SolarCity Co-Founder Discusses Tesla Powerwall

MAY 10 2015 BY ERIC LOVEDAY 29

SolarCity System With Tesla Powerwall

SolarCity System With Tesla Powerwall

Tesla Energy Powerwall

Tesla Energy Powerwall

Coinciding with Tesla’s announcement of its battery Powerwall system, SolarCity co-founder and chief technical officer, Peter Rive, released this post on SolarCity’s website.

A breakthrough in the affordability of Solar Battery Systems

By Peter Rive, SolarCity Co-Founder and CTO

SolarCity’s mission is to remove every obstacle that stands in the way of clean energy. Today we introduced a product that will make serious headway in this effort: fully-integrated and affordable solar battery backup systems for homes, businesses and governmental utilities. These products can provide benefits to the utility grid as a whole and to all consumers of energy.

While the sun provides more energy in the middle of a single day than the planet’s entire population uses in a year, our potential to harness the sun as an energy source has always been held back by intermittency and our inability to access its energy at night. Battery storage will help solve both of these issues, and as soon as solar battery systems are cost-competitive with fossil fuel-based centralized power, I believe the demand for solar energy will eclipse that of fossil energy.

Using Tesla’s suite of batteries for homes and businesses, SolarCity’s fully-installed battery and solar system costs are one-third of what they were a year ago. We expect costs to continue to decline as manufacturing scales, and over the next 5-10 years, these cost reductions will make it feasible to deploy a battery by default with all of our solar power systems.

Batteries distributed at homes across a region can lower the costs of maintaining the grid and new market structures designed to take full advantage of this benefit appear likely in several states.

Proceedings currently underway, such as the New York REV and California’s More than Smart, seek the creation of effective market structures for distributed clean energy services that will reward utilities for adopting cheaper, cleaner, customer-sited resources. The products that we’re announcing today are the building blocks of these new market structures.

Our customer contract explicitly contemplates the potential of these markets and creates a revenue-sharing opportunity for the customer. For utilities and grid operators, the technology is designed to enable remote-aggregated control of solar battery systems. I urge anyone reading this who is responsible for managing grid operations, and who is interested in procuring capacity, reactive power, or voltage management services deep in the distribution system to contact us.

I believe the best grid design is one in which utilities embrace distributed energy resources. However, when utilities and regulators impose solar-specific charges on their customers, or burden homeowners with unduly long system interconnection delays, utilities risk mass customer defection from the grid via solar battery systems.

In Hawaii, people are frustrated with utilities for having put a hold on rooftop solar in their territories. We hear often from people seeking a solar battery system that will allow them to sever ties from their utility completely. As I’ve written before, we don’t think this is optimal for the grid. But when the choice is between being grid-connected without solar or being off the grid with rooftop solar and a solar battery system, the choice is clear. As a result, SolarCity plans to offer an off-grid solar battery system to eligible customers in Hawaii beginning in 2016.

It is vital that we advance the technologies that will lead to an affordable, decarbonized grid. The widespread availability of affordable battery storage will unlock the full potential of solar energy to contribute to this effort. I believe that the solar battery systems launched today will result in a record amount of batteries being deployed in the U.S., advancing our goal of ensuring a cleaner future for all.

Learn more about our battery backup service here.

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29 Comments on "SolarCity Co-Founder Discusses Tesla Powerwall"

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Mister G

Centralized utilities have been put on notice, they either adapt and stay relevant or fight change and become irrelevant.

Speculawyer

Well. they know that we really do need the grid since it is a great way to balance out all the various generation sources and loads. But that said, the regulators need to lean on them heavily to keep allowing more renewables onto the grid. And to do with will probably require charging rooftop solar people a bit and/or more storage.

DonC

Wonderful but disruptive technology. The cost is too high but as that drops we’ll see the benefits of a less stressed and more secure grid as well as low and stable energy prices.

Makes it quite difficult for the electric utilities to use regulatory barriers to stop bypass, which will have the happy result of having them roll out more electric car charging stations as a means of keeping revenue up.

ItsNotAboutTheMoney

Yes, electric cars add off-peak household demand, which is great economics, and extremely hard for off-grid solutions to meet economically.

If you think of Tesla and SolarCity as a single entity, pushing hard to lower prices in both areas, then their success would really squeeze utilities.

Want to stop defections: lower electricity prices, add chargers to support electric cars and encourage tied solar.
Want to stop solar: encourage electric cars or lower electricity prices (which encourages electric cars).

Sveno

You are talking about solar. We also have wind, tidal and hydro, for starters.

