how tesla\'s new powerwall battery will save consumers money on electricity

According to a recent article in Forbes, Tesla (NASDAQ:TSLA)
The new Powerwall battery \"is just another toy for the rich green \".
Of course, Powerwall, like sports cars and Model S, will attract those early adopters who have extra money to spend, who want to reduce their dependence on the grid or on the environmental footprint.
But, as I will show, Powerwall is also a compelling investment opportunity for homeowners who want to save electricity for a long time.
I think it is possible for investors who classify Powerwall as niche products to underestimate Tesla Energy\'s contribution to TSLA valuation.
TSLA is expected to be a key player in the global energy storage industry, and ihs cera expects to grow to $19 billion by 2017.
In addition to environmental benefits and peace of mind with the backup power supply provided by Powerwall, it is also economically significant to have Powerwall in some states.
In states where the numbers have not yet been added up, there are several reasons to believe that they will do so soon: 1)
Rising electricity prices; 2)
Construction of Geely factory and reduction of battery cost; and3)
Net measurement fell in the United States. S.
I will save the details of these three points for subsequent referenceup article.
Now let\'s take a look at the economics of Powerwall and see how we can save up to $0.
Power is 17 degrees per kilowatt hour used from Powerwall, not directly from the grid.
TSLA\'s recently launched Powerwall battery will come in two sizes: 3000 at $7 KW and 3500 at $10 KW.
According to the published specifications, the model at 7 KW hours is designed for daily riding, while the model at 10 KW hours is designed for standby purposes and is designed to cycle once a week.
Both can produce 2 KW and 3 in a row.
During peak use 3 KW.
For this analysis, I will focus on the model at 7 KW: This model can be used to store the power of the solar photovoltaic system for later use, or when the price rises, can be used to store electricity from the grid because it is cheap
That is the so-called energy arbitrage.
Elon Musk has revealed the price of the battery itself, but how much does it really cost to use the power Wall\'s energy at 7 KW?
Ramez Naam did a good job of breaking down the cost of Powerwall: Considering that the TSLA battery is less than 10-
Annual warranty and assume they can be fully cycled (7 kWh per day)
, The cost of using Powerwall can be broken down to about $0. 12/kWh.
The assumption of cycle at full 7 KW is reasonable, because as Naam pointed out, the Powerwall battery may be a 12 KW mAh battery designed to discharge 60% and no longer discharge
This discharge limit increases the life of the battery.
The 10-year daily cycle will bring the battery life to 3650 cycles, which is great but definitely possible.
In addition to the cost of the battery, it also involves the cost of installation. SolarCity (SCTY)
Recently announced that it will be at 9-$5000-
Annual lease, or $7140 for direct purchase and installation.
In the first case, it is conservatively assumed that the price is similar at 7 KW, which will increase our total price by about 50% (
10% loss of 1 year due to use, 40% loss of installation costs), to $0. 18/kWh.
In the second case, our price will basically double to $0.
24/kWh, but it is also possible for us to continue using the battery after a dozen hours
Annual warranty period, can reduce the total cost of operation.
Please note that you may pay $0 if you happen to have a solar PV system installed. 15/kWh (
This is the cost of power generated by SCTY from its system).
As a result, the power stored using Powerwall generated by photovoltaic systems takes about $0. 32/kWh.
According to EIA, the average electricity price in the United StatesS.
March 2015 was $0.
123/kWh, well below our $0.
Battery Price 18/kWh.
But what about the most expensive state?
In addition, the variable pricing scheme (
That is time. of-use pricing)? Several States
New England, Connecticut, Massachusetts, Rhode Island-
The average electricity price is above $0. 20/kWh (
Please see the EIA link above).
The price in Hawaii is much higher than $0. 3085/kWh.
California and Alaska are just under $0. 1718/kWh, $0.
1931/kWh, respectively.
In these states, the use of solar photovoltaic power generation is economically significant because the cost of power generation is lower than the electricity price of the grid.
However, unless the peak electricity price is higher than $0, it makes no sense to combine the battery with the solar photovoltaic system. 32/kWh (
If net metering is not selected).
Use Powerwall with grid-
Unless the spread between peak and offline, the power supplied is meaningless
The peak price is greater than $0. 18/kWh.
If we look at the price of Edison in Southern California, we will find out how the power wall can make financial sense without solar photovoltaic power generation.
Utilities charge $0.
46/kWh in summer, $0.
36/kWh in winter (
Between 2 and 8 p. m. ). Year-
Round, $0.
11/kWh overnight (between 10 p. m and 8 a. m. ).
This represents a spread of $0.
35/kWh in summer, $0.
25/kWh in winter.
In this case, Powerwall could be a compelling investment.
In the above example, charging Powerwall overnight will cost $0. 11/kWh (
Edison in Southern Californiapeak price).
Then it will cost an extra $0 to use the power supply. 18/kWh (
Based on the previously derived Powerwall operating cost estimation).
So in this case, the total cost of using power from Powerwall is $0.
29/kWh, below the peak price of $0 in summer and winter. 17/kWh and $0.
07/kWh, respectively.
This means that Powerwall can save you $0 if you are a customer in Edison, Southern California.
17/kWh in summer, $0.
07/kWh winter.
Powerwall is not just a novelty toy for the elite, it is a smart and accessible investment for the average homeowner.
Disclosure: The author is long TSLA, SCTY.
The author wrote this article himself and expressed his views.
The author was not compensated (
In addition to Seeking Alpha).
The author has no business relationship with any company mentioned in this article.