Tesla Motors, which plans to build a giant lithium-ion battery factory, is keenly interested in the emerging energy storage market, where home and businesses owners might want to buy battery systems for backup power or for managing solar electricity generation and use.
The company has been thinking about what an attractive battery system for a home should look like. Its CEO, Elon Musk, gave a glimpse of the company’s design approach during a discussion of its first-quarter earnings on Wednesday.
“We are trying to figure out what would be a cool stationary (battery) pack,” Musk said. “Some will be like the Model S pack: something flat, 5 inches off the wall, wall mounted, with a beautiful cover, an integrated bi-directional inverter, and plug and play.”
Musk said he will give more details about the home battery system design toward the end of this year or early next year.
Selling its battery packs into the energy storage market would seem a good fit for Tesla, which counts designing battery packs and developing battery management system as part of its core expertise. The battery management system includes sensors and software to manage the charging and discharging of the batteries and to make sure they don’t overheat.
The company has embarked on a plan to build its own battery manufacturing complex, which would put the production lines for making cells and assembling them into packs under one roof. The cell production at the new factory will likely be managed by its current supplier, Panasonic.
Besides selling electric cars, Tesla also sells its powertrain system, which includes the batteries, to carmakers such as Toyota and Daimler.
Tesla already is working with SolarCity, which bundles Tesla’s battery systems with solar panels and market them to consumers and businesses. Musk is SolarCity’s chairman and a cousin of the solar company’s two founders.
The energy storage market is new. It’s attracting many players, from equipment manufacturers to installers, but how quickly it will really take off — if ever — isn’t clear.
California promises to be a good testing ground for energy storage technology and services because the state recently created an incentive program to encourage its utilities to use energy storage — it could be batteries or other storage technologies — to help them manage the growing amount of solar and wind energy.
Utilities could use energy storage to bank solar and wind electricity when there’s too much of it and then discharge the energy from storage and into the grid when demand is high.
“The long-term demand for stationary energy storage is extraordinary,” said JB Straubel, Tesla’s chief technical officer, during the earnings call on Wednesday. “We’ve done a huge amount of effort there and have talked to major utilities and energy service companies.”