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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.
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 $100/kWh to become more mainstream, and solar panels need to drop to about half or even less of what they are now.
Coal is far more cost effective.
Time will alter everything. Reality is, the more batteries produced the cheaper they will become and much more interestingly, the more batteries installed, the fewer people paying for electrical mains infrastructure, the much more expensive per user it becomes. That economic boulder rolling down a hill, faster and faster and faster, inevitable. Tesla still needs to do a complete system, ready to install by franchised installers (ensure quality installs), keep it simple. Not to forget, the Tesla power pack would be a strictly utility device, much like adding air conditioning, or a verandah, it adds capital value to the property. So forget the incumbent PR=B$ 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).
Chaos - everything, everywhere, everywhen
All the discussion I've seen about this Tesla announcement has focused on [1] time-shifting electricity demand and [2] storing electricity from on-site generation. Those are the major uses, no argument. But another one is serving as a whole-house UPS. In some parts of the US (like the NE, where I live), a LOT of people have gasoline or natural gas/propane generators that automatically kick on when the power goes out. Many of these system, which are often as expensive or more so than Tesla's battery system, get pressed into service only a couple of times per year, and then for a couple of hours. A battery system can't replace a generator for long outages, of course, but for short-term issues, this is a non-trivial extra benefit.
Model S battery pack uses 25kg of lithium.
Lithium costs $6/kg. So that 25kg costs $150, or about 0.2% of the cost of a Tesla Model S.
the price of lithium will skyrocket
There are 230 billion tonnes of lithium in the ocean. It can be extracted from seawater for about $20 per kg, with current technology. That is about 3 times the current price, but would still represent only a fraction of 1% of the cost of an electric car, and a modest portion of a home battery system. New technology could push the price of seawater extraction below the current world price. Lithium will not be a bottleneck.
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.
The Sun-vs-Electricity-Price-BNEF-Grid-Parity.jpg image incorrectly puts Australia's electricity rates at around 22c/kWh whereas it's closer to 28c/kWh in most places. This makes the Tesla storage tank even more attractive for them.
Do we get fresh water with that lithium extraction? If so that makes this even more attractive!
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TFA makes much of the Tesla battery as a replacement for backup generators.... at 7kWh, it's equivalent to about 4 hours from a low end generator.
Not anything that's going to replace my Honda and it's 20 gallons of gas any time soon.
Net metering is when you have an energy producer (solar, wind, fuel cell, etc) that can at times produce more power than your house demand. The meter could flow backwards, meaning you are credited for the energy you produce. Some states don't have that, where the meter only spins one way, forward, so any back fed energy is blocked or has to be dumped to a battery or resistive load.
Time of use means you are charged different rates for electricity at different times of the day, as a function of wholesale price fluctuations. This is good and bad, since you lose price security but you can get the most benefit out of conservation.
Mixing the two lets you use a battery to arbitrage the price of energy, where you charge a battery at low prices and discharge at high price times. This works best with wind generation that tends to overproduce at night.
Lead acid batteries are still about half the price per kWh (look near the bottom, at the 48v x 400Ah bank), and come with the same 10 year warranty. Cars care about weight, houses don't.
The new thing here isn't battery storage of solar power, it's lithium-ion batteries instead of lead acid. The price performance for lithium-ion can't compete with lead acid yet, when weight isn't a factor.
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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.
Companies like SolarCity basically install solar systems for no money up front, and then lease them back to you for a period. For many houses, even with these fees, the SolarCity systems will save the homeowner quite a bit of money. Licenses to sell power back to the grid are usually restricted, even in states they are allowed. If you have a battery system installed, you will no longer have to sell your excess solar energy back to the grid. You'll simply be able to store it in your battery for later use. Thus, homeowners with these systems may not have to apply for licenses for their solar systems, since they will not be doing net-metering. This will allow many users to install solar panels who couldn't before. It removes the ability for utilities and/or state governments to restrict the number of homes with solar panels. This is why these batteries will likely have a huge impact.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)
in the ice storm of 1998, we were without power for 10 days. Honda is my friend....
Solar in the ice and snow strikes me as a dicey proposition
Most of Australia experiences Summer temperatures over the maximum operating listed in this specification, and for remote locations this maximum temperature is exceeded every day for weeks on end.
This may be a design issue so a higher specification version could be issued of a physics issue and then it is no go for Aus.
We probably end up with something worse than the sea water that we start out with. Remember, this is cost effective lithium extraction, not the friendly kind.
Do we get fresh water with that lithium extraction?
Desalination plants work with reverse osmosis, which converts seawater to freshwater, with concentrated brine as a by-product. That brine is a better starting point for lithium extraction than seawater, so, yes, they could be co-produced.
But extracting either from seawater does not really make any sense. Some mid-east countries desalinate so they can pursue idiotic schemes to grow wheat in the desert, when they could just buy wheat for far less. California has a few desalination plants, because of dumb policies that vastly inflate the cost of water to urban consumers, while subsiding the delivery of rainwater to farmers growing rice and cotton in the desert.
