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Tesla plugs into new market with home battery system

Published:Sunday | May 3, 2015 | 12:00 AM
Elon Musk, CEO of Tesla Motors Inc, unveils the company’s newest product, Powerpack, in Hawthorne, Calififornia, Thursday, April 30, 2015.
This April 20, 2015, photo shows a prototype Tesla battery system that powers the home of David Cunningham in Foster City, Calififornia. Cunnigham installed the battery late last year to pair with his solar panels as part of a pilot programme run by the California Public Utilities Commission to test home-battery performance. Tesla is expected to unveil a stationary battery for homeowners and businesses on Thursday, April 30.

Never lacking daring ideas, billionaire entrepreneur Elon Musk is determined to jolt the electricity market.

The CEO of electric car maker Tesla Motors hopes to park hundreds of millions of large, solar panel-connected batteries in homes and businesses so the world can disconnect from power plants and he can profit. On Thursday night, before an adoring crowd and a party-like atmosphere, Musk unveiled how he intends to do it.

Musk took the stage at Tesla's design studio near Los Angeles International Airport, an audience of drink-toting enthusiasts cheering him on, in a scene fitting for an audacious dreamer renowned for pursuing far-out projects. Colonising Mars is one of Musk's goals at Space X, a rocketmaker that he also runs.

Now, he is setting out on another ambitious mission. "Our goal here is to fundamentally change the way the world uses energy," Musk told reporters gathered in Hawthorne, California.

Although Tesla will make the battery called 'Powerwall', it will be sold by a variety of other companies. The list of partners includes SolarCity, a solar installer founded by Musk's cousins, Lyndon and Peter Rive. Musk is SolarCity's chairman and largest shareholder.

As with Tesla's electric cars, which start around US$70,000, the battery might be too expensive for most consumers. The system will carry a suggested price of US$3,000 to US$3,500, depending on the desired capacity. Installation will be extra. That could discourage widespread adoption, especially for a product that may only have limited use.

"I don't believe this product in its first incarnation will be interesting to the average person," conceded Peter Rive, SolarCity's chief technology officer. Rive, though, still expects there to be enough demand to substantially increase the number of batteries in homes.


Musk is so encouraged by the initial demand that he believes Tesla and other future entrants in the market will be able to sell two billion battery packs around the world roughly the same number of vehicles already on roads. Although that may sound like a "super crazy" goal, Musk insisted it "is within the power of humanity to do".

For now, the battery primarily serves as an expensive back-up system during blackouts for customers like David Cunningham, an aerospace engineer from Foster City, California. He installed a Tesla battery late last year to pair with his solar panels as part of a pilot programme run by the California Public Utilities Commission to test home-battery performance.

Although Cunningham's home has not endured a blackout in the six months that he has had the battery, it's capable of running critical home appliances like lights and refrigeration and can be recharged by solar panels during the day.

"As long as a person has solar panels, it's just a natural fit for the two to go together," Cunningham, 77, said. "I consider it to be a whole-power system right here in my home."

Several businesses, including Amazon.com and Target, plan to use Tesla's battery-storage system on a limited basis. Southern California Edison is already using Tesla batteries to store energy.

Tesla is building a giant factory in Nevada that will begin churning out batteries in 2017.

- AP