Solar Roof Tiles

Tesla’s latest event was labeled as Powerwall 2 but the more interesting part of the event was when Elon announced a set of solar tiles for roofs.

glasstile.jpg

These new solar tiles are available in a few styles including a Tuscan style one in an orange color and more modern grey tile ones shown above.  All the styles are made of glass that are stronger than conventional roof tiles.  Elon claimed that installing or replacing a roof would be cheaper with these Solar City tiles than a conventional roof!

Elon also announced Powerwall 2 with twice as much energy storage than the first iteration, along with PowerPack 2 for the commercial market.

Powerpack.jpg

The goal is to have solar on your roof, a Powerwall in your garage, and a Tesla in your driveway.

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I have already had solar on my house for 10 years, and I actually have a flat roof where you cannot even see the panels.   My house is quite unusual, but if I had a conventional house without solar I would seriously consider these new panels.  I wonder if only Solar City can install them or can you buy them at retail stores like Home Depot?

Part of the timing of this event was clearly to influence the vote on the merger. My small number of Tesla shares will in no way influence the outcome, but I have not yet decided how to vote.

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New Options for Buying Power

The electric bill you receive is actually for two products:  the infrastructure, use and maintenance of the physical wires between your building and the grid, and the second is the actual energy you use.   My county is now following the lead of a group of cities and towns in Sonoma County by looking to adopt a community choice energy (CCE) program.  A CCE program allows municipalities to seize control of the actual costs of energy.  With a CCE program in Northern California, PG&E will still maintain the physical infrastructure and send the bills to the end customers, but the CCE will buy energy from 3rd parties.

Energy Cost

The graphic shows two parts of the energy bill.  The infrastructure part is the set of physical power poles and wires allowing you to charge your home, and billing the customers electronically or by snail mail.

The actual energy can come from a variety of sources:  nuclear, wind, solar, conventional power plants, and hydroelectric.  A CCE program would offer residential and commercial electricity customers new energy options, including higher renewable energy content at competitive rates. If formed, electricity customers in San Mateo County would be able to choose between Peninsula Clean Energy and PG&E as their electricity purchaser.

At the moment in Northern California, the only option for both services is PG&E (Pacific Gas and Electric), who owns the monopoly franchise for 2/3 of California from Bakersfield to the Oregon border.  PG&E rates are technically set by the California Public Utilities Commission (CPUC), but the company is a for profit enterprise.  The California State Legislature is currently looking at an overhaul of the CPUC.  One recent controversy was a very damaging environmental leak in Aliso Canyon (Porter Ranch) by the Southern California Gas & Co releasing over 150 million pounds of methane into the environment.  Methane is approximately 30 times more potent than carbon dioxide to trap heat.

Why is a CCE an interesting alternative?  Four main reasons make a CCE a positive choice for all customers.  Customers can now select from a variety of energy mixes.  They can choose to have a percentage of their electricity strictly from renewables.  Secondly a CCE is a non-profit organization not accountable to public shareholders seeking a return on investment.  Any surplus funds are reinvested in local renewable energy.  A goal of the CCE in San Mateo County will be to achieve greater greenhouse gas reductions and a sustainable energy future.  Fourth customers will have energy rates lower than current for profit PG&E rates as demonstrated today in Sonoma County.

I attended one of their public meetings and found the concept very positive.  At a simple level because this will be a non-profit organization, rates will be lower.  The county is also very interested in moving towards more renewable energy, and securing power sources closer to the county to reduce the amount of energy lost in long transmission.  The Tesla Powerwall as a possible addition to the mix was also briefly discussed in the meeting.

9 Years of Solar

I just recently got my annual true-up bill for the net metering for the year and I owe $237.80 for the entire year. I have had a set of solar panels on my house now for a full nine years.  For 6 1/2 years, I have been powering Teslas with the panels. The diagram to the right shows a summary of the annual electricity charge or credit.

Summary of Annual Energy Bills

Summary of Annual Energy Bills

Last year my bill was $80 less, but in 2014, I traveled across country in the Tesla for an extended period of time.

Panel Cleanliness Test

I have paid to have my solar panels cleaned in the past.  The roof is very high and quite a challenge to get to the panels.  I’m not particularly fond of the challenging maneuver from the ladder to the roof, so I’d rather pay a professional a modest fee when needed.  He uses a soft brush and de-ionized water.  But I can quickly monitor the cleanliness of the panels on line before making an appointment.

