Will Tesla’s Commercial Battery Eventually Phase Out Local Utility Companies

Tesla has unveiled their “Powerwall” energy storage unit to the public. This technology breakthrough could lead to a long term renewable based power grid and mark the beginning of the end of carbon based power generation.

The ability to store energy to power buildings is a game changer. This will allow renewable energy to become the most cost effective energy source. Customers will no longer be beholden to using energy only when the sun and the wind can produce it. Energy can be produced when it is shining, or blowing and can literally be saved for a rainy day.

The battery units that mount on the wall are designed to store solar energy that is produced when it is not needed. It can then be released at times of peak demand or at times when panels cannot collect more energy.

Tesla’s Solar Powered Battery for homes

Elon Musk, Tesla’s founder and chief executive, said the new Tesla Energy division represented a “critical step” in his ambition to shift the global energy systems towards greater use of renewable power.

“We’re talking about trying to change the fundamental energy infrastructure of the world,” Musk was quoted as saying. “This is actually within the power of humanity to do. It is not impossible.”

Equally significant is the ability for businesses to participate in energy storage without any out of pocket capital. SolarCity (which Musk id also the Chairman of the board) is able to use the 30% renewable energy tax credit with the solar storage installations. Customers only need good credit to qualify for the batteries.

Will individual energy storage threaten the big electricity retailers?

Don’t write off the utilities just yet. While the key to the great renewables conversion may be storage the job will require a global infrastructure build-out that will take a lot of time and money.

Utility Companies will be working with regulators to finance grid upgrades to make the transition to a more distributed future for generation. Utilities will also invest in their own renewable generation. Energy Retailers would most likely adapt to the new market by beginning to provide their own energy storage devices. They would partner with retailers for the components, package them and install them for consumers only they won’t own it.

Although the advent of Tesla’s batteries are certain to help evolve the way we store and ultimately use energy, we cannot completely do away with utilities just yet. What seems like a forgone conclusion is that once batteries become a common piece of equipment for customers, businesses will be able to take more control over their energy services.

Matt Helland
Sr VP of Client Relations

Sources:
http://www.greenbiz.com
http://www.thefifthestate.com
http://www.forbes.com