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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.
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.
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.
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)
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
Im not convinced. It's good that you've rated that pack at 50% depth of discharge (48V x 400Ah = 19kWh nominal, approx 10kWh @ 50% DoD), but typically lead acid packs will only get 1000 cycles at that rate. You typically have to go to a 30% DoD to get 10 years / 3000 cycles.
Lithium can do greater depth of discharge for far more cycles. The overall lifetime costs of lithium per kWh were already starting to beat lead acid, and the new Tesla pack is even better.