The amount of energy I generated in early October is the same as in 2014.  In the graph below I just do a quick comparison of the amount of energy generated during an interval on a sunny day during the same time of the year when there is little to no use of electricity.  The panels may be a little bit dirty due to the extreme drought, but some El Niño rains should soon wash away any  dirt.

Year to Year Interval Energy Production Comparison

Year to Year Interval Energy Production Comparison

Free Energy in 2017 Onwards

I have only two more years to recoup the initial investment.  This calculation is extremely difficult as the electricity rates are very complex and constantly changing.  I’m assuming unless things change drastically my energy will be free in late 2017.  The panels themselves have a 25 year warranty but the inverter is out of warranty.  I may incur a cost at some point due to equipment failure.

Powerwall?

Just recently, PG&E has managed to increase our minimum charges from just under $5 to a little over $10.  This monthly charge is our cost to be hooked up to the grid.  The only alternative would be an off grid solution which would be really challenging here as the solar production is so much lower in the winter due to the sun angle.    And the electricity use is relatively flat because the climate is so pleasant and the house well built and insulated, the air conditioner is only on a few days per year.  I have no use for a Powerwall.

Only two more years to drive and live on sunshine for free, or $10 a month.

Supercharger Abuse Notes

Elon Musk near the end of the Q&A section at the annual shareholder meeting accidentally created a bit of a PR challenge amongst current and future Model S owners.  The comment was as part of a response to a question on the battery swap program available near the Coalinga supercharger.

“So, free long distance forever is what the Superchargers are providing. There are few people who are like, quite aggressively using it for local Supercharging, and we also send them just a reminder note that it’s cool to do this occasionally but it’s meant to be a long distance thing.”  Elon Musk

Executives have always made confusing statements in front of people but now with video technology and the internet, these statements can cause more problems than before.

This small statement has lead to a ton of speculation on what Elon meant.  Few Model S owners are particularly worried that they will receive a note from Tesla, or that Tesla will begin to charge them for supercharging anytime soon.  The most interesting part of the discussion is what business model will happen down the road for more widespread EV adoption.

But here are a few of the many questions the confusing statement invited:

  1. What is supercharger etiquette?

Supercharging does have some etiquette guidelines.  The biggest error is leaving your car in a stall for a long time after the charging is complete.  Tesla’s web page states:

“How long can I park at a Supercharger?

We ask our customers to use courtesy while charging. Once your Model S has reached the range necessary to get to your next destination, please move your vehicle so other Model S owners can charge.”

With the Tesla app on the phone, you are notified when your car is charged.  In highly underused superchargers, at odd hours, or off-season, there is no rush to move your car.

2.  Exactly who are these supercharger abusers?

Busy Supercharger in San Juan Capistrano

Busy Supercharger in San Juan Capistrano

No one yet has come forward admitted to having received a note from Tesla.  The speculation mill has mentioned taxi drivers using a supercharger near the Amsterdam airport.  The other speculation is around a supercharger in Southern California.  The San Juan Capistrano supercharger is near the coast and has been very busy.

3.  Is supercharging only for long distance travel?

Superchargers were primarily built for long distance travel.

“Superchargers are used for long distance travel, conveniently located along the most popular routes in North America, Europe and Asia. “

4.  What about superchargers in more urban areas?

Yes, there are many superchargers in large urban areas such as Los Angeles and the San Francisco Bay area.  Tesla has also stated that they can be used for those without a garage or definitive parking space.

“..we’re putting Superchargers in cities, not just between cities. Amm, this is obviously important in places like, aaa…you know, Beijing, Shanghai, London, San Francisco, aaa…New York, aaa…where at times people may have a challenge with aaa…having a…a…a fixed parking space. I mean…so…so that’s maybe the wiring thing, it’s more like some of those people don’t have a definitive parking space. Amm, they might have street parking or something, you know.”  Elon Musk Q1 2014

There are also no definitive statements from Tesla that folks without garages cannot use superchargers for daily driving.  I myself have met 3 people who only supercharged for this reason.  One in a far flung ex-burb area in California and two in the San Francisco area.  None of these folks, myself or anyone else has heard that superchargers cannot be used for daily driving by any Tesla personnel before this statement by Elon.