Likewise, lithium from seawater is not economical, and is unlikely to be so in the foreseeable future. It is better to extract it from salt deposits, or existing brine pools. But the seawater extraction cost is a clear ceiling on the price of lithium, and negates any prediction of a lithium supply crisis.
As of 2015, the total levelized cost of coal is in the ballpark of solar/wind. (Levelized cost includes capital costs, but does not include pollution costs -- consider how cheap coal is that we count the cost of medical bills, let alone AGW.) In a few decades, it will be cheaper to use renewables than mine coal to run an existing coal plant. Notice how fast Kodak went out of business? That is what the coal industry is staring down.
Like all pain, suffering is a signal that something isn't right
Now the maximum temperature for the majority of Australian households in summer rarely if ever reaches or exceeds that. There is a large amount of the continent where the temperature exceeds that - however its very sparsely populated (you are looking at the central deserts after all) and has minimal infrastructure anyway.
For the majority of the population (i.e. major population centres on the coast) it's quite reasonable.
IF you put this in line with your generator, the generator doesn't need to run as often and doesn't have to ramp to follow load -- it can run at it's peak efficiency. Having this in your house with make that 20 gallons of gas go as far as 40 without it. The military has figured this out and are starting to battery buffer their generators at Forward Operating Bases -- fuel convoys are the most ran convoy, so reducing those by half really reduces attacks and the logistics train.
So I'm looking at the lithium price and I see that for $64M I can make a plant/mine which will give me $8M/year profit, and ROI of 12.5%. This looks pretty good. Then I consider than some bright spark might come up with an aluminium based battery technology which would make lithium ion batteries obsolete and could be in production 4 years from now. If this were to happen, in four years I've made back just $32M and now have a worthless mine. Therefore I decide not to invest in lithium production until I can get ROI of 20% because of the risk.
It seems to me that lithium is bound to be either overproduced (if new technology comes along) or underproduced (if new technology does not, but investors are wary of building facilities for fear it might.)
Quattuor res in hoc mundo sanctae sunt: libri, liberi, libertas et liberalitas.
I woulda had first post, but its dark out and I dont have a tesla battery yet to store my solar power :(
have you seen my sig? there are many others like it but none that are the same
If only there were something that melts snow.
What could do that?
Why don't you crawl up on my roof during the next howling snowstorm and demonstrate your snow melting technique for us? We'll simulate a power outage to make it realistic so the will be no outdoor lighting to help you. Have fun with that.
I'm working on technology to extract lithium from Courtney Love
I would like to know why you think aluminum would make lithium obsolete ? Aluminum is more common and thus cheaper but everything I've read suggests it would be far worse as a battery source. What makes lithium such a good basis for a battery is that it has an atomic weight of just 3. It's the lightest natural metal on the periodic table. With such a small atomic weight - it's density is immense, you can pack a gazillion lithium atoms in a tiny volume. In fact the only things that you can pack more off in the same volume are helium (inert and so useless for batteries) and hydrogen (likewise not useful for batteries - at least the kinds we know now, and with a tendency to explode).
Lithium is metallic, highly reactive and incredibly dense. The more atoms you can pack, the more ions you have, the more charge your battery can hold without having to get bigger.
Aluminum has an atomic weight of 27 (rounded up for simplicity). Or to put it otherwise - to build an aluminum battery with the same charge-holding capacity as my cellphone it would have to weight 9 times as much or one the same size would run down in a 9th of the time.
The only potential I see for an advantage beside cost is that aluminum has a very low electrical resistance (topped pretty much only by gold) - but I doubt this is sufficient to compensate for the massive increase in mass.
Please do enlighten me, I'm not being sarcastic - but why do you believe aluminum would top lithium other than "we have LOTS of it, so much we can waste it making holders for soft drinks" ?
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Yeah that that would deprive all the fish from their antidepressant. They'd commit mass suicide.
Well, I might have a way, but it only works on a semi spherical planet in a vacuum.
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.
Well, I might have a way, but it only works on a semi spherical planet in a vacuum.
There are plenty of companies on the market that sell the entire systems with either VRLA and flooded cells, including the hook up and the inverter. Which is profitable not only because lead-acid absolutely destroys everything else in the market when you care about cost, capacity and safety but not weight, but also because control electronics for lead-acid are much cheaper than those needed for li-ion.
gazillion lithium atoms......tiny volume.
Gaahhh, why does everyone always have to mix units?! Its either bajillion atoms/tiny volume or gazillion atoms/minute volume. Standards people, use them.
Want to run a 24V DC "RV electrical system / yacht electrical system" from a DC sub-panel in my house running efficient DC fridge, LED lights, small inverter for laptops etc, and maybe a larger inverter for a diversion load in summer.
Also, our PV modules on our roof need to be entirely in parallel because lots of partial-array shading at various times of day.
So our input voltage range (to batteries) will be around 30V and the output should be 24V DC.
Anyone seen the spec. for input voltage range for the Tesla Powerwall?
Also, anyone know where one can get a 400V to 24V efficient and safe DC/DC converter for the output side of the Powerwall?
Where are we going and why are we in a handbasket?