Tesla Motors next week will announce two battery lines, one for households and another for utilities, that will store power from renewable sources, such as solar and wind, supplementing them when the sun goes down or the weather changes.
Late last month, Tesla CEO Elon Musk tweeted that he planned to announce a "major new Tesla product line" that isn't a car.
The announcement, he said, would take place at his company's Hawthorne Design Studio in Hawthorne, California, at 8 p.m. April 30.
Yesterday, analysts and investors received an email from Jeffrey Evanson, Tesla's head of investor relations, stating that the battery line will include one for homeowners and another for utilities. He said Musk would "explain the advantages of our solutions and why past battery options were not compelling."
"I do believe that Tesla has an opportunity to successfully communicate and market the concept and potentially the product of a home battery more successfully than others since Tesla has positioned itself as a company that defines new product categories," said Thilo Koslowski, vice president of automotive research at Gartner.
Solar installations have skyrocketed over the past several years. Within 15 years, solar energy is expected to be a dominant energy source, competing with traditional coal-fired power, according to a report from Deutsche Bank.
Along with Tesla, Musk is also chairman of SolarCity, the largest provider of residential solar systems in the U.S., which controls 30% to 40% of the U.S. market, according to Jeffrey Osborn, an analyst with investment banking firm the Cowen's Group.
"We have the design done, and it should start going into production probably about six months or so. We probably got a date to have sort of a product unveiling, it's probably in the next month or two. It's really great. I'm really excited about it," Musk said during an earnings call earlier this year.
While Tesla already produces batteries for its all-electric vehicles, Musk said the company will also mass produce the household batteries in a $5 billion lithium-ion battery factory project. Musk has already chosen Nevada as the site of the first of the battery factories.
The company is piloting its consumer batteries in 330 homes, mainly in California. The batteries, which were displayed at a battery conference last year, hold 10 kilowatt hours (KWH) of electricity. The average U.S. household uses about 900KWH of electricity per month, according to the U.S. Energy Information Administration.
The lithium-ion batteries would be used to store up solar power generated during daylight hours, and then could be used to power a home at night or inclement weather. Tesla's home batteries, which are 2.5-feet wide and 3 feet tall, have a starting retail price of $13,000. However, state energy efficiency rebates can cut that cost in half. Tesla also showed off a 400KWH battery for businesses.
As battery technology evolves, it could pave the way to cost effectively store both wind and solar-generated energy and connect to electrical power grids. The technology also could be used by businesses and homes, which could virtually remain off the power grid except in emergencies. The grid, essentially, would be the backup.
Tesla is far from being the only company entering the energy storage market. Last year, SolarEdge Technologies and Enphase both announced plans to bring a home battery to their solar power management systems.
Enphase's lithium-ion battery, which will be produced by Japanese-based ELIIY Power, is expected to be available in the second half of this year.
Earlier this month, SunEdison announced its buyout of battery maker Solar Grid Storage. In December, SunPower Corp., the second-largest U.S. solar panel manufacturer, announced a partnership with privately held Sunverge Energy to sell its Sunverge Solar Integration System, a distributed energy storage system that combines batteries, power electronics and multiple energy inputs in an appliance controlled by software running in the cloud.
As part of the Enphase's battery rollout, it has partnered with several solar panel installation companies for pilot projects, including Vivint Solar, the second-largest public residential solar company in the U.S.
Greg Butterfield, CEO of Utah-based Vivint Solar, said the company plans to partner with multiple battery suppliers to fulfill customer needs. Battery storage systems, Butterfield said, equate to energy independence for consumers.
While Vivint competes with SolarCity, Butterfield sees Tesla's entry into the distributed battery systems market as beneficial to everyone, consumers and solar panel distributors alike.
"It's a positive thing. Anything they do that advances the industry is in the collective best interests of not only every consumer, but also Vivint Solar," he said.
In fact, consumers in Hawaii and California are likely months away from having their solar power providers offer home battery storage solutions "where it's financially feasible," Butterfield said.
And, at the most, he continued, the consumer industry as a whole in the U.S. is only five years away from being able to provide homeowners in every state with energy storage systems "to get off the grid ... and have the ability to have less dependence on traditional utility companies."
"Battery power and storage is key to the overall technology roadmap for any solar company that will be successful," Butterfield said.
"Storage is going to be a multibillion dollar market and will be essential in helping solar gain broader acceptance and higher penetration," said Raghu Belur, co-founder and vice president of products and strategic initiatives at Enphase.
This year, Panasonic penned a deal with Tesla to help build the Gigafactory, which it hopes will produce half a million electric-vehicle batteries per year.
Reducing the cost of the batteries with economies of scale will be crucial to lowering the prices of its cars, Tesla has said.
By Tesla's own estimates, the project to build a battery factory is expected to drive down the per-kilowatt cost of its own lithium-ion batteries by more than 30% in the first year of production. The factory is expected to open in 2017.
By 2020, Tesla believes its Gigafactory will produce more lithium-ion batteries in one year than were produced worldwide in 2013.
"Tesla can also leverage an existing customer base -- its vehicle owners -- to highlight the benefits of a potential home battery since these customers already have positive experiences with large batteries," Gartner's Koslowski said. "That's a big deal since newcomers would start from scratch and would have to first establish customer trust."
This story, "Tesla to announce home and utility-scale batteries that offer energy independence" was originally published by Computerworld.