5.  Can you save money by only supercharging?

Technically, you will save on your electricity bill.  But driving and sitting at a supercharger gets old fast and likely would pay less than a minimum wage; electricity is generally not that expensive, and much cheaper than an equivalent tank of gasoline.

6.  How much does it cost Tesla in energy for us to use their supercharger?

A reasonable average commercial flat rate for energy in California is $ 0.20 / kWh.  If a Model S is driven 100,000 miles at an average of 300 Wh / mile and only supercharged the cost to Tesla is $6,000.

100,000 miles * 300 Wh / mile * $0.2 / kWh * kWh / 1000 Wh  = $6,000

7.  What about other supercharger costs?

Tesla does not buy land for their superchargers.  They do however bring in the equipment and pay the construction and maintenance costs.

8.   Is Tesla tracking our every move?

Tesla can collect quite a lot of information about our traveling habits.  Their privacy policy does include this statement:

“Charging station information: We collect information regarding the charge rate and charging stations used by you (including outlets) in order to analyze which charging stations are being utilized, how long and efficient battery charges are, and where additional charging stations are needed.”

So yes, Tesla can know if you are charging at a residential location and at a local supercharger.

9.  Is supercharging using sustainable energy?

Rocklin Superchargers With Solar Panels

Rocklin Superchargers With Solar Panels

Elon did announce that superchargers will be charged with solar panels where possible; unfortunately the solar panel additions have been very slow and only a handful of locations have them.  Elon also stated at the 2015 shareholder meeting that all the extra electricity the superchargers use will be bought from renewables.

10.  Does frequent supercharging hurt the battery?

Supercharging in general does not hurt the battery.  But I have heard but cannot verify from multiple sources including within Tesla that very frequent or only supercharging does have a small amount of increased battery degradation.

11.  What about Vehicle To Grid Charging (V2G)?

The idea behind V2G is to use the battery’s charge to add capacity to the grid during peak usage hours.  Theoretically in the future, a Model S owner could go to the supercharger fill up the battery for free and sell the electricity back to their power company.  In a sense, using a Model S with V2G could operate like a Powerwall to play grid arbitrage.  V2G technology is not available yet.

12.  Will supercharging have a cost sometime down the line?

I feel it is quite possible that supercharging will have a cost sometime down the line for the 3rd or 4th generation of vehicles.  With the Model S, supercharging was an option for the 60 kW version and not available for the handful of 40 kW versions that were sold.

13.  Is supercharging sustainable with more cars on the road?

With Model S and the upcoming Model X at a high price point, the typical owner has significant resources and likely will not try to save pennies by abusing superchargers.

The next generation car is targeted to cost $35,000.  This car will be aimed at a different demographic that may consider it worth their time to save $10 for a fill up.  But more importantly many of these owners will likely live in apartments or condominiums without dedicated parking spaces.

Perhaps a different supercharging cost will occur for generation 3.  A lot of different charging models could take affect for a different class of vehicles.  Perhaps other car companies could use the superchargers and would be included in a new pricing model.

14.  Has Tesla changed their message?

There has been some heated discussion if Tesla has changed their message.  The message that superchargers are free forever has now subtly been changed to free for long distance travel.  Exactly what their message is today is not completely clear.

15.  So exactly what is supercharger abuse?

No one exactly knows the answer to this question.  A handful of people do use supercharging regularly even though they have a way to charge at home.  Perhaps Tesla considers these folks “abusers” ?

Fortunately just a handful of Tesla owners feel it is their right to supercharge whenever and wherever they please.  One colorful blogger wants to use a close to home supercharger near his home in order to get back at his electric company by charging at the supercharger tied to the same electric company.  In every group of people, there will always exist a few who will try to maximize their advantages in a given system without much consideration for others.

Summary

The real question goes beyond the Model S, Model X, generation 3 and Tesla:

How do we facilitate wide EV adoption amongst drivers who do not have a dedicated place to park their car?

Perhaps Tesla’s statement should for the supercharger should be something like:

Charging at home is very convenient, inexpensive, and easy.  Superchargers are free forever for road trips.  If you have problems charing regularly at home or work, feel free to charge at a convenient supercharger,  but please be considerate of other drivers.

2015 Shareholder Meeting

I attended today my first Tesla shareholder meeting. For somewhat bizarre reasons, I did not become a shareholder in Tesla till last year when I bought some shares.  The amount is quite small (far less than 1% of my net worth) and has no bearing on the honesty of my blog.

