Like almost everything else related to the company, its venture into energy storage is generating plenty of publicity for electric-car maker Tesla Motors.
The new product line includes Powerwall home battery packs for the home, as well as a separate line of battery packs designed for businesses and utilities.
But it’s worth noting that Tesla didn’t invent the field of home-energy storage, and it could very well face stiff competition in that market from better established (if less well-known) players.
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While energy storage is expected to grow into a major business, right now the customer base is small, and a small pool of government subsidies are vital for companies.
And it’s accurate to say “companies,” because Tesla is far from the only one angling for energy-storage customers and subsidies, according to Reuters.
Large battery makers, including Samsung SDI, LG Chem, and Saft Groupe already sell products that do fundamentally the same thing as the Tesla Powerwall, the news service says.
Tesla Energy for utilities
A number of smaller companies are also entering the field.
Startup Stem has secured a large contract with utility Southern California Edison, and Coda Energy–reborn from the remains of the failed electric-car maker–also sells batteries to businesses for energy storage.
Tesla itself–along with Elon Musk-controlled SolarCity–has also been quietly selling limited numbers of storage systems for years.
MORE: Tesla’s Big Bet: Batteries For Energy Storage A ‘Major New Product’
Tesla Powerwall home batteries will be priced for installers at $3,000 for the 7-kilowatt-hour version, and $3,500 for the $10-kWh version.
However, factoring in the cost of an inverter plus the installation, the total price for consumers could be almost twice those figures, according to Lux Research.
That total cost would be consistent with the current market today, Coda CEO Paul Detering told Reuters.
Tesla Energy for utilities
The main perk of a home-battery system is its ability to utilize electricity generated from solar panels better.
Since many electric-car owners use solar arrays for home charging, it’s a natural fit for Tesla.
The company also pitches Powerwall packs as a backup power source during outages.
But with the average U.S. home using 32 kWh of power a day, even the larger 10-kWh pack would be of use only for several hours.
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Instead, the real benefit of energy storage will come in pairing it with renewable-energy sources, something that’s been supported so far by government subsidies.
California’s Self-Generation Incentive Program provides $83 million a year for distributed energy-generation technologies.
In 2011, Tesla and SolarCity were virtually the only companies claiming incentives for energy storage, state data shows. That’s no longer the case.
And it’s unclear how the energy-storage industry would react if such government incentives became less available.
Electricity grid substation (Image: FirstEnergy Corp on Flickr, used under CC license)
And while it has gotten the bulk of the coverage, energy storage for homes is just one part of Tesla’s overall business plan in that arena.
Providing storage for businesses and utilities could have a much greater impact on lowering carbon emissions, by making it more practical to use larger-scale renewable energy sources without the threat of destabilizing the grid.
Energy storage can also help utilities balance minute-to-minute grid supply and demand, potentially making the infrastructure more reliable.
Overall, energy storage is expected to grow dramatically over the next few years: It could reach $1.5 billion in 2019, according to a recent report from GTM Research and the Energy Storage Association.
That should provide plenty of business–not just for Tesla, but also for competitors who don’t get nearly as much media attention.
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