Tesla founder Elon Musk has announced a new project that could get millions of people off the grid.
Musk’s increased interest in the emerging energy storage market has led to plans for a giant lithium-ion battery factory. Home and businesses owners could buy these battery systems for backup power or for managing solar electricity generation and use.
Musk, also of Space X and PayPal fame, said the designs for a residential or commercial battery are already complete and will likely be unveiled to the public "in the next month or two," with production potentially as little as six months away. Tesla already is working with SolarCity, which bundles Tesla’s battery systems with solar panels and markets them to consumers and businesses.
Tesla's battery and charging technology could significantly reduce electric bills. Although most homes draw energy directly from the electricity grid, the spread of cheap solar panels means homes can now generate their own energy. However, as of yet there is no way of storing the excess energy for later use or for sale back to the grid. Storing renewables efficiently has been a big bottleneck for consumers and utilities alike, but Tesla's stationary battery may change the way electricity is priced and traded on a market scale.
“There may be a 'tipping point' that causes customers to seek an off-grid approach,” Morgan Stanley said last year. “The more customers move to solar, the remaining utility customer bill will rise, creating even further ‘headroom’ for Tesla’s off-grid approach.”
California’s recent incentive program encourages utility companies to use energy storage. An advantage of Musk’s battery development is that utilities could use energy storage to bank solar and wind electricity when there’s too much of it and then discharge the energy from storage and into the grid when demand is high.
"A lot of utilities are working in this space, and we're talking to almost all of them," said Tesla's chief technical officer, JB Straubel. "It’s early-stage stuff and a lot of these projects are very far out since the procurement cycle for utilities is so long. But this is a business that certainly is gaining an increasing amount of our attention."
Energy storage technologies have become increasingly popular given this burgeoning market. California’s CalCharge initiative partnered large public companies Duracell, Volkswagen, LG and Hitachi with small private companies to provide high-grade science and equipment to accelerate storage innovation. Also, just last year a former Philip Morris cigarette plant switched gears to produce wind and solar farm energy storage batteries and Japanese corporation Sumitomo developed and installed the world's first large-scale power storage system that utilizes used electric-vehicle batteries.