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Tesla's Powerwall Leads the Charge for Self-Powered Homes

by Devin Coldewey /  / Updated  / Source: NBC News

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People have been trying to live off the grid for as long as there had been a grid to leave behind. The latest advance from the electric masterminds at Tesla — a cheap, safe battery called the Powerwall that stores cheap energy for use later — may be just the thing to nudge this community from the fringe towards the mainstream.

Using batteries to power your home, of course, is no innovation in itself. Any off-grid enthusiast (A.K.A. survivalists or doomsday preppers) will tell you that the possibility has existed for decades, but it's a messy, complex project to undertake. Repurposing batteries from golf carts and heavy industry is not just expensive, but risky: they're hard to set up, easy to damage, and dangerous if not maintained properly. Even dedicated consumer systems developed in the last few years have failed on capacity, price or some other factor.

In other words, as Tesla founder Elon Musk summed up the problem at the unveiling of their new device on Thursday: "The issue with existing batteries is that they suck."

Tesla's solution is the Powerwall, a $3,500 battery the size of a tool cabinet that hangs in your basement or garage and stores up to 10 kilowatt-hours of power, enough to keep your home lit up for most of a day or night. It's aimed primarily at people who already have solar panels and can top up the Powerwall with free energy, then rely on that when electricity from the grid is costly or in high demand.

Musk indicated that he hopes, by introducing a simple, cheap and effective product into a convoluted market, he can help set off a sea change in the way power is handled in this country.

Democratization of energy

"Energy storage is very disruptive in the hands of customers like you and me," IDC Energy Insights analyst Marcus Torchia told NBC News. "Utilities are in an unbelievable position to usher in massive change for society's benefit — but right now they're looking for ways to slow down innovation at the edge of the grid."

Storing enough energy to power a house or neighborhood isn't just a survivalist thing. By charging the batteries in off-peak hours when electricity is cheap (or via solar panels) and using that stored power when it's expensive, consumers can bypass rate hikes and save money. While utilities are glad to reduce load at peak times (preventing brownouts that result from everyone running the A/C at once, for instance), they also make money by charging people and businesses for power when demand is highest.

"Because of home solar and these batteries, there's less net demand," Bloomberg analyst Brian Warshay said. Businesses in particular can benefit greatly from battery systems, since staying open during peak hours can drastically increase their energy bills. But until the Powerwall, such systems have been difficult for many to justify. At $3,500, it undercuts the competition by as much as half, and takes only a few minutes to install (though you'll still need professional help).

"The cost of these systems was a huge unknown, hugely variable from one provider to the next," Warshay said. "This is very simple, very easy to understand. And the price point is way lower than we've seen for comparable products."

A step in the right direction

But dreams of going fully off the grid will have to wait. You'd need two or three Powerwalls at least, plus several times the solar capacity most homes have. Right now, Warshay concluded, "it just doesn't make sense."

Musk doesn't intend to make us all self-sufficient with a wave of his hand, of course. This is just step one in a long program, much like how Tesla's Roadster was just the beginning of a much greater effort to overhaul the automobile industry. This time Tesla doesn't want to change the way we drive, but the way we keep the lights on.

Tesla's battery bet

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"There's going to be a natural reluctance, as there is in any industry facing upheaval," said Torchia. "But we're looking at the democratization of power creation and power storage."

What does that mean for your power bill today? Probably not a lot. At least, not until costs come down even further, which Musk suggested will happen when the company's "Gigafactory" battery manufacturing plant comes online in the next few years. And with the cost of solar dropping like a rock and government programs looking to subsidize green energy efforts, the next decade could be the one where you and the grid begin to part ways.

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