-kWh models) that could accept green energy when its made and deliver it when needed.

If battery and PV panel prices keep dropping then the financial position of electric power utilities could be threatened, especially in areas with high electric power prices and lots of sunshine. Southern California comes to mind.

Share |      Randall Parker, 2015 April 30 10:21 PM 


Comments
Wolf-Dog said at May 1, 2015 3:43 AM:

Battery storage is great, but for home or utility scale storage, heavier and bulkier but much cheaper than lithium-ion batteries would be more economical. It is possible that Elon Musk wants to put his new gigafactory (that will be manufacturing lithium-ion batteries) to work as soon as possible, so that he can make some extra money from storage batteries made of the same lithium-ion cells, while his electric vehicle business starts mass-producing the cheaper $35,000 in a few years.

On the other hand, the prices of lithium-ion batteries are declining steadily, thanks to improvements in manufacturing:

http://www.wfs.org/blogs/len-rosen/falling-battery-prices-making-electric-vehicles-more-mainstream

Falling Battery Prices Making Electric Vehicles More Mainstream
April 3, 2015 - A new study by the Stockholm Environment Institute appearing in the journal Nature Climate Change traces the cost of lithium-ion battery packs for electric vehicles (EVs) showing an average decline of 14% annually between 2007 and 2014. The net reduction in terms of energy produced is equivalent to a drop from $1,000 U.S. per kilowatt-hour to $410. Industry leading EV manufacturers are besting that $410 average hitting a cost of $300.
As these costs per unit of energy produced decline it is clear that EVs are about to cross a threshold making them more attractive to mainstream purchasers. That threshold the industry has commonly agreed on is below the $300 per kilowatt-hour energy mark. Current lithium-ion battery pack costs are declining at a rate of 8% per year. Researchers predict lithium-ion batteries are on track to reach $230 per kilowatt-hour by 2018, and $167 by 2025. With Tesla building a new gigafactory and Nissan ramping its own large-scale battery production (the image below is of the battery pack in the Nissan Leaf) the 8% rate of price decline versus performance may further accelerate.
EV batteries today can be half the cost of the car. But as the batteries get more powerful two outcomes are foreseen. The first is EVs with current mileage ranges will get far cheaper and become an attractive option for urban drivers. The second is manufacturers will be able to pack more power into EVs to extend their range creating a premium product for both city and extended highway driving. For these premium extended range EVs, capable of achieving up to 480 kilometers (300 miles) in a single drive, the cost of a full charge based on current electricity costs would be less than $10 U.S. That's far less than a tank of gasoline or diesel even in these oil-price depressed times.

And this is without even taking into account new types of batteries that are not yet established. By 2040 EV batteries might cost $50 per kWh, and at that point a 300 mile electric car might cost less than $15,000.

Engineer-Poet said at May 2, 2015 6:33 AM:

Let's do a BOTE analysis.  Musk's battery costs $350/kWh.  The USA takes about 450 GW (450 million kW) average, so 2 days of storage is 4.5e8 kW * 4.8e1 hrs = 2.2e10 kWh, or almost $8 trillion.

That is in excess of 1/3 of the US national debt.  That's not the cost of generating energy, it's just the cost of storing it.  In other words, this is a non-starter.

$8 trillion invested in AP1000s at $6000/kW would yield about 1.3 TW of generating capacity, which would be sufficient to fully electrify almost everything in the US economy.

Randall Parker said at May 2, 2015 10:03 AM:

E-P,

I think his value proposition involves buying cheaper electric power at night to use during the day. But if you happen to live in an area with really cheap electric power then I doubt it will pay back. If you happen to live in SoCal and your utility charges you a lot during the day and not much at night then might it make sense? Or might solar panels (which have dropped a lot in price) make more sense?

The solar panels will give you electric power closer to the time of your peak electric demand.

One thing that has struck me about peak demand: A smart house can shift demand. Turn on the dishwasher when the solar panels are getting a lot of sun at 11 AM. Super cool the house before you get home and while the summer sun is still shining. Super cool the freezer too and let the freezer cool the refrigerator main compartment later.

So I suspect solar photovoltaics combined with a smart house is a better value proposition. Though evening demand for cooking, TV watching, and other uses is still a problem.

One unsolved problem that a robot would help with: When to wash and dry clothes? If you've got PV then probably at mid day while you are at work. But how to move the clothes from washer to dryer to hanger? A wash room robot. Then clothes get done when you are not around and can be done when electric power is cheapest.

Randall Parker said at May 2, 2015 10:26 AM:

E-P,

Ramez Naam says the Tesla Powerwall will not pay its cost back in the USA, even in SoCal. The picture he paints still seems overly optimistic for its future prospects. The price would need to fall well below a third of its current cost to make sense for most Americans and solar power's cost would have to fall far as well to make the combined cost make sense as a power provider after the sun goes down.

