Tesla’s Powerwall is just another toy for rich green people

“All the breathless coverage of Elon Musk’s Powerwall battery brouhaha last night is missing the most important thing: a sober discussion of real-world costs,” Christopher Helman writes for Forbes. “So let’s take a look at the costs and see if this world-shaking, game-changing innovation really makes any sense.”

“Musk said Tesla’s 7 kwh capacity battery would cost $3,000, while the 10 kwh capacity one would be $3,500. (That doesn’t include the cost of an AC-DC inverter – about $4,000 — plus professional installation),” Helman writes. “The implication is that a 10 kwh system could supply 1,000 watts of current to your home for 10 hours… So how much is that battery power going to cost? Setting aside for a moment the cost of making that electricity in the first place, let’s look at just the cost of using the battery to store it and get it out again. Researcher Winfried Hoffman, the former CTO of Applied Materials AMAT +1.62%, has done some interesting work on the falling costs of battery power. He figures that for a lithium-ion system with an initial installation cost of $400 per kwh capacity, 80% efficiency and ability to run 5,000 cycles, the average cost of stored electricity will be 15 cents per kwh.”

“To get your real electricity cost, you have to add to that 15 cent battery charge whatever you’re paying for that electricity in the first place… Adding together your 15 cents per kwh for solar power plus the 15 cents to cycle a kwh in and out of the battery, and you’re looking at 30 cents per kwh for electricity. I think 30 cents per kwh is bonkers. At my home in Texas I pay 10 cents per kwh to Reliant Energy for electricity that is mostly generated by natural gas burning power plants,” Helman writes. “Unless your solar-powered home is entirely disconnected from the grid, an expensive battery backup system like Powerwall does not make economic sense.”

Read more in the full article here.

MacDailyNews Take: So, who’s buying a Tesla Powerwall unit?

Related article:
Tesla CEO Elon Musk reveals Powerwall home battery – May 1, 2015

60 Comments

  1. The article completely overlooks is the potential to hook up the Powerwall to exercise equipment. This could be of tremendous benefit to families with hyperactive children on sugary diets.

    1. We have similar length power outages in western Washington and solar is really not a great option up here. But, if I lived in AZ, TX or CA I would maybe consider it.

      A whole house generator is basically what is needed up here, which I have and it runs on propane. When the power goes out for multiple days, I’m good. I should check to make sure my generator is hooked up to charge our Chevy Volt. It may not be as nice as a Tesla (but way less expensive) but damn I love that car. We save about $400 a month in gas and our power company paid for our Bosch charger. Wahoo!

    2. WOW I’m shocked how many people are missing the point. This is filling a real void for people who want to exist the heavily polluting power grid. Solar has issues because of overcast days and nights. Wind has issues because of calm days. The perfect system is solar + wind feeding one power source (something like Musks system). When it overcast there is usually wind. When it hot and sunny usually calm winds. It is rare to go more than 10 hours without either wind or sun. This will be a boon for folks who really want to get off the grid.

    3. Aaaaand, that’s ten hours of acting like a super-indulged westerner… long baths, washing clothes…. acting like nothing has changed.
      1000 watts for ten hours!!! If you immediately get more frugal, it’s going to last a lot more than ten hours.
      Aaaaaand, see what OpJ says.

  2. I realise this isn’t the main purpose, but what is the cost of a backup generator and generator produced electricity? Perhaps that’s the idea? Not only does it store energy during down times and then provide that during peak periods, but could also be a back-up system during storms etc. Plus, whilst energy in Texas in 10c/kWh, it’s 16c/kWh in Ontario Canada. So, still not economical, but are we not expecting the price of this system to decrease with time, and the price of power to increase with time?

    1. My whole house standby generator 12kw propane by GE cost under $4000 installed.

      The Musk will cost more and last only half a day for typical power usage.

      I don’t have peak/non-peak energy pricing, so there’s no advantage there as well. Nor do I get any state subsidies to install a solar panel, so, the bottom line is that this option doesn’t work for me, but I’m glad there’s another choice. It’ll probably suit California and Hawaii.

    2. Not economical? Electricity in Ontario is .14c/kWh at the highest price and .07 at the lowest. The PowerWall will be charging at the lowest price and in many cases off Solar. Also rich people now and businesses will be buying this product but just like the Tesla Model S the prices will come down when the Giga factory comes on line in 2018. Yes I will be buying one at that time.

  3. Doesn’t look as a toy.

    Yes, for sure, at first only rich people will be able to buy one. But on the long run, it has tremendous potential.

    1. Yeah, how dare those “rich green people” put their money where their mouth is to potentiate the growth of a technology!!

      What, do they believe in capitalism?!?!

    2. I truly don’t understand all this “only rich people” talk.

      Has anyone else realized that for a LOT of people, you could buy a Powerwall just by swapping your twice-weekly wine indulgence with dinner for a glass of beer or water (for a year or so)? I know a number of middle class couples who easily blow $100 a week on idiotic $16 wine or mixed drinks on a regular basis.

      Or just drop cable TV for a couple of years?

      Or simply keep your car ONE extra year versus trading in on a new one (and that’s assuming only a $350/year car payment)?

      This is not a “rich people’s toy”….but the average American is too intent on wasting their money in other ways, and unwilling to cut back to get something useful…and that could actually save them money in some cases.