Unlike traditional dull shareholder meetings in the past, this meeting was quite enjoyable.  The business part was over quickly and included a warm thanks from Elon to the retiring CFO.  Elon gave a short overview speech and answered about 10-15 questions from the audience.

After the official meeting, I went to charge my car at the new supercharger located in the parking lot.  As I was chatting with a fellow shareholder I met at a supercharger in Oregon, I noticed the CTO JB Straubel talking to some owners.  I took the opportunity to join in the conversation and ask some questions myself.

Model S / Autopilot

Elon mentioned that Teslas (not 100% sure if Roadsters are included) have been driven 1 billion miles as of today June 9, 2015, and that the new 70D is about 1/3 of Model S sales.  Elon has been testing the autopilot features and will be released to Beta customers by or near the end of the month.

Model X

Elon did say the Model X is coming in 3 to 4 months and had a photo of it on the screen.  I think the following quote is quite telling:

“The Model X may be a better SUV than the Model S is a sedan”.

Powerwall

Both Elon and JB expressed dissatisfaction with the current information available about the Tesla Energy products.  Elon announced that the Powerwall now has a significant increase in power output making it a more usable solution for backup power in case of a power outage; a typical home can now run everything except air conditioning.  Price with install for an existing solar customer will be $4,000.  They are prioritizing deliveries to existing Tesla customers with solar.

I asked JB about the huge interest Tesla is seeing for the Powerwall as my return on investment with existing solar is 18 years.  He said there are very specific markets:  Germany, Australia, and South Africa where the economics make sense. He also mentioned the large interest in the Powerpack product for utilities. If they need to expand, they can add Powerpacks to existing substations.  This advantage saves physical space and wires.  JB mentioned keen interest among specific utilities.

Superchargers

The new Mountain View supercharger was opened up.   I charged at my 86th supercharger today.

New Supercharger Cable

New Supercharger Cable

Tesla had representatives hanging around to talk to the customers.  The only real difference now is that the charging cable is liquid cooled, flexible, thinner and lighter.  The cable is the same width as the one we use at home.  In California and warmer climates, the existing supercharger cables work fine, but in colder climates the existing cables can get very stiff.

These cables will support more voltage than today’s cables.  So eventually we will be able to charge above 120V.

Elon clarified that superchargers are really for long distance trips.  He acknowledged that there are some people using them for daily driving, and mentioned that a few are getting notes to that effect.  An owner can technically and legally use only superchargers for daily driving.

Elon did say that eventually all superchargers would be powered from renewables.  Where possible and appropriate they will have solar panels, or they will buy electricity from other renewable sources.

Battery Swap

Tesla does not think there is much interest in battery swapping.  The initial 200 people that were invited to the Beta of the station at Harris Ranch, only 4 or 5 swapped their batteries and only did it once.  Tesla has now invited all the owners in California, and they are receiving about the same amount of interest as the initial group.

Space X

A shareholder asked Elon if SpaceX will ever go public as he wanted to own the trifecta of Elon’s companies (including Solar City).  Elon said that wall street lives quarter to quarter and that model does not work with long times for launching rockets.  He said that “Space X will go public once they have regular flights to Mars”.

Conclusion

The shareholder meeting was quite an enjoyable event.  Listening to Elon and his clear vision of “sustainable transport” and a few interesting tidbits was well worth the short drive.  The extra treat was to be able to ask a couple of questions directly to the CTO.  Just being around two very intelligent people doing interesting and valuable things is inspiring.

Powerwall Ban in Spain

The Spanish government has already effectively banned the Powerwall in Spain.

This post is bilingual written first in Spanish and then followed by the English translation.

En España, la situación con el Tesla Powerwall es probablemente la peor en el mundo.  Aún antes de poder comprarlo, la OCU, que es una organización del gobierno supuestamente de los consumidores y usuarios, ya ha declarado que el Powerwall solo se puede instalar en lugares que ya tenían paneles solares y no están conectados de la red eléctrica.

El sistema eléctrico es muy diferente en España que en EE.UU. o Alemania.  Aquí en EE.UU. tenemos los monopolios locales pero el gobierno tiene un poco de control.  En Alemania  el treinta por ciento de la energía es renovable.  En España solo tres empresas controlan el  sistema de la electricidad con los combustibles fósiles.

