Tesla's Household Battery: Costs, Prices, and Tradeoffs

Technologist Ramez Naam (hat tip to Tyler Cowen's "Marginal Revolution" blog) has taken a look at the economics of Tesla's new wall-mounted household battery system, and concludes that it's "almost there," at least for many places in the world -- and seems to already make sense in some. From his analysis: For some parts of the US with time-of-use plans, this battery is right on the edge of being profitable. From a solar storage perspective, for most of the US, where Net Metering exists, this battery isn’t quite cheap enough. But it’s in the right ballpark. And that means a lot. Net Metering plans in the US are filling up. California’s may be full by the end of 2016 or 2017, modulo additional legal changes. That would severely impact the economics of solar. But the Tesla battery hedges against that. In the absence of Net Metering, in an expensive electricity state with lots of sun, the battery would allow solar owners to save power for the evening or night-time hours in a cost effective way. And with another factor of 2 price reduction, it would be a slam dunk economically for solar storage anywhere Net Metering was full, where rates were pushed down excessively, or where such laws didn’t exist. That is also a policy tool in debates with utilities. If they see Net Metering reductions as a tool to slow rooftop solar, they’ll be forced to confront the fact that solar owners with cheap batteries are less dependent on Net Metering. ... And the cost of batteries is plunging fast. Tesla will get that 2x price reduction within 3-5 years, if not faster.

Comments

Not Actually $3500

[sonicmerlin]

I don't know how this guy wrote the entire article without realizing it, but as Tesla explained in a Bloomberg article the cost of the 10 kWh battery's full installation plus inverters is $7100, not $3500, if you buy outright, and $5000 if you lease. It's just way too expensive. Battery tech needs to come down to under $100/kWh to become more mainstream, and solar panels need to drop to about half or even less of what they are now.

Re:Not Actually $3500

[Khyber]

Plus inverters? No. Plus inverter. That pack, if you look at the specs and do some math, is good for a single ~20A 120V circuit, given that it's sustained discharge is ~2kWh and peak is 3kWh. Reality is more like 15A. I wouldn't trust that pack for more than one room of my home. One for each room and multiple for the kitchen given the power drain an electric stove does per burner, be it element, induction, or IR, microwaves, dishwasher, refrigerator...

Time

[rtb61]

Time will alter everything. Reality is, the more batteries produced the cheaper they will become and much more interestingly, the more batteries installed, the fewer people paying for electrical mains infrastructure, the much more expensive per user it becomes. That economic boulder rolling down a hill, faster and faster and faster, inevitable. Tesla still needs to do a complete system, ready to install by franchised installers (ensure quality installs), keep it simple. Not to forget, the Tesla power pack would be a strictly utility device, much like adding air conditioning, or a verandah, it adds capital value to the property. So forget the incumbent PR=B$ about measuring it against electricity charges because that is only part of it's value, it has real capital asset value and that value also needs to be added in, to more effectively compare it what is in affect rent and burn (rent your part of the infrastructure and burn your capital inputs).

Re:Time

[thesupraman]

Honda CTX700 already gets 64 MPG in a reasonably large/comfortable commuter bike.
The Honda GROM 125, which is more compact, is being reported by users at over 100MPG

There is significantly less room for electrics here, since bikes can already quite easily be very efficient, and
the added weight as a percentage of total mass is much higher than a car.

Sure, there is a niche, but thats already pretty well catered for with steppies, and those are often already
around 100MPG at 'city speeds'

Touring/Cruiser/etc bikes dont want electric on the whole (except again in a marketing niche). Harley etal already
intentionally put piss poor engines in their bikes for pure marketing reasons, with horrendous fuel economy, terrible
performance, and horrible weight - because thats what the market demands.

Electric bikes will exist in cities for noise/political reasons, and as a fashion niche, but will not become commonplace
for some time.

Last Sentence... the point of this exercise.

[BenJeremy]

Musk knows that to reduce the cost of EVs, the cost of making batteries has to go down, and the easiest way to do that, AND the best way to build up infrastructure, is to ramp up production.

That's what this is all about - not about making money, at least in the short term. Tesla just needs to have sales drive (and justify) the increase in production, and when the price of making those batteries drop, EV sales will become more attractive to a larger customer base, thus ramping up production more... rinse, lather, repeat.

Re:Backup Generator replacement? Not so much

[Waffle Iron]

OTOH, in a real crisis, that might be the last 20 gallons of gas you get your hands on for a good while. The solar powered system refuels itself.

Re:Price won't come down

[Neil Boekend]

For home batteries the mass doesn't matter that much. Price/kWh is where the ball is at.
Assuming what you say is correct it still is irrelevant for this discussion.

Mass of a lithium atom is approx 7 by the way. You forgot the neutrons for lithium, and they weigh in approximately similarly to the protons. You did count the neutrons for aluminium which is dodgy to say the least.

AFAIK what matters in the end is the weight divided by the number of electrons you can store in an atom. Aluminium can be oxidized to 3+ easily. This comes out to 9 atomic weight per electron.
Lithium can go to +1. This comes out to 7 atomic weight per electron. Still better than aluminium but the gap isn't as big as you claim.