Lensman
I have serious doubts that even in Hawaii, where electricity prices are about twice the national average, the utility companies are much concerned about a mass movement of people going off-grid. Solar proponents talk brightly of how much energy you can get on a sunny day. But they try to draw a shadow over the limitations. Even in “sunny” Hawaii, sunlight doesn’t actually reach the ground anywhere near all of the time. According to the source below, here’s a table of the percentage of time between sunrise and sunset that sunshine reaches the ground: 41 Hilo, Big Island 74 Honolulu, Oahu 67 Kahului, Maui 59 Lihue, Kauai source: http://www.currentresults.com/Weather/Hawaii/annual-days-of-sunshine.php Not exactly as sunny as we were envisioning, is it? But of course, even when it’s overcast, solar panels do put out some power. But practically, now much is “some”? According to a report by one person living off-grid in a tiny cabin in Hawaii, “from one-tenth to one-fourth of full power”. source: http://www.greentechmedia.com/articles/read/how-i-went-off-grid-in-hawaii That article is pretty typical of off-grid living; someone using a tiny cabin for a retreat, not their primary residence. And let’s remember for those interested in driving an EV, the usual scenario is to use cheaper… Read more »
sven

Lensman said: “[Hawaii is] Not exactly as sunny as we were envisioning, is it? . . . But of course, even when it’s overcast, solar panels do put out some power. But practically, [how] much is ‘some’?”

Practically, it’s sunny enough to produce enough solar power for Hawaiian electric utilities to make 9 am to 2 pm an off-peak rate period.

http://chargedevs.com/newswire/hawaii-energy-launches-pilot-time-of-use-charging-program/

Speculawyer

Dude. That guy’s PV system is a joke. He has 2 panels. Two.

My system has 24 panels. And my PV is just slightly larger than the average size for a residential PV system.

If you live in a sunny place, you can definitely go off grid. It won’t be cheap since you’ll probably want to oversize the system and bit and the batteries, charge controllers, DC->AC inverters, etc. will be raise the price.

But in a place like Hawaii . . . it could be worth it. Especially if the price of oil goes up again.

Lensman

Speculawyer said:

“Dude. That guy’s PV system is a joke. He has 2 panels. Two.”

Yes, that’s the point. The only way it’s practical to go off-grid is if you have ridiculously low power needs, as compared to the average household. Having only 2 solar panels makes it practical to buy and maintain enough storage batteries to actually provide a significant amount of backup.

“My system has 24 panels. And my PV is just slightly larger than the average size for a residential PV system.

“If you live in a sunny place, you can definitely go off grid.”

Yeah? Then why haven’t you?

I believe I’ve explained why.

sven

“Yeah? Then why haven’t you?”

Don’t be silly Lensdude.

He’s from California, net metering on a TOU plan and selling back his annual excess, probably at retail rates and pocketing the difference between peak and off-peak rates. In effect, he’s using the grid as his battery. Why would he pass up a sweet deal like that to go off grid?

I believe I’ve explained why. 😀

Lensman

“In effect, he’s using the grid as his battery.”

Exactly. How can an expensive battery backup system, even the Powerwall, compete with that?

I guess I should have stated that explicitly in my original post. To me, the implication is obvious.

Speculawyer

No, Sven, that is NOT the way it works. Most of the net-metering is just an equal trade of my solar PV day-time electricity to the grid for night-time electricity from the grid. And since day-time electricity is worth much more than the night-time electricity, is the utility that is making out well on that exchange. (They sell my PV electricity to my neighbors at peak day-time rates and repay me with excess cheap off-peak electricity at night.)

At the end of the year, I tend to have a surplus of extra electricity that I put onto the grid. They pay me the WHOLESALE rate for that excess . . . about 4 cents per KWH. Again, I lose out on that exchange since I’ve calculated that my self-installed system generates at about 6 cents per KWH rate.

So I do net-metering . . . but it is not at all a bad deal for the utility.

Bill Howland

Sven and I live in the same state under the same Public Service Commission rulings, but with vastly different Utilities.

If Sven as I believe currently does not have solar power, then he needs a battery system for precisely the reason that I do not need one.

He needs to arbitrage his rates to get away from ConEd’s confiscatory pricing. The batteries will help NYC avoid the need for more peaking plants since at 2 am there are adequate facilities.

Since I don’t have batteries I am allowed to Net Meter (they are mutually exclusive in this State), and therefore, I’m allowed to send excess generation back at the rate I paid for it. The utility gets the benefit of more juice during the day when they need it.

But Sven needs to do something about his electric bill. Therefore, if he decides to not get a solar system, he definitely needs batteries.

Speculawyer

Why in the world would I bother to go off-grid?!?!?

There is nothing for me to gain and a lot to lose (like the ability to draw large amounts of power to power up an EV fast).

I would be tempted to get a Powerwall just to play around with it and have back-up power if the grid were to go down. But when you have a good net-metering program, there is no reason to go off grid. It is places that don’t allow net-metering or have various other issues like high fixed rates where people want to go off grid.