Con un clima soleado y zonas con grandes vientos, el gobierno en España ha parado las instalaciones renovables.  También una persona que quiere generar electricidad tiene que pagar un gran canon. A la mayoría de los ciudadanos no se les permit desconectarse de la red eléctrica; tiene que vivir en un lugar aislado. Tampoco se permite vender a la red la energía sobrante de los paneles solares.  

En 2013, hay una manifestación contra el sistema eléctrico y el aumento de los precios.  El gobierno recientemente ha restringido las manifestaciones; se tiene que obtener un permiso.  La policía saca fotos de los manifestantes.

Afortunadamente el uso per cápita es má bajo en España que en EE.UU.  La gente no vive en un gran casa o conduce tanto. Espero que el gobierno conservador cambie su actitud sobre el medioambiente.

In Spain, the situation with the Tesla Powerwall is probably the worst in the world.  Even prior to being able to order much less purchase a Tesla Powerwall in Spain, the OCU, which is a government organization supposedly of consumers and users,  has already declared that the Powerwall can only be installed in places already with solar panels and not on the electrical grid.

The electrical system in Spain is very different from the United States or Germany.  Here in the United States we have local monopolies but they are at least marginally controlled by the government.  In Germany, thirty percent of the power is from renewables.   In Spain three large companies control the electrical system largely using fossil fuels.

With Spain’s largely sunny climate and areas with heavy winds, the government as put a stop to installing renewables both at the industrial and individual level.  Large tolls are charged for those who want to generate their own electricity.  The government will also only let you be off grid if you are in an isolated place that is too expensive for one of the three companies to reach your location.  The electric companies also will not buy back any energy from a private producer.

In 2013, there was a large demonstration against the current electrical system and the rising rates.  The Spanish government has also recently started restricting protests;  they require any protests to get a permit and then record the photos of all the protestors in a database.

Fortunately the per capita use of energy is much lower in Spain than the U.S.  People do not live in large houses and drive as many cars.  I hope that the conservative government will change and begin to listen to the voice of the many Spanish citizens who are concerned about the environment.

Powerwall – A Middling Product

Powerwall in Relationship with a Model S

Powerwall in Relationship with a Model S

A few weeks ago Tesla announced a new product line for homes and businesses, the Powerwall. I like many other Tesla supporters applaud Elon’s mission of “moving away from fossil fuels”.  I’m excited about the Tesla Gigafactory, which is being built in Nevada to make batteries, because it will enable Tesla manufacturer their own car batteries.  I have researched the three different uses of the Powerwall for the homeowner:  emergency power backup, grid arbitrage, and enabling a household to be disconnected from the grid.  But after a fair amount of research, none of these potential reasons are particularly robust motivators to buy a Powerwall. I am hopeful but not particularly knowledgeable about the economics of this battery technology for industrial applications.

I do not think the economics of the Powerwall will work for the vast majority of homes.  One of the largest un reported issues is the variation in solar production throughout the year in the northern hemisphere — a fact that curiously the vast majority of media responses have not mentioned.  This huge fluctuation in the rate of renewable energy generation is a problem outside of the new Tesla product. But these fluctuations put a stop to most use of the Powerwall to enable someone to go off the grid completely.  The Powerwall however may enable an already off grid home to offset some use of fossil fuels.

The use of the Powerwall for a backup power source is not particularly cost effective or robust, and in most locations better served with a generator.  The final use of the Powerwall is to make money with grid arbitrage: buying or making power at lower rates and selling power at higher rates.  At a quick glance the arbitrage game may look appealing, but careful analysis looks like in most places with tiered rates, the return on investment is close to ten or even twenty years.

This blog post will discuss in details my conclusions beginning with the problem of the large variation in renewable energy generation throughout the day and year.  Then, the post describes the technical details Powerwall, how energy is sold in the US, and finishes describing how the Powerwall works with the three usage scenarios:  emergency power backup, grid arbitrage, and off-grid home.

Variable Renewable Energy Generation

As everyone knows including animals, the sun simply does not shine all day long.  So solar power only generates energy during the day.  Here is an example of my energy use on Sunday May 24, 2015.  Both Saturday and Sunday nights at 10pm, the Model S used a lot of energy.  Minor amounts of household energy use occurred throughout the day.  Between the hours of 9am to 6pm, the solar panels generated energy up to a rate of 0.8145kWh per fifteen minute intervals.

