Tesla isn't done. The deal includes over 100 Powerpacks for Electrify America.

Back in February of 2019, we alerted you about the news that Electrify America (EA) planned to add Tesla Powerpacks to 100 new charging stations. Tesla and Electrify America secured a deal for some 100 to 120 Powerpacks at various charging locations.

Fast-forward to the present, and Tesla has already provided about 60 of the battery energy storage units. Additional deployments are coming prior to the end of 2020.

What's the reason for the onsite energy storage? It all comes down to demand charges. Demand charges are based on the highest energy draw the company uses over a period of time. Essentially, it saves money and reduces the demand on the grid. Chief executive officer of Electrify America Giovanni Palazzo explained:

“With our chargers offering high power levels, it makes sense for us to use batteries at our most high demand stations for peak shaving to operate more efficiently. Tesla’s Powerpack system is a natural fit given their global expertise in both battery storage development and EV charging.”

Palazzo was recently interviewed by Electrek. He revealed that some 60 EA charging locations area already equipped with Tesla Powerpacks, and that may be only about half of the grand total when the initial deal is complete. However, Palazzo said EA may expand its deal with Tesla once it hits 100 installations.

With some utilities charging EA up to $30 or $40 per kWh in demand charges, a plan like this makes perfect sense. With EA's new rate plan, customers can charge for $0.31 to $0.43 per kWh. As you can see, in order to provide a decent rate for EV owners, onsite energy storage may be a necessity going forward.