I go back to my point that smart homes combined with PV have better prospects. It is cheaper to shift the demand to when the power is cheaper than to shift the power to when the demand is highest.

Wolf-Dog said at May 2, 2015 11:57 AM:

E-P,

In your calculations above, so much storage for the entire USA is not needed full time for 48 hours Probably a significantly smaller fraction will suffice. Also, the current $350 per kWh will decline significantly in the future. By 2040, lithium-ion batteries will probably cost $50 per kWh. And separately, some bulky and heavy non-lithium-ion batteries are very cheap and even though these are acceptable for utility and home storage applications even though they cannot be used for electric cars. Separately, the PV panels will become dirt-cheap, mitigating the cost of storage.

It seems that Musk is trying to make some extra money from his new gigafactory that will be producing lithium-ion batteries.

David H Dennis said at May 2, 2015 12:30 PM:

Randall, right now you can get a combo washer/dryer unit, mainly used for boats and RVs. If you could scale that up for household use, it might make a lot of sense. It would certainly be a lot easier than developing a robot.

I think those units are less effective than traditional machines and take much more time, but if laundry is done when the house is empty it might work just fine ....

Engineer-Poet said at May 2, 2015 1:24 PM:

Wolf-Dog, RE can take partial vacations for much more than 2 days; 5 days of 40% deficit requires 2 days of storage, and there aren't many places outside of deserts that don't see stretches of 5 cloudy days quite often.  2 days of storage is considered a small amount by people who live off-grid.

Wolf-Dog said at May 2, 2015 2:42 PM:

E-P,

Four questions then:

1) Cloudy days in average, it might still be less than 2 days, and the grid will still exist in the form of copper and superconducting cables, and power can be borrowed from the houses and utilities that have stored electricity in neighboring cities and even states.

2) When it looks like the weather will be very bad, then the utility companies can revive the natural gas fired plants and start sending some power to batteries to top them up. At any given time, a small buffer number of gas turbines may be on standby or even running. This way borrowing from neighboring states may be easier too.

3) And most importantly, how about the bulky, heavy but very cheap non-lithium-ion batteries that all utilities many houses might use instead of ev-grade lithium-ion batteries proposed by Tesla?

4) When the price of batteries declines to $50 per kWh by 2040, combined with dirt-cheap PV panels at that time, then storage will be much more reasonable. (I don't think that Musk is aiming at the immediate mass-adoption of storage batteries. He almost surely expects this to happen in 25 years. So far Musk is just trying to set a trend like he did with the expensive Model S that is only for the wealthy elite. He is also looking for an excuse to make some money from his new gigafactory that will be for ev-grade lithium-ion batteries that utility companies can do without by choosing heavy but cheap storage batteries.)

Randall Parker said at May 2, 2015 2:55 PM:

David,

But how to get the clothes out of the dryer onto hangers so they don't get wrinkly before you arrive home?

Wolf-Dog,

If you are going to use battery power to be able to withstand long power outages that's really really expensive. You are better off using a smaller amount of batteries but with solar panels. However, then you'd need to way overbuild the solar panels in order to get enough solar power even in the cloudiest December.

Self sufficiency is very expensive. Using batteries to demand shift is not warranted by current electric power pricing. In Hawaii too much solar power has been installed to allow buy-backs by the state power utility. This is going to becone a problem in other states too and an even bigger problem in Hawaii. The price of power has to become flexible with great variations within and between days because supply and demand are becoming too uncoupled.

Engineer-Poet said at May 3, 2015 4:04 AM:

Wolf-Dog, your hand-waving is pure Green propaganda.  Do you seriously think that your solar-powered neighbor is going to be in any less of a deficit than you are when the clouds roll in... or the rest of the state, for that matter?

Greens are hailing the "utility death spiral", meaning the END of the grid and all its generators.  Your superconducting long lines have no place in a PV/battery world.  Not even the backup gas turbines would exist; the revenues to pay for them and the distribution network would long since have disappeared.

What this would mean is that everyone would be captive customers of the natural-gas industry, or trucked-in liquid fuels if they weren't so lucky.

Brett Bellmore said at May 3, 2015 6:43 AM:

Yeah, you'd have to completely change the pricing structure for electric utilities, and in a way greens would fanatically oppose, for the grid to still exist in the form of copper and superconducting cables". The Green model for the utilities is that they be forced to act as uncompensated 'batteries', dumping the cost on anybody who doesn't use solar or windmills, until the cost of electricity goes so high nobody can afford to avoid generating their own.

