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How the Tesla Powerwall Works

The Need for a Better Solar Battery

There's little question that interest in sun-based power is rising. In 2014 alone, photovoltaic power in the U.S. topped 2013 levels by 6.2 gigawatts. That's a 30 percent bump likely to carry on into 2015, spurred by dropping costs, incentive programs and the rise of leasing plans [source: Cusick and ClimateWire]. In the next five years, solar power will account for more than 50 percent of energy in California (during sunny hours) [source: Randall].

But solar power, like most renewable sources, remains a mixed bag. Just as early panels hardly dribbled enough juice to justify their costs, current storage options only make sense for a small subset of solar users [source: Cusick and ClimateWire]. In remote areas, where grid hookups run to the costly and erratic, even clunky batteries make sense. The same holds true for high-cost, low-consumption countries like Germany, or in Hawaii, where they pay three times as much for energy as mainlanders do [sources: Galbraith; Geuss; Helman; Randall].

But in the rest of the U.S., energy rates remain cheap enough that most households are better off sticking with the sell-buyback model, a swap first made possible by the Public Utility Regulatory Policies Act (PURPA) of 1978. Intended to reform rate structures, support cogeneration and buoy alternative energy, PURPA also opened the door for smaller entities to challenge energy monopolies [source: NMAH]. An efficient and cost-effective battery could widen that gap, and that's where Tesla comes in.

Currently, German solar patrons spend $2,200 per kwh for storage products provided by the Austrian company Fronius Energy [source: Galbraith]. That includes a large-mini-fridge-sized battery, an energy meter and a large-backpack-sized inverter to convert the battery's direct current (DC) back into alternating current (AC) that the house can use. Compare that to Tesla's sleek, wall-mounted Powerwall, which offers a 7 kwh daily cycle battery for $3,000 (inverter not included), and you begin to see why Fronius has entered into a partnership with Tesla to provide the Powerwall to its customers [sources: Fronius International; Galbraith].

But Fronius and Tesla are far from the only games in town. They face stiff competition from cash-rich, proven companies like Samsung SDI and LG Chem, as well as smaller companies, some of which, like startup Stem, have made inroads with a major utility or two [source: Groom].

As for Hawaii, Tesla plans to offer the daily-cycle battery option in 2016, the same year it moves into the Asia-Pacific region. Solar citizens of the Aloha State, who currently shell out 37 cents per kwh compared to the U.S. average of 12.5, would pay a projected 15 cents per kwh using Powerwall [sources: Geuss; Helman; Randall].

It all sounds promising. So why do some people still harbor doubts?