Tesla Motors is building the world’s biggest battery factory just outside of Reno, Nevada.
The company is calling it the “gigafactory,” and when it’s up and running in 2016 it’s expected to make Tesla’s electric cars much more affordable.
“In a single factory we’re doubling the worldwide capacity to manufacture lithium-ion batteries,” says J.B. Straubel, Tesla’s chief technology officer.
That’s significant enough. But the company also plans to develop batteries for use with solar-power generation – giving Tesla a shot at challenging public utilities as an energy source, Straubel says.
“At the price points that we’re expecting to achieve with the gigafactory ... we see a market that is well in excess of the production capability of the factory,” says Straubel.
The market for batteries is an offshoot of the booming business for solar panels, particularly in states such as California, where solar is becoming commonplace.
“We sign up approximately one new customer every minute of the workday,” says Will Craven, director of public affairs at California-based SolarCity.
Much of the excess energy harnessed by solar panels is returned to the power grid, Cravens says.
This means homeowners and businesses may earn a credit from their power companies, but have no say over when and how that energy is used.
The partnership with SolarCity will use rooftop solar panels fitted with Tesla’s battery packs to allow customers to keep that energy in-house.
That means they can use it however, and whenever, they want. The concept puts Tesla in direct competition with utility companies.
“Stationary storage, or backup storage, is really being considered the ‘Holy Grail’ of renewable electricity generation,” says Ben Kallo, an analyst with the Robert W. Baird financial services firm.
Kallo points out that the intermittent nature of renewable energy sources makes them less reliable because the wind doesn’t always blow and the sun doesn’t always shine. But with the ability to store that energy, renewable energy sources can compete head-to-head with utility companies for customers.
“There are still many utilities out there who kind of have their head stuck in the sand and just hope that this goes away. What we’re seeing is really building momentum,” Kallo says.
Forward-minded utilities might look at Tesla’s business model as an opportunity, he says. Energy-storage technology could be used to build capacity in their existing grids, and also build new infrastructure for battery-powered cars and homes.
Tesla Charges Ahead At The Grid Storage Market
Katie Fehrenbacher
Given that Tesla’s battery factory won’t be producing at scale (and at that lower price point) until 2020 after starting in 2016, I think it might miss this first California utility storage window.
However, Straubel said “the procurement for these cycles is really long. But this is a business that is certainly gaining an increasing amount of our attention.”
Construction of Tesla’s gigafactory is underway.
Tesla isn’t just looking at utilities as new customers. Musk also said that Tesla plans to unveil a “Tesla home battery,” or “consumer battery,” in the next month or two.
That battery - likely an iteration of the one it’s been trialling with customers already - will be for use in people’s houses or businesses, said Tesla CEO Elon Musk.
Musk described the battery as “really great,” and something he’s “really excited about.” He noted that the design of that battery is already done, and will go into production in 6 months or so.
It’s reasonable to think that an electric car company could come to dominate the grid energy storage market.
Earlier this week, at the Department of Energy’s ARPA-E conference on energy storage, EPRI’s Mark Duvall said that he has long believed that an automotive company would be the winner in the grid storage space. Because space, weight and cost are so constrained and limited on a car, car battery companies are intensely focused on optimizing batteries for these metrics.
Source: Gigaom
Photo Credit: Guus Schoonewille/AFP/Getty Images
Source: American Public Media’s Marketplace
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