A pricing model that makes the utilities viable makes it too obvious that 'renewable' sources are uneconomic.

They mean for the utilities to die, not continue in another form. That this would destroy the economy is a plus, they're trying to force the vast majority of the human population to revert to a hunter-gatherer lifestyle, and don't care that this involves more than 90% of the human race dying off.

The genocidal implications of green ideology are barely disguised. They'll often openly talk about huge reductions of human population.

Light said at May 3, 2015 6:47 AM:

Randall - Most refrigerators only cool the freezer with an evaporator and then push cold air to the refer compartment.

Hawaii is having more of a problem dealing with their antiquated power grid and switching equipment than it is with the payback. Wide swings in power generation from intermittent cloud cover is hard for them to deal with using a pre-1950s grid. Hawaii's power generation is mostly diesel turbines, but when a cloud can cover a school at noon that was just generating 200KW, that's quite a variance. In fact, HECO never pays the customer for a single KWH of power. You are only allowed to discount your bill with net metering, not actually receive a check.

If this battery system were used in Hawaii, it would likely be used in direct conjunction with solar. This battery pack (or rather a few of them), would be able to cover the average Hawaii resident's power consumption. In a place where a 400KWH bill costs nearly $200, this would be huge and allow residents to continue installing Solar Power at their discretion, but without net metering to circumvent restrictions.

Randall Parker said at May 3, 2015 7:11 PM:

Light,

Full off grid with PV and batteries would be incredibly expensive. A single Tesla unit can't meet the peak needs of a house. So you'd need to get multiple of them. How many would depend on your house. But the more you get the less likely you are going to 100% full cycle each one each day. That drives up your cost per kwh used. You end up needing more PV than you use per day to get enough electric power on a sunny day to tide you over on cloudy days. You also then need more battery power than the amount of power you need per average day, both for peak consumption days and low sunshine days.

The 35 cents per kwh cost of electric power in Hawaii is almost 3 times the national average. But trying to go totally off-grid would cost more than that. Maybe in 5 years PV+Tesla battery sufficient to go off-grid will be a good economic deal. But today the only justification I can see for the battery is to reduce your vulnerability to grid outages.

Brett Bellmore,

The electric utility regulators are going to cut the price of buy-back electric power tariffs and they'll also allow utilities to pay different prices per time of day based on supply and demand. The declining cost of PV makes that essential.

Ronald Brak said at May 27, 2015 5:29 PM:

In Australia, at its current price, the 7 kilowatt-hour Tesla Powerwall which is designed to be cycled everyday can potentially pay for itself in four out of our six states when used for on-grid home energy storage. This is due to our high retail electricity prices, the existance of time of use tariffs that charge different rates depending on the time of day, and our minimal feed-in tariffs for new rooftop solar. It is also a big plus for off-grid use. This is not because it provides more storage or power output per dollar compared to the lead-acid batteries that are currently used, but because its 10 year warranty knocks the one or two year warranty that is available for lead-acids into a cocked hat. Currently I'm sitting in an area where households and businesses may receive subsidies to install energy storage because rapid population growth has caused the transmission capacity to start to max out in the evening in summer after rooftop solar production falls off. (I haven't counted, but probably at least half the houses in this street have rooftop solar.) The Powerwall is too large for most Australian households to use at high capacity, 2 or 3 kilowatt-hours could allow for a much faster payback time for most people, but there are still a considerable number of households here who will find it, or a similar product from a Tesla competitor, to be a very worthwhile investment.

Nick G said at June 4, 2015 11:14 AM:

A few thoughts:

Seasonal lulls in wind and solar production are not well handled with chemical batteries. Everyone serious about this topic knows this. In particular, Germany is not planning on enormous batteries for winter lulls. They're going to use "wind-gas": methane synthesized with surplus wind-power.

Similarly, no one thinks that batteries make sense for 100% of power consumption for someone who's off-grid. Seasonal lulls are best handled by an inexpensive diesel generator.

Tesla doesn't intend the Powerwall for day-night arbitrage, or for residential use in the US' lower 48 states. It's intended primarily for use as a big UPS, for commercial customers, and for residential customers outside the US, who often use diesel for much of their daily power.

Whenever someone talks about monolithic groups in pejorative terms (like "greens"), it's a sign that good thinking has ceased. In this case, to attribute the ideas of a small minority to many others with disparate ideas is unrealistic: very, very few environmentalists want to destroy the grid, or become hunter-gathers.

Net-metering is clearly unsustainable in the long run, in it's current form. That doesn't mean it's a bad idea, just that it needs to be modified as we go. In it's current form, it's a convenient way to account for the external costs of pollution. Clearly, a carbon tax would be much, much better, but fossil fuel industries have blocked this idea with enormous determination.

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