Networking & Cables

Is Tesla Powerwall a Good Investment?

Total costs for Elon Musk’s Tesla Powerwall with solar panels can run between $14K and $23K fully installed. Is it worth it for your clients?

Is Tesla Powerwall a Good Investment?

CE Pro Editors · October 9, 2017

With going green becoming a big trend in home owning, there are a lot of options for your client on how to generate and help with power. The Tesla Powerwall from business magnate Elon Musk is hyped as one of the next big steps to building a zero-emissions home. But what exactly is it, can you sell and install it, and most importantly is it worth it for your clients?

The Tesla Powerwall is marketed as a “rechargeable lithium ion battery with liquid thermal control” and is aimed at the residential energy storage market.

So is a battery designed for day to day usage for a home a good way to help take control of your energy bill? The Tesla Powerwall is ideally designed to be paired with a solar array. It can be powered when the solar panels produce more than your usage and can be drawn from at night when the solar panels are off.

Does this mean your clients can ditch the grid altogether? No, not with a standard system. 

When you sit down with your clients, they need to know exactly how much they spend per month in electricity to calculate the ROI.

The average home is uses 10,000 kWh per month. A single Tesla Powerwall 2.0, which runs around $5,500, is only meant to store enough power for a few hours, ideally on cloudy days or at night. So it would take a significantly larger investment for your clients to have enough power to live off the grid for several days or weeks. In addition, solar panels would only recharge the battery on a clear days when the sun is at its apex.

Another consideration is the diminishing capacity of the Powerwall. Over time, just like all batteries, the Powerwall will lose its capacity as it charges and drains over and over again. Therefore, the battery has a limited lifespan and will lose its ability to hold a charge. Tesla offers an unlimited 10-year warranty, but it is a costly proposition to have to replace the unit every 10 years.

Finally, the $5,500 price point does not include your installation fees. Tesla claims installation costs should run between $800 and $2,000 depending on market location and labor rates.

Plus, remember the Powerwall is designed to be installed in combination with a 5 kWh solar panel array (only half the monthly usage needs for a typical U.S. home). Whether an integrator installs that on his own or partners with an electrician, it will run your customers between $8,500 and $16,000 depending location, according to the website Energy Sage.

So, Let’s Do the Math

The installation of a single Tesla Powerwall 2.0 with a solar array can cost as little as $14,800 and as much as $23,500, with a seemingly 10-year lifespan for the battery portion, meaning an incremental $7,000 cost each decade (if your clients plan to live in their home that long).

When you sit down with your clients, they need to know exactly how much they spend per month in electricity to calculate the ROI. The average monthly electricity bill in the U.S. is $114.03, according to the U.S. Energy Information Administration. But remember, the average home uses 10 kWh per month, so that means to go totally off the grid a home would need to spend $17,000 to $32,000 on solar arrays. 

So, it could take about 28 years to payback the cost of a full installation. Of course, utility rates will continue to rise so that would conceivably reduce the ROI time. But, that does not account for the possibility that the Powerwall might need to be replaced, since it is a battery after all. 




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Comments

Posted by Graham on October 12, 2017

Automatedhome is correct regarding figures. They do not make sense either for energy or $ .

Electrical energy is measured in Watthours (Wh) or kWH (kiloWatt hours) which is work. Work is Power over time.

Power is measured in Watts (W) or kW(kiloWatts) or MW (MegaWatts) and is an instant reading.

It’s not hard to differentiate Power and Energy terms. They are distinctive terms thus avoiding confusion when one talks about it. But many people use it in the wrong sense and will not make sense when the numbers are blabbed out.

Anyway, in Australia, the Powerwall 2 will make financial sense because in my case, I pay $0.48/kWh for peak energy between 1pm-8pm. Shoulder rates are at $0.27/kWh and Off peak rates at $0.19/kWh.

Aussies have one of the highest electricity rates in the world. Tesla is right to ship Powerwalls to Aussie markets because there is an immediate financial rationale to do. The payback period can be as short as less than 5 years, shorter if the trend that electricity rates will increase 20% per year.

In the US markets where electricity is cheap, it is very hard to justify the payback period. It really is an environmental decision more than financial. But in Australia, it will be both finanical and environmental that favours the Powerwall purchase.

Some argue that there better systems. Sure, but you will pay more for them. Lithium based chemistry at the moment is the best way to do it and Tesla’s Powerwall has the best value for kWh storage and overall specs. I’ve looked at 4 already - Tesla’s, Sonnen, Enphase and Redflow. Tesla’s pricing in Australia hits the sweetspot with its specs in Australia.

Posted by Harald Steindl on October 11, 2017

Indeed it is partly an emotional sell as is EVERYTHING we buy these days.
Or do you really buy the cheapest roof chingles you can find? Or the cheapest of all available chairs or the cheapest house you can find? Dont even let me get started about clothing, food and cars.
It constantly amazes me, that still the majority of people go 100% rational with energy related investments whereas the very same people act very emotional on almost every other purchase.

And btw, NO, I am no Musk fanboy at all.as there are countless better systeme out there; at least over here in Europe..