  4. I think the cost of a solar cell, battery and invertor will set you back around $10,000. That’s just to collect and store the power locally. If you want to hook into your local grid there could be additional costs,

      1. I believe you are correct. Great concept – and I’d love to do it – but I’ll stick with early adoption of my Watch, which I was just notified, will be here Monday 👍⌚️😉⌚️😄😎

            1. I ordered my at 12:04 AM EST using the Apple Store app on my iPhone. From there I elected to receive shipment notification. I ordered the ubiquitous black sport with black band.

              It’s funny, because I’d checked my account around noon EST and it was still “Processing” and I got a bit impatient-er.

              A half-hour later, for whatever silly reason, I checked again and the watch was now “Shipping”! Maybe 20 minutes after that I got a notification on my iPhone that the watch had shipped! I checked the account and saw that it was shipping form a location only 3 hours from me which means I’m getting it Monday afternoon.

              I’d expect you’ll see more people getting theirs if they were in the 12:04-12:10 AM EST timeframe (that’s my guess).

    1. True. The products and technology will improve with enough time.

      On the other hand, what about reduced battery capacity for the products people buy today? After X charge/discharge cycles, what’s the capacity? Someone who’s getting 10 hours today, might only get 3 hours after 5 years of use. What about end-of-life for the product? Are we creating a large, dispersed waste disposal issue? What about the lithium mining and processing? This is scary stuff. It doesn’t mean we shouldn’t do it, just that we don’t know what this all looks like at scale.

  5. And milkshakes are awful to use as antifreeze. If you measure something by what it is not intended to be you can come up with any result you want.

    The main use for the powerwall is to time-shift electricity buying–the idea isn’t solar charge during the day to discharge at night, as the article supposed. The idea is to charge at night, at off peak electricity rates, and discharge during the day when electricity is most expensive.

    The idea is also that power companies would subsidize, as some are doing, the battery cost, thereby lowering the cost per kwh amortizing over the life of the battery. It would be safe to assume that Tesla is also looking for these to be a sales item in new home construction.

    During the day their is heavy commercial use of electricity, as well as people powering their central air. At night the commercial use drops off a ledge as does the home air conditioning use. Power companies need to build generators to cover the peak usage, and those generator then sit idle during off-peak hours.

    If a significant number of people switch to charging at night, that lowers the peak usage, and lowers the demand to build additional generators.

    1. Wait old fella, slow down there. Have you tried it? Sure, it will make your car overheat and get your radiator all sludgy, but oh MAN you’ll have the most delicious radiator sludge on the block.

  6. The author of that article hasn’t seen what they pay per kwh in places like Hawaii. Like many things, it has to be initially marketed to those of higher means, until it can become mass marketed. You wouldn’t believe what I paid per minute of cellular usage back in the late 80’s.

    Musk is a visionary. He gets the ball rolling. First Paypal, then SpaceX, then Tesla. I wouldn’t bet against his ideas.

    1. Oy, the cell rates back then! I paid .45 cents/minute weekdays and .27 cents/minute nights and weekends. Plus $45/mo for the line. No included minutes – just having the line was $45 and then the per minute charges were tacked on to that. The brick phone cost about $1,000 and there was no subsidy. It was pretty bad.

  7. Wow! Ten cents per kWH! Delivered cost of electricity for me is 0.48 USD / kWH … and the future price will be higher. I’ve already got PV and the inverter, so the hardware I would need is a battery module for the existing inverter and the battery system. I won’t be buying his system this go around, but maybe in a few years. The combination of an upgraded version 2, increased price / feature competition from other vendors, and decreased cost of batteries. Maybe an Apple car would be the “battery pack” on wheels that would power my house in extended emergencies.

    1. It wold be interesting to know the form factor of the Tesla car battery compared to the Powerwall form factor. Maybe Musk is just finding more ways to bump up the production volume in the Gigafactory. He’s kind of smart that way.

  8. It’s not a compelling buy at this point. The pure economic incentive for nearly anyone people to buy one of these doesn’t exist yet. And if you have no power of foresight, you’ll think that’s how it will always be.

    You could say, and many people did say, very similar things about the original iPhone. It was widely dismissed as an expensive toy for the rich. We all know how that story actually played out, as the prices and technology kept improving. I see a similar story panning out with local energy storage. The potential for this is huge.

  9. low info anecdotal regionally biased article.

    if you have solar panels or a windmill, you already have a DC/AC inverter. This is a niche product that is the missing link and it is not very expensive when financed with new home construction or renovation. If many people are off grid during a heat wave, additional dirty sources of energy would not have to be fired up. Load balancing would reduce power line sag on hot days leading to reduced power line maintenance costs, so if a bunch of rich green people in a neighborhood buy these, it is still of benefit to the whole municipality.

  10. He makes it sound so good, but neglects to mention that if everyone has one of these Powerwalls, off-peak hours will no longer exist because everyone will be buying power at night during “off-peak” hours. That means off-peak demand will become the same as peak demand. That also means the price of electricity will go up during “off-peak” hours (supply and demand) resulting in no savings at all. The only way to make it viable is to install solar panels on your house or in your yard. Before I do that they have to make those panels A LOT less ugly and more integrated into the roof design.

  11. You’re all forgetting it’s main use in a digital environment: a whole-house uninterruptible power supply. I certainly can’t afford Tesla’s battery, but if I had a home-based business with a bunch of workstations, $3,500 might be worth the peace of mind.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.