Tesla Launches Energy Division to Disrupt Home Energy Usage

by Jörgen Eriksson on May 1, 2015

tesla-powerwallElon Musk has hinted for years that Tesla really is about disruption through new battery technology, and today the corporation launched an energy division, Tesla Energy. After years of speculation, Tesla announced a series of battery systems for homes, utilities, and businesses, and the batteries are all under the umbrella of the new division.

Elon Musk has a vision of a world powered entirely with renewable energy and sleek-looking batteries built by Tesla. The new divisions first product, Powerwall, is a home battery that charges using electricity generated from solar panels, or in daytime and night when utility rates are low, and powers your home in the evenings. It also fortifies your home against power outages by providing a backup electricity supply. The idea with Powerwall is to offer independence from the utility grid and the security of an emergency backup.

Charging devicesAt night we connect recharging wires to our phones, computers, smartwatches and tablets to recharge after the workday and with many electricity utilities the rates are higher during peak time.

As we recharge devices and turn on lights, home energy usage reaches peak consumption. Tesla says its Powerwall battery system can untether homes from the power grid for a few hours, which might not sound like much, but could have huge implications for both household energy costs and for CO2 pollution, as utilities dimension their output by burning carbon fuel for peak time.

Tesla’s move into so-called "stationary storage" is a market with enormous growth potential. As the world slowly moves away from fossil fuels, it is seen as critical to a more widespread adoption of "clean" energy sources like solar and wind. There is also a strong commercial rationale for Elon Musk to leverage Tesla’s expertise in building highly-efficient car batteries and also put them in a single unit in consumers’ residences.

The business strategy is a bit like the battery itself. High impact, but a slow release which will really only reap significant benefits over time. But it comes with risks. Tesla may face a challenge getting the cost-saving message across to potential customers, with a significant $3,500 upfront cost to buy and install the device in existing homes. The batteries are quite massive in size. Look at the picture below with a Powerwall battery next to a Tesla car.

Powerwall battery

SolarCity, a US leader in full-service solar power systems for homes, businesses and governments co-founded and financed by Elon Musk, has announced that it will offer the Powerwall to its existing and new customers and that it will work with the company’s DemandLogic energy-storage system for businesses and government institutions.

Below is the 20 minutes launch video, where Elon Musk introduces Tesla Energy.

Elon Musk–Announcement of Tesla Energy

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