Typical Daily Energy Use Pattern

Typical Daily Energy Use Pattern

On May 24 the local power company Pacific Gas and Electric (PG&E) reported the household energy use (minus production) was 21kWh (to be compared to the Powerwall’s 10kWh and 7kWh capacity).  The energy use varies wildly and largely based upon how much the car needs to be charged.  My energy use is typical with the average household in the U.S., but the average household is not powering a Tesla Model S.  In reality my household electricity use is lower than average even with the Tesla.

The next part of the story is to look at the variation of energy generation on a typical solar panel throughout the year.  Although I have never collected the data straight from the solar panels, I can show you the chart for the year I first installed the solar panels and did not have an electric car for 10 1/2 months; that solar year was from May 2008 to April 2009.  Tesla delivered the Roadster in March 2009.

Typical Energy Generation Throughout the Year in the Northern Hemisphere

Typical Energy Generation Throughout the Year in the Northern Hemisphere

The variation below is for a climate that is 37.5 degrees North of the equator.  This seasonable variation problem would be much less closer to the equator.

Looking at the chart, the usage swings dramatically.  During the summer months (approximately April through September), the solar panels generate large amounts of energy.  During the “winter months in California” (approximately October through March), the solar panel output is dramatically lower.  During the winter months such as January with weak sun because of the latitude more than the amount of sunny days, the usage per month was 341kWh.  Seven months earlier and closer to the sun, the usage was -214kWh.  I could somewhat accurately estimate the amount of actual household usage per month, but it would only be an estimate.  During this year, I produced more electricity than I used and gave away the electricity back to the grid; I gave the electricity back for free as the law in 2009 did not require the monopoly energy company to pay me back.   Now the law requires them to buy excess energy for 3 to 4 cents / kWh.

The household energy use is pretty consistent throughout the year.  Although there are two air conditioning units that run on electricity, they have only been used an average of three days per year and only for a few hours.  The weather here does not get that hot, and the home was designed to match the climate with large overhangs that keep the sun away from the indoors during the summer, and clearstory windows that cool the house down in the evening during the warm months.

Managing the Electrical Grid

Environmentalists typically do not like to talk about the spikes in energy generation in renewable energy.  Everyone finds it hard to talk negative about something they are strong advocates for.  Solar power can only generate energy during the day and not the night.  Wind turbines can only generate energy when its windy.  Turbines powered by waves on the ocean floor also are not consistent flat energy producers.  To some extent in some climates, these different energy sources are on at different times.  Traditionally in California it is windier in the winter than in the summer, although this May has been consistently unpleasantly windy.

Hydroelectric in most instances is considerably more consistent than solar and wind providing a more even power source throughout the year.  Old natural gas, coal and nuclear plants can not be turned on and off quickly.

Since renewables are unfortunately not yet widely installed, these problems have not hit the surface in the U.S.  Germany’s renewable sources of energy are now at 30% and they have managed to supply power to its users in an even fashion.  Their coal power plants can turn off on an hourly basis when not needed and their electricity grid is robust.  But the grid in California is not yet as fine tuned as the German one.  Renewables just add more complexity to the problem of managing the electrical grid at a large scale.

Tesla’s Announcement

Tesla announced three products:

  1. 10 kWh Powerwall for the home for $3,000.  The 10kWh version is built to be only cycled on a weekly basis and used for emergency power backup.
  2. 7 kWh PowerWall for the home for $3,500.  This version can be cycled on a daily basis and used for grid arbitrage and emergency power backup.
  3. Powerwall for businesses and utilities. Tesla has not provided much information to the general public about the larger scale uses of the Powerwall.

Tesla lists a single weight of 220 lbs / 100 kg for the Powerwall and a size  51.2” x 33.9” x 7.1” / 1300 mm x 860 mm x 180 mm.  The Powerwall has an environmental temperature requirement of -4°F to 110°F / -20°C to 43°C.

Inverter Need

The Powerwall is simply a battery.  You cannot simply buy a Powerwall and plug it into you home, you will also need an inverter which costs on the order of $2,000.  Batteries and solar panels supply DC current but household current is AC.  The inverter converts the DC current to the AC current.

Every existing solar installation has an inverter.  I am hopeful but unsure that all older solar inverters are compatible with the new Powerwall.  My solar inverter was replaced under warranty and is several years old.