Posted by pat ultramedia.biz on October 10, 2017

I had SolarCity (another Elon Musk company) give me two different estimates for a 2100 sg ft home in Texas. I pay .09 per kWh. With a Powerwall it would have been 22 years to break even. At the end of twenty years the lease would have ended with old tech on my roof that I would not own and did not include having to replace the Powerwall twice which would increase the payoff to about thirty years if electricity costs remained constant. However maintenance on the system was included throughout the lease period. Also the estimate they gave me did not replace the connection from the electrical grid, no far from it. It only ‘supplemented’ my having to pay for power from the utility company. It also did not include a proper disconnect so if the grid needed service or went down, like in the hurricane in Florida, I could not use my solar panels as a standalone system.
When they said ‘so when would you like us to start? Just sign the online contract and we should get you done in the next five months give or take two months’ I just laughed out loud and said ‘I don’t feel that guilty about existing on this planet’ and ‘does the fact this makes no financial sense mean anything to you in your sales pitch?’ The sales guy said many tell him that this would be helping the planet so they do it anyway.

So selling to emotional, not a reasoning, client is their play. Wow.

Posted by Jason Knott on October 10, 2017

@automated home—Thanks. I had some extra zeros in there. I have corrected.

Posted by automatedhome on October 10, 2017

Hi - thanks for taking a look at the Tesla Powerwall.  Couple of points.

1. You twice refer to 10,000kWh / month as the average home consumption. That can’t be right, I’d guess more like 1,000kWh ?

2. You refer to a “5,000 kWh solar panel array”. Do you mean a 5kW array?

3. Domestic batteries should also be considered to enable home owners to buy electricity at cheap rates (night time) to use at a time when it’s more expensive.

4. Because of 1 & 2 I think your calculations are a bit meaningless. Although the spirit of your piece (ie domestic batteries probably aren’t going to save you any money yet) is correct.

Thanks

Posted by automatedhome on October 10, 2017

Hi - thanks for taking a look at the Tesla Powerwall.  Couple of points.

1. You twice refer to 10,000kWh / month as the average home consumption. That can’t be right, I’d guess more like 1,000kWh ?

2. You refer to a “5,000 kWh solar panel array”. Do you mean a 5kW array?

3. Domestic batteries should also be considered to enable home owners to buy electricity at cheap rates (night time) to use at a time when it’s more expensive.

4. Because of 1 & 2 I think your calculations are a bit meaningless. Although the spirit of your piece (ie domestic batteries probably aren’t going to save you any money yet) is correct.

Thanks

Posted by Jason Knott on October 10, 2017

@automated home—Thanks. I had some extra zeros in there. I have corrected.

Posted by pat ultramedia.biz on October 10, 2017

I had SolarCity (another Elon Musk company) give me two different estimates for a 2100 sg ft home in Texas. I pay .09 per kWh. With a Powerwall it would have been 22 years to break even. At the end of twenty years the lease would have ended with old tech on my roof that I would not own and did not include having to replace the Powerwall twice which would increase the payoff to about thirty years if electricity costs remained constant. However maintenance on the system was included throughout the lease period. Also the estimate they gave me did not replace the connection from the electrical grid, no far from it. It only ‘supplemented’ my having to pay for power from the utility company. It also did not include a proper disconnect so if the grid needed service or went down, like in the hurricane in Florida, I could not use my solar panels as a standalone system.
When they said ‘so when would you like us to start? Just sign the online contract and we should get you done in the next five months give or take two months’ I just laughed out loud and said ‘I don’t feel that guilty about existing on this planet’ and ‘does the fact this makes no financial sense mean anything to you in your sales pitch?’ The sales guy said many tell him that this would be helping the planet so they do it anyway.

So selling to emotional, not a reasoning, client is their play. Wow.

Posted by Harald Steindl on October 11, 2017

Indeed it is partly an emotional sell as is EVERYTHING we buy these days.
Or do you really buy the cheapest roof chingles you can find? Or the cheapest of all available chairs or the cheapest house you can find? Dont even let me get started about clothing, food and cars.
It constantly amazes me, that still the majority of people go 100% rational with energy related investments whereas the very same people act very emotional on almost every other purchase.

And btw, NO, I am no Musk fanboy at all.as there are countless better systeme out there; at least over here in Europe..

Posted by Graham on October 12, 2017

Automatedhome is correct regarding figures. They do not make sense either for energy or $ .

Electrical energy is measured in Watthours (Wh) or kWH (kiloWatt hours) which is work. Work is Power over time.

Power is measured in Watts (W) or kW(kiloWatts) or MW (MegaWatts) and is an instant reading.

It’s not hard to differentiate Power and Energy terms. They are distinctive terms thus avoiding confusion when one talks about it. But many people use it in the wrong sense and will not make sense when the numbers are blabbed out.

Anyway, in Australia, the Powerwall 2 will make financial sense because in my case, I pay $0.48/kWh for peak energy between 1pm-8pm. Shoulder rates are at $0.27/kWh and Off peak rates at $0.19/kWh.

Aussies have one of the highest electricity rates in the world. Tesla is right to ship Powerwalls to Aussie markets because there is an immediate financial rationale to do. The payback period can be as short as less than 5 years, shorter if the trend that electricity rates will increase 20% per year.

In the US markets where electricity is cheap, it is very hard to justify the payback period. It really is an environmental decision more than financial. But in Australia, it will be both finanical and environmental that favours the Powerwall purchase.

Some argue that there better systems. Sure, but you will pay more for them. Lithium based chemistry at the moment is the best way to do it and Tesla’s Powerwall has the best value for kWh storage and overall specs. I’ve looked at 4 already - Tesla’s, Sonnen, Enphase and Redflow. Tesla’s pricing in Australia hits the sweetspot with its specs in Australia.