Tesla To Offer Batteries To Consumers For Home Energy Storage

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Tesla Model S lithium-ion battery pack in rolling chassis   [photo: Martin Gillet via Flickr]

Tesla Model S lithium-ion battery pack in rolling chassis [photo: Martin Gillet via Flickr]

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It was just a couple of sentences during Wednesday's 2014 earnings call by Tesla Motors executives.

But in it, CEO Elon Musk apparently revealed a new line of business for the company: selling or leasing lithium-ion battery packs for home energy storage.

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The full quote can be found in the transcript of the earnings call, as published by Seeking Alpha. Musk said:

We’re going to unveil the Tesla home battery [indiscernible] consumer battery that will be for use in and [sic] people’s houses or businesses, fairly soon. We have the design done and it should start going into production probably about six months or so.

We probably got a date to have sort of product unveiling, it’s probably in the next month or two. It’s really great. I’m really excited about it.

Photovoltaic solar panels on roof of Honda Smart Home at UC-Davis, California

Photovoltaic solar panels on roof of Honda Smart Home at UC-Davis, California

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Green Car Reports reached out to Tesla to confirm that Tesla Motors will be going into the business of providing battery packs to consumers for household energy storage.

"Yes," said Khobi Brooklyn, the company's director of global communications, reiterating Musk's promise of a product unveiling in a month or two.

Tesla already provides battery packs to SolarCity, which leases solar panels and batteries to households to allow them to generate and store their own electricity--vastly reducing their electric bills in most cases.

ALSO SEE: Will Solar Panels Destroy Electric Utilities' Business Model? Yes, They Say

Musk is not only the chairman of that company, but also its largest shareholder.

It remains unclear whether the "we" in Musk's statement refers to Tesla Motors, or to Solar City, but the Tesla brand might give added cachet to lithium-ion batteries offered to homeowners who already have solar panels installed.

The prospect of affordable home energy storage, combined with the continually falling price of photovoltaic solar panels, is likely to change the energy landscape and the business model of established electric utilities quite dramatically over the next decade and beyond.

Solar panels at Supercharger in Barstow, CA, during Tesla Model S road trip [photo: David Noland]

Solar panels at Supercharger in Barstow, CA, during Tesla Model S road trip [photo: David Noland]

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"Distributed renewables," as the concept is collectively known, could thus be installed by homeowners or their utilities on individual buildings--residential or commercial--or even neighborhoods.

Utilities are also increasingly opening very large-scale solar farms in unpopulated areas to harvest hundreds of megawatts of solar electricity, and experimenting with batteries for energy storage to buffer the unpredictable supply and store energy for peak demand periods.

Tesla itself has said it plans to use solar energy to provide electricity for its Supercharger DC fast-charging stations; it recently installed solar panels at its first such site in Barstow, California.

MORE: What A Really Gigantic Solar Power Plant Looks Like (Jan 2013)

But while the quantity of electricity that is centrally generated in large power plants and then sold to individual consumers may ebb, utilities will still have to absorb the costs of maintaining the distribution grid and some generating capacity as a backup.

This has led some utilities to worry that if state regulators do not allow those costs to be separately billed from the fees for the electricity consumed, they face a "landline problem."

That is, their most affluent customers will switch over time to a different way of obtaining energy and no longer absorb their proportional cost of grid maintenance.

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

2012 Tesla Model S beta vehicle, Fremont, CA, October 2011

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Nonetheless, the lithium-ion cells produced in great volumes for electric cars will likely have many side effects--some of them unpredictable.

Now it appears that battery packs for home energy storage branded with the name of the Silicon Valley upstart electric-car maker will be one of those side effects.

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