LOS ANGELES — Tesla Motors plans to generate new revenue by repackaging electric car batteries. This comes as home and business power storage systems face stiff competition for government subsidies critical to the market’s growth.
At the unveiling of its suite of storage battery systems near Los Angelos last Thursday, Tesla CE Elon Musk said the new Tesla Energy was far ahead of its competition in offering an integrated system for generating solar power and storing it on site.
Analysts see a multibillion-dollar market in its infancy as power companies, businesses and home owners buy systems that stabilise the grid. But Tesla is not the only company offering such systems, and industry insiders say the cost of a Tesla system, which starts at $3,000 (about R36,000) for a home storage battery pack, is in line with the rest of the market.
Established energy and technology players such as Samsung SDI, LG Chem and Saft Groupe are a few of the names marketing products similar to Tesla’s — small batteries to pair with solar panels at homes and businesses and much larger ones to help utilities shore up power grid reliability.
An array of small companies are also making waves in the field. Stem, which pairs batteries with software systems for businesses and is backed by Total and General Electric, last year landed a major contract with California utility Southern California Edison.
In 2011, Tesla and SolarCity — where Mr Musk is also chairman — were nearly alone in claiming incentives for on-site storage systems in California. Now, however, companies such as Coda Energy and start-ups such as Stem and Green Charge Networks are picking up hefty shares of projects.
Power systems can still be pricey for home owners. Mr Musk said a single-home residential battery of 10kWh would cost $3,500, but installation and an inverter to turn the battery’s direct power into alternating current used in houses could nearly double the cost, according to Lux Research.
Still, the market has great potential, in part because governments are mandating that more energy come from renewable sources such as solar and wind power generators. Valued at just $200m in 2012, the global energy storage industry will grow to $19bn by 2017, according to research firm IHS Cambridge Energy Research Associates.