Tesla Battery Orders Exceed Expectations at $800M Driven by Homeowners

Tesla launched a line of residential and commercial lithium-ion batteries, which are positioned as offering high-storage capacity at a competitive price.

Two residential units, called Powerwall, store up to 7kWh and 10kWh of energy from wind or solar power. Priced at $3,000 and $3,500, respectively, these wall-mounted lithium-ion batteries feature a glossy design and are positioned for use when sunlight is low or power reduced or during peak demand when electricity is priciest.

Tesla also offers the larger “Powerpack” unit, a 100kWh battery positioned as a solution for utilities that need to complement their intermittent supply of wind and solar energy or to inject into their grids to accommodate rising demand.

Initial units were manufactured at the company’s California factory, though production is slated to move to a planned Nevada facility, Tesla’s Gigafactory, to open in 2017. This new facility would be the world’s largest producer of lithium-ion batteries. Mass producing the batteries is the key to reducing prices, facilitating mainstream adoption.

At the launch, founder Elon Musk outlined his vision of a world consisting of homes, business—even entire villages obtaining all power requirements from sunshine. Tesla’s new batteries also will liberate renewable energy’s potential and reduce carbon emissions, which offsets climate change, Musk noted.

Later on, discussing initial sales of the batteries, Musk said that the numbers already were impressive, Bloomberg reported this week. In the first few days following the launch, Tesla wrote orders worth around $800 million in revenue, according to Bloomberg Business’s estimates.

If sales truly reach the projections, the battery units would have generated in a few days as much revenue as Tesla’s cars did for 2015’s entire first quarter. (A big stipulation is that the Powerwall units were available to is anyone online. All they needed to do was place a reservation; the offer allowed for no-money down reservations, and no purchase commitment either. Projections for the commercial units are unknown too, as Tesla didn’t reveal what a reservation constituted for that product.)

“It’s like crazy off-the-hook,” Musk said amid an earnings presentation. “The sheer volume of demand here is just staggering.”

Looking at the numbers, Musk noted his surprise that consumers had expressed larger demand than commercial interests.

The Los Angeles Times, however, noted that homeowners with solar power needs make up the primary market. “Excess energy can be used to charge the batteries for use at night or on cloudy days. But solar users remain connected to the grid, and many already get credited by their utility for any surplus power they produce.”

In addition to the unit price, consumers will have to pay additional fees, the article noted. SolarCity, which Musk serves as chairman at, will charge $5,000 for a prepaid nine-year battery backup service agreement that includes the device, controls and installation.

In total a customer can purchase the system — including the controls and installation — for $7,140, Jonathan Bass, SolarCity’s spokesman, told the LA Times.

Tesla is leveraging the lithium-ion battery technology it developed for its cars into the growing renewable energy market.

Peter Asmus, a research analyst at Navigant Research, said that utilities are familiar with the technology, which has been used in the Tesla vehicles “without mishap.”

He added that Tesla’s entry into this market shows how the power industry is moving away from its root dependence on giant utility plants to a more-distributed format.

U.S. spending on microgrid projects, including energy generation and storage technologies, is expected to drive annual growth from $4.3 billion in 2013 to $19.9 billion in 2020, according to Navigant Research.

Several firms including Fronius, SunRun, LicthBlick, and SolarEdge, are either collaborating with Tesla or integrating PowerWall into their systems.

And energy intelligence software firm EnerNOC announced that it would collaborate with Tesla on the deployment and management of energy storage systems in commercial and industrial buildings.

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