Operating temperature

The operating range maximum temperature is 110 degrees Fahrenheit.  Very hot climates such as the desert southwest likely have energy usage that more closely matches the solar panel generation than the San Francisco Bay Area.  During the hot summer months, many households in the desert are likely running the air conditioning for most of the day. The temperature limitation of 110 degrees Fahrenheit would require the relatively large Powerwall to be stored in a somewhat cool location – likely not a simple garage or outside wall in the desert.  The unit itself is large and over 200 pounds.  Most larger homes likely have sufficient wall space in a garage or electrical room for at least one Powerwall.

Installation Costs

Because the Powerwall is a large heavy battery weighing over 200 pounds, you will likely need to hire someone to help you install it.  Many localities will require building permits when dealing with electrical changes to your home.  SolarCity will install a Tesla battery and an inverter in your home outside of solar for $7,140. Regardless of the location or situation, a Powerwall with or without an inverter will have a non-zero installation cost.

The Energy Monopolies

Home power suppliers in the United States are monopolies.  They are regulated by the state government.  My local power company PG&E serves most of Northern California.  Their rate schedules are quite complicated and changes on a somewhat regular basis.

Energy Rate Schedules

The energy rate schedules are complex.  Currently PG&E has eight different time of use (TOU)  rate schedules for homeowners; they also offer traditional non TOU rates.  In any given TOU schedule there are rates for the summer months and different rates for the winter months.  Summer has three different rates:  peak, off peak, and partial peak. The winter rates do not have a peak rate only a partial peak and a off peak rate.The time of the day determines peak, off peak and partial peak; but weekends rates are different than weekday rates.  The final bill is determined by how much energy you use in the total peak, off peak and partial peak periods.

The idea behind TOU is to charge people more who use excess energy but also charge people more during peak demand times.  For example on very hot days in the summer, millions of people are running their air-conditioning causing the electric grid to run out of energy.  The TOU incentivizes people to shift optional electric tasks such as laundry towards other times of the day.  I have a friend who shifted to a rate schedule that seriously penalizes peak demand usage but has inexpensive rates the rest of the day.  To survive in the warmer climate they live in, they blast their A/C during the cheaper rate period, and turn it off during the premium times.

Today most solar customers have TOU schedules that match historic usage patterns.  But these historic use patterns are shifting as commuting and lifestyle patterns change and more solar panels are installed.  Potentially in the far future as more and more people have installed solar, the rate schedules may change because of the large spike of solar generation in the middle of the day when many homes are unoccupied.

Uses for the Powerwall

Emergency Backup Power

The 10kW battery power is reasonable backup power for a home in California for about a day.  This backup power source would not work to charge an electric car but could keep the refrigerator and a reasonable number of lights and electronics for a day.  Many households use a lot more than 10kW per day, but these larger use households are likely running air conditioning in very hot climates or have large amounts of electronics.

In my local area in California, a new version of transformers has generally reduced the number of power outages and length considerably over the past five years.  Perhaps once or twice a year, we have power outages but are typically back up within 30 minutes or worst case a few hours.  Here in CA, power outages are not a big deal.  We have learned to not open our refrigerators and take the time to disconnect from the internet.

For a business situation or for someone working at home, emergency backup power will be more important.  But I remember fondly the occasional power outages when working in Silicon Valley; sometimes unexpected disruptions to daily routines can be enjoyable if not too frequent.

People living in much more extreme climates and rural conditions can have their power off for days.  The small size of the Powerwall does not make it a good choice for running a typical home for several days as 7kW or 10kW is not a lot of energy; perhaps you could use the Powerwall to save the food in your refrigerator but not to recharge your Tesla Model S.

The competition in this space is a simple gas generator that you can get for around $1,000 in the 7kW to 10kW range.  Generators can be refilled quickly with more gas and are portable, which expands their usage.

Grid Arbitrage or Load Shifting or Time of Use Offset

A potential use for the Powerwall is to save or buy power when it is cheaper, and then use it when the electric company charges higher rates.  There are various terms for this money game:  grid arbitrage, load shifting or time of use offset.  This financial game can be played with or without a solar system.  You can buy or generate power during off peak times, and either use or sell back the power during peak times.  With low energy households, the household energy use must be at least 7kW / day or the payback calculations can get even more complex.

Determining the final financial benefit of this approach is very difficult for most homeowners.  Some states such as Massachusetts and Washington sell electricity at the same rate throughout the day so grid arbitrage is not available. In Northern California, we have tiered rates throughout the day and throughout the year.

