As April expired, Elon Musk set off shockwaves with the announcement of Tesla Energy. They have yet to subside, and likely never will, as long as utilities are still powered by globally warming fossil fuels.
“The response has been overwhelming, OK? Like, crazy,” Musk explained in Tesla’s first-quarter earnings call in early May, which, although it was anchored by welcome electric-vehicle news, was nevertheless dominated by questions about Tesla Energy’s game-changing Powerwall and Powerpack solar storage line.
“In the course of, like, less than a week, we’ve had 38,000 reservations for the Powerwall and 2,500 reservations for the Powerpack, [which] it should be noted, is typically bought by utilities or large companies for heavy industrial work,” Musk said. “There’s no way that we could possibly satisfy this demand this year; we’re basically sold out through the middle of next year, in the first week. It was just crazy.”
“We had 2,500 requests from companies that want to distribute and install the Powerwall and Powerpack; we can’t even respond to them,” Musk added. “We have to triage our response to those who want to be a distributor. So it’s, like, crazy off-the-hook, and it seems to have gone super viral.”
Thriving On Stored Sunlight
To say this robust demand response to solar-powered batteries that offer utilities and homeowners alike an immediate off-the-shelf decarbonization alternative was expected would be selling Tesla Energy — to paraphrase Musk — like, super short. We’ve been waiting for an epochal energy change like this for decades.
After the Powerwall announcement, superlatives rolled in almost overnight, and not just from sunshine sector analysts (like, yours truly) who have been tracking Musk’s green future industries like Tesla, SpaceX and SolarCity — where the Powerwall is already hard at work in over 300 homes. That’s because even the most jaded of energy executives and journalists know that Musk’s Powerwall and Powerpack solar storage batteries are the last nail in the coffin of utilities — and their clientele — who run on dirty energy.
“What’s really needed to transition the world to renewable energy?” Musk asked in Tesla Energy’s riveting keynote speech. “With 160 million Powerpacks, you can transition the United States. With 900 million, you can transition the world.”
In order to transition all of Earth’s transport, heating and electricity generation needs, you only need 2 billion Powerpacks, which is approximately the same amount of cars and trucks we have on roads right now, Musk reminded — during an event in which was entirely “powered by batteries.”
“Everything you’re experiencing is stored sunlight,” Musk revealed to rowdy applause.
Solarizing Spaceship Earth
The list of companies that immediately signed on to Tesla Energy’s crusade to save the world from fossil fuels is no joke. And more are sure to come, as the economics flatten and the politics soften, bringing the sleek, wall-mounted $3,000-$3,500, 7- to 10-kilowatt-hour Powerwall within reach of those who haven’t even considered eliminating their lethal carbon footprints. Here are but a few of them:
New Zealand electricity network operator Vector, whose CEO Simon MacKenzie attended Tesla Energy’s announcement and later admitted that “this is the start of a significant change in the energy industry.”
Edison International, whose president of subsidiary SoCore Energy said that “this is an important, industry-changing development for the future of solar power.”
Agricultural titan Cargill, which is teaming with Tesla and PG&E to decarbonize a beef processing plant in Fresno, probably the first of many.
The College of Marin, which is claiming to be “the first community college in California partnering with Tesla to install the new stationary storage products on campus.”
Residential solar power player Sunrun, which is adding the Powerwall to its suite of options. “We believe the next evolution of solar as a service is home solar paired with storage and we look forward to adding Tesla,” explained COO Paul Winnowski. You and everyone else, Paul.
Indeed, “We look forward to adding Tesla” is a rallying cry that is sure to exponentially replicate as the Gigafactory warms up in 2016, and takes over Powerwall production from Tesla Motors’ overwhelmed Fremont plant. Although there are 2 billion Powerwalls needed to save humanity from its emissions, both Tesla Energy’s batteries and the factories that manufacture them are “infinitely scalable,” as Musk explained during the keynote.
“You ain’t seen nothing yet!” Solar Energy Industries Association spokesman Ken Johnson told me, quoting the classic Bachmann Turner Overdrive rock anthem. “Just as solar is now cost-effective for millions of Americans thanks to innovation and scale, storage is facing a similar growth pattern over the coming years. And, like solar, it’s happening fast. What’s more, as storage becomes more economic, it will be an enabling technology for expanding solar deployment nationwide, at both large and small scales.”
Achieving Escape Velocity
“Elon Musk’s vision of a truly distributed grid disconnected from the old fossil fuels-based, hub-and-spoke model is, of course, the future,” Green Alpha Advisors chief investment officer and cofounder Garvin Jabusch told me. “But there will be political obstacles from some of the existing traditional utilities, whose economics are not served by the transition. Yet as the economic competitiveness of the Powerwall — and maybe more importantly, the commercial and utility scale versions of it — get better and better, we will see the transition progress from early adopters, who are willing to pay a premium, to commonplace use and eventually ubiquitous adoption, to the point when this approach to power management has become far and away the most economically competitive way to power homes, businesses and the economy in general.”
Jabusch explained that economists see this momentous inflection happening when batteries can store power for under $150 per kwh — which will accelerate once the Gigafactory starts doubling worldwide production of lithium-ion batteries next year. It is also worth noting, since Musk himself has explained the Gigafactory is also infinitely scalable, that this timetable has not yet priced in even greater accelerations and developments.
Once Tesla Energy, riding more or less unanimous acclaim and consent, decides to build multiple Gigafactories to pump out millions of Powerwalls, the “insurmountable” quest to build 2 billion Powerpacks to transition Earth off of fossil fuels will comparatively seem like climbing an anthill. Especially if the factories themselves are running on renewables.
“Tesla’s approach of powering the Gigafactory with renewables, primarily solar and wind but some geothermal, means that the renewable energy economy has finally bootstrapped itself to the point where it is self-reinforcing,” Jabusch explained. “Musk’s big advance, or one of them anyway, is powering the next generation of renewable energy management with renewables, rather than with fossil fuels, which has been the case for most renewable energy applications until now. As this advance of creating the renewable economy with the renewable economy begins to snowball, the days of fossil fuels providing electricity, and then ultimately transportation energy, will begin to look not only dirty but also ridiculously expensive and uncompetitive.”
As these existentially optimistic developments are further unpacked over the next few months, we will all look back, some of us faster than others, on the current questions about Tesla Energy’s politics and economics as pole-vaulting the aforementioned anthill. It is no accident that Tesla — and by natural extension SolarCity, which also reported solid first-quarter earnings the day before its EV counterpart — are nevertheless booming on Wall Street and Main Street alike as an overweight economy deflates ahead of the next U.S. presidential election. Days after Tesla Energy announced its Powerwall, SolarCity closed a $500 million loan facility with Tesla bulls like Deustche Bank, which is reportedly the largest of its kind for distributed generation solar projects.
When even too-big-to-fail banks are lining up around the block to give Musk’s future industries, as well as its forward-thinking energy clientele, billions of dollars in support, you know the future isn’t far behind.
“Within the next 15 years, and maybe as soon as within the next five, we will come to see the question of whether renewables can reach so-called grid parity as quaint and even a bit ridiculous,” Jabusch concluded.
This article appeared at Solar Energy