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How the Tesla Powerwall Works


The Bottom Line for Powerwall
The Tesla Motors factory shown here sprawls across Fremont, California. Tesla plans to open another factory in Nevada that could begin production in 2017.
The Tesla Motors factory shown here sprawls across Fremont, California. Tesla plans to open another factory in Nevada that could begin production in 2017.
© Steve Proehl/Proehl Studios/Corbis

Shortly after Tesla's big announcement, critics took some of the shine off Powerwall's stylish lenticular case, arguing that the devices only made financial sense as toys for wealthy, green early adopters [source: Helman]. Even the largest U.S. rooftop installer, SolarCity, whose chairman and largest shareholder is Tesla CEO Elon Musk, opted not to initially provide Powerwalls to current customers, saying they are not yet cost-effective [sources: Geuss; Randall; Vance]. Instead, the company plans to offer the batteries to its Hawaiian customers in 2016 [sources: Geuss; Helman; Randall]. It also will allow new customers to opt into the Powerwall as part of a nine-year, $5,000 lease plan, or to buy it themselves at $7,140 — quite a jolt compared to Tesla's $3,000 price tag [sources: Galbraith; Downing and Goossens; Randall].

Why the extra cost? We can speculate that some of the extra cash will cover leasing fees and the costs of an inverter. Tesla claims its Powerwall requires no upkeep, but other details that affect the batteries' lifetime remain unclear and unproven, so some of the price might include replacement costs. Current deep-cycle batteries need swapping out roughly four times over the lifetime of solar panels. It's also possible that, given the Powerwall's 2 kW stream, SolarCity plans to equip its clients with two units each [source: Helman].

Powerwall adopters could trim a lot of fat, and possibly make their bets pay off, by owning their own equipment or by pooling community resources but, again, this is largely speculative [sources: Helman; Gangemi].

For now, Tesla's entry into the battery market is a gamble, and a big one. On the positive side, Tesla has already forged partnerships with corporate heavy hitters, and its price point looks attractive to utilities. The greenies and the gadget junkies of the world will join in no matter what and, in terms of bang per buck, no other residential cell is fit to hold Tesla's battery box. If the cost of lithium-ion batteries continues to drop as fast as that of PV systems, then the future of Tesla's stationary batteries could look bright indeed [source: Randall].

That said, in absolute terms the Powerwall remains pricey. Moreover, the company that makes it is on track to lose $500 million in 2015, burns through money like tire rubber and sports the kind of overamped stock prices that would make a dot-com blush — all of which could add up to a sustainability company that's not very sustainable [sources: Helman].

Tesla Powerwalls will become available in late summer 2015 in the U.S., sometime that year in Europe and early in the next in the Asia-Pacific region [source: Galbraith]. After that, only time will tell whether Tesla's batteries jolt the grid or fizzle out.