In Europe different countries have different approaches to renewable energy.  Germany is leading the way with 30% of its energy is in renewables.  Spain on the other hand is stopping all renewable projects even with their abundance of sun and wind. My next post will describe the unique situation in Spain.

Personal Grid Arbitrage

I decided to run the numbers to see if I could make any money with a Powerwall.  During six months of the year, I am selling power to PG&E and banking energy to PG&E.  Getting very clear information is challenging but I can show the household’s energy usage for the last seven largely “winter” months divided into peak, partial peak and off peak usage.   This net energy metering (NEM) charges shows that I never buy peak power.  Even during the shoulder months of October and May I am generating enough power with solar during the peak periods.

New Usage Report from PG&E

New Usage Report from PG&E

Each rate schedule has a set of tiered rates.  The baseline on the San Francisco Peninsula to stay in tier 1 is 10.9k Wh / day.  They use this number and multiply it over the entire billing period so days when a car is charged averaged with all the days of the billing period.  For most periods of the year with solar panel energy generation, the house and car never exceeded the baseline tier 1 quantity.  I did find a few shoulder months where the data shows a small amount of tier 2 and tier 3 energy during October and November.

Rates for October of 2014

Rates for October of 2014

October is considered a summer month for electricity but the solar panels were still pushing energy onto the grid during the peak and partial peak rates.  In November, Tier 1, Tier 2 and Tier 3 rates were all in effect with 8.5% of the energy in partial peak.   With my E-6 rates, the difference in the summer months for all tier rates between peak and off peak usage is 19 cents / kWh, and the difference in the winter months is 1.6 cents / kWh.

Ideal Grid Arbitrage Savings

I took the time to figure out how much money the Powerwall could save me if I played the grid arbitrage game in an ideal scenario.  If I bought power at off peak rates, filled up the Powerwall, and either use that power during peak times or sell that power back to PG&E at peak rates.    I am assuming but am unsure that I will be able to buy power from PG&E, store it in the Powerwall and sell it back to PG&E; many days such as vacations or when the car is not charged I doubt the household always uses 7 kW / day.  In this scenario I am not considering any loss of efficiency, assuming my current inverter works seamlessly, a $500 installation fee, a system with no lifetime functional problems, and no opportunity cost for my dollars not in the bank.

Powerwall Payback in 18 Years or More

Powerwall Payback in 18 Years or More

During the weekday in the summer, I can net 0.192 dollars per kWh and 0.077 dollars per kWh on the weekend.  During the winter those same two number drop down to only 0.016 and 0.  Only with very minor exceptions, do I leave the Tier 1 rates.  Multiplying this out on a yearly basis, the net game is only $217 per year or 18 years to payback the initial costs in an extremely ideal scenario.

A number of articles have reported that with PG&E you can play grid arbitrage with a rate difference of 30 to 40 cents / kWh.  But using this number is not accurate because it assumes you can shift from a Tier 5 peak rate down to a tier 1 off peak rate.  These styles of estimates are extremely “optimistic” assuming someone is a very heavy electrical user consistently in the Tier 5 rate can consistently push the purchase down to a Tier 1 rate.  In this extreme situation their payback for the Powerwall could perhaps occur in under 10 years, but they would be better off helping the environment by adding more solar panels.

Off Grid

The dream of many environmentalists is to live off grid.  The Powerwall is not the tool to enable off grid living.   As I mentioned earlier, the solar energy production varies wildly during the year in the United States.  This problem would not exist along the equator.  But in the U.S. to go off grid with the Powerwalls would probably fill an entire house and / or double the solar capacity.

The Powerwall could help with an existing off grid situation.  During the day in the summer months the solar panel excess energy could be saved for electrical needs at night.  One or a number of Powerwalls could be used in order to not use the generators and fossil fuels during the summer months in the evenings.

Conclusion

I still admire Elon Musk’s efforts to combat global warming and am looking forward to hearing about progress on the Gigafactory.  Unfortunately, I cannot give this product a rave review because today the economics of the Powerwall do not make sense for most homeowners outside of a few exceptions.  I’m hopefully that Tesla Energy will be successful in the commercial market with their battery solution.

Tesla Image of a Commercial Scale Use of the Technology

Tesla Image of a Commercial Scale Use of the Technology