Speculawyer

But Hawaii has been different. The HAD a good net-metering program but it got oversubscribed and the utility refused to allow new net-metering customers. People installed solar PV but many systems sat there for more than a year without being allowed to turn on. THAT is why a lot of people want to go off-grid in Hawaii. Hawaii has started approving new customers again but they probably will soon stop allowing new customers because it is so popular there that they will soon hit levels where the grid runs into problems. Problems that can be solved with batteries. (Either at the grid level or people can drop off the grid and do it at the residential level.)

Mint

Going off-grid using ONLY solar and batteries would give you a problem for the reasons you mentioned, but that’s not how people do it, so what’s the point of your analysis?

The solution is solar+storage+generator. Generators are cheap, and $3/gal gasoline is expensive if you need it for 50% of your electricity needs, but not for 25c/kWh electricity could see off-grid being economical.

It’s not for everywhere, but Australia, Hawaii, and some other places only need 1 day of storage to slash generator needs.

Mint

Sorry, I screwed up my post.

Generators are cheap, and $3/gal gasoline is expensive if you need it for 50% of your electricity needs, but not for less than 10%. Places with 25c/kWh electricity could see off-grid being economical.

Lensman

Thanks for your input, Mint. This is one case where I’d be very happy for someone to prove me wrong. I’d be very happy to have a practical, real-world argument in favor of going off grid.

Do you know of anyone who uses the system you’re talking about? The only context in which I’ve seen using a gas/diesel generator discussed is for an emergency backup in case the grid goes down… during a blackout.

I’d love to see a website where people using that type of system to actually go off-grid in a full-sized house talk about the realities of off-grid living. (“Full sized” house doesn’t necessarily mean the size of the average American house; Europeans on average get by with houses about half the size of ours. But, a real house that’s practical for a small family to live in year-round, and not just a cabin.)

One thing that hasn’t been discussed here is the use of direct solar heating for hot water. I understand that can reduce your electric power needs substantially, and it’s a much more efficient way to use solar power than PV panels and an electric water heater.

Angelo

Are there, or will there be government incentives for these systems?

sven
sven

Off topic:

Does anyone know why comment count at the top of the story next to the author’s name is currently 14, yet just above the comment section it says there are currently “100 responses” to this story? In other stories, I’ve noticed that the two figures sometimes differ by one or two, but never such a large number like the difference of 86 in this story. Is this story getting spammed, and those non-appearing responses going straight to the spam filter?

Yupe, for some reason this story is getting ‘farmed’ fairly hard…the discrepancy on the numbers is for posts that are currently being held up for moderation before officially heading to spam.

You are right, usually the difference is much lower, or exactly the same if we are keeping on top of the moderation…but sometimes it is just too much of a pain in one thread, so we let them pile up in oblivion, (=

sven

Thanks for the explanation Jay. 😀

daniel

Perhaps a better use case at the moment: upper middle class resident / small business in South Africa. Occasional blackouts. You want to use solar + batteries as primary electricity and weak grid as backup and for peak hours. This could increase coverage from say 95% of year to 99.9% while potentially saving energy bill.

MDEV

I would do the same in the PEPCO are of coverage in Maryland, Bethesda, unreliable power supply and blackouts.

daniel

Does anyone have an estimate of the cost of materials in a li-ion battery? What you might call the ‘magic wand number’…
From Tesla I get that they have no problem getting $100 /kWh in 5 -10 years. But how much further could it drop?

Lensman
It’s going to be difficult to get meaningful numbers. You can find breakdowns of the costs of the components going into the battery cells, but those costs refer to processed materials, not raw materials. For example, see Table 2 here for a breakdown of one type of li-ion battery: http://www.sciencedirect.com/science/article/pii/S037877531401845X In fact, I’ve seen far too many articles claiming that Tesla’s goal of reducing the cost of making li-ion batteries by 30% (or more!) is impossible, because the cost of the “raw materials” wouldn’t allow that much reduction. But if you dig into those numbers, you quickly discover that they’re not citing prices for raw materials, but processed materials. There’s a lot of room for cost savings if the cost of processing the materials going into the cells can be brought down. For example, the cost cited for electrolyte in the article linked above is $22/liter. But the cost of the raw material from which the electrolyte is made, lithium carbonate (of the high-grade ore needed for li-ion batteries), is only $5000-6000 per metric ton, which comes to $2.27-2.72 per pound, or (according to my guesstimate, based on the weight of loose dirt at 12.62 pounds/gallon) about $7.56-9.06 per liter.… Read more »
daniel

Great insight, thanks.

In this case then, it would be useful to even reconsider what is projected as the cost of raw materials. Certainly for Lithium, since it probably has very little current use compared to the gigafactory plans, if the demand skyrockets you could think of new and better ways of extracting that resource.

This does seem like a complex problem.

Speculawyer

The people at The Energy Gang did a good podcast talking about the Tesla batteries (near the end).
http://www.greentechmedia.com/articles/read/is-the-american-market-ready-for-distributed-batteries-like-teslas-powerwal