Last night, as promised, Tesla unveiled the new, non-automotive product line it had previously teased--confirming that the carmaker will enter the energy-storage business.

Under the Tesla Energy brand, the electric-car manufacturer will also sell lithium-ion batteries for utilities, businesses, and houses.

The batteries can store electricity generated through solar panels for later use--greatly increasing their utility.

MORE: Tesla's Big Bet: Batteries For Energy Storage A 'Major New Product'

The sun doesn't shine at night, CEO Elon Musk noted in his remarks at the unveiling of the new product line at the company's design studio in Hawthorne, California.

Batteries can store electricity generated during times of peak production, allowing users to rely more heavily on solar power.

But, Musk said, "The issue with existing batteries is they suck."

Tesla Powerwall Home Battery

Tesla Powerwall Home Battery

The first product to market for the new business will be the Powerwall Home Battery. Presumably, it won't suck.

Tesla expects customers to use this wall-mounted lithium-ion battery pack to increase solar-energy consumption, as well as to take advantage of lower rates from utility companies by charging during off-peak times.

The battery can also work as a backup power source during outages, Tesla says.

SEE ALSO: California Energy Storage: Why It's Good News For Electric Cars (Nov 2014)

The Powerwall will be offered in two configurations: a 7-kilowatt-hour unit that will sell for $3,000, and a 10-kWH unit for $3,500 to installers.

Those prices include exclude the cost of an inverter and installation. Deliveries will begin in "late summer."

Tesla Energy will also offer batteries for business use that it says are "based on the powertrain architecture and components" of the company's electric cars.

Tesla Energy for utilities

Tesla Energy for utilities

The appeal here lies in cost savings from increased use of electricity from on-site solar arrays, as well as electricity absorbed from the grid during off-peak times.

Tesla says batteries can also be programmed to release power during a facility's time of highest usage--helping to avoid demand charges from utilities.

This and other system-management functions will be performed with software from EnerNOC designed to integrate with all Tesla energy-storage sites.

RELATED: Electric Cars & Solar: Will They Make Gasoline & Utilities Obsolete? (Jan 2014)

Tesla has quietly tested its energy-storage systems over the past year with businesses, including Wal-Mart. Amazon and Target have signed on for pilot programs as well.

The third part of the Tesla Energy triad will be large-scale energy storage for utilities.

Tesla will offer 100-kWh "battery blocks" that can be assembled into grid-storage arrays ranging from 500 kWh to 10 MWh in capacity.

Tesla Energy for utilities

Tesla Energy for utilities

These systems can provide two to four hours of continuous power to the grid, according to Tesla.

Energy storage can help utilities shift more production to renewable sources, and balance the grid by storing power for times of peak demand.

In Tesla's home state of California, the three largest investor-owned utilities are required to purchase large amount of energy-storage capacity, providing a potential market for the company's batteries.

RELATED: As Solar Power Spreads, Diverse Users Fight Utility Attempts To Penalize It

Overall, the U.S. market for energy storage in 2019 could grow to $1.5 billion, according to a recent report from GTM Research and the Energy Storage Association.

Right now though, few consumers are familiar with energy storage. No recognizable brand currently markets batteries for onsite storage of solar energy, as far as we know.

That gives Tesla a potential head start in a business that could prove a natural extension of its electric-car manufacturing.

Tesla battery gigafactory site, Reno, Nevada, Feb 25, 2015 [photo: CC BY-NC-SA 4.0 Bob Tregilus]

Tesla battery gigafactory site, Reno, Nevada, Feb 25, 2015 [photo: CC BY-NC-SA 4.0 Bob Tregilus]

Stationary battery sales offer an outlet for any excess production capacity at the company's Nevada gigafactory.

That factory is intended to produce cheap lithium-ion cells for the Tesla Model 3 electric car, expected to launch in three or four years.

There's also a strong correlation between electric-car ownership and home-solar usage, according to data from California user surveys.

And thanks to his position as the board chairman of photovoltaic-panel installer SolarCity, Elon Musk stands to benefit from both businesses.

Taking on a new, unproven product line comes with risks, of course.

But Tesla has done the seemingly impossible before--and if nothing else, its approach to energy storage should prove just as interesting as its approach to electric cars.

[EDITOR'S NOTE: An earlier version of this article incorrectly said that the prices for Tesla Powerwall Home Batteries include inverter and installation costs. They do not, and those prices represent what Tesla will charge installers, not individual consumers. We have corrected that statement, and apologize for the error.]


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