Powerwall is a "no need to buy a product"

Elon Musk did an unusual thing. He made a battery that weighs 100 kilograms and can be hung on the wall of the garage, and convinced many people that having such a battery is to choose a way of life-like putting a compost bin in the garden or giving it to a baby Buying reusable diapers is the same. His battery is a personal choice of life, and with your help, the whole world will change for it.

I hope so. Although intuitively speaking, home batteries and solar power seem to be a perfect match, the problem is that this combination has no economic significance. Not now, not in the near future, absolutely not in the United States. After Tesla has just launched a high-profile consumer-oriented Powerwall battery, the market’s interest in this battery is not purely for financial reasons.

indeed so. Based on reports from various parties, the initial response from the market was not bad. All these attentions will greatly enhance the market prospects of Tesla's other more important battery product, Powerpack, which has not received much attention at present. The Powerpack for companies and utilities is a truly disruptive battery product.

But if you are concerned about Tesla because you care about the future of clean energy, then whether a solution is economically cost-effective is the only key question. The reason why wind and solar energy are at an important turning point is precisely because they are now as cheap as fossil fuels in many parts of the world, or even cheaper. Judging from the initial demand (about 38,000 inquiries received in the first week), Tesla’s home battery was an instant hit, but even under the best circumstances, it would take more than a year to complete these orders. The combined electricity is only a small part of the annual electricity generated by a fossil fuel power plant. If you want to "fundamentally change the way the world uses energy," as Musk said, the scope of application of this battery is much wider.

The obstacles facing Tesla are huge. In a market with a huge demand for electricity in the United States, although Powerwall batteries may bring a huge impact, the high cost will make any homeowner who counts on Musk's batteries to achieve electricity independence daunting: According to Bloomberg New Energy Finance (Bloomberg New Energy Finance) According to the analysis of an average American household that completely relies on solar panels and Tesla’s new batteries for power supply, the installation cost of the entire system is about 98,000 US dollars. And this assessment is based on the assumption that the house is located in a sunny area like Southern California.

Therefore, for most Americans, “getting out” of the power grid is still out of reach. Even those families that finally accomplish this feat will waste a lot of electricity, because the potential of solar panels and batteries can rarely be used 100%.

Should we wait for the birth of the second-generation battery?

Many observers liken the launch of Powerwall to the iPhone moment in the home battery field. In this view, it doesn't matter whether using Powerwall is cost-effective right now. Early adopters were the wealthy who didn't care about cost. The next generation of cheaper batteries will eventually attract the general public.

There are two problems with this reasoning. First of all, although Powerwall is a very stylish and technologically beautiful engineering masterpiece, the battery is not the same as the iPhone, Kindle or car. It is not the kind of gadget that makes people fall in love at first sight. Once you plug it in, if everything is working properly, there is no need to touch your home battery. As far as a device is placed in a garage, a beautiful design alone is not enough to drive large-scale consumer behavior.

The second problem is the current supply mode of U.S. utilities. No matter how cheap the price becomes, batteries will not become the easiest or cheapest way to use solar energy. For the vast majority of consumers, it is better to treat the grid as a battery for storing solar power: when solar power is generated, consume the solar energy you want, and then sell the remaining power to the grid.

"In my opinion, the idea of ​​allowing batteries to enter millions of households is not only economically impractical, but also unnecessary," said Brian Warshay, an analyst at Bloomberg New Energy Finance. "Regardless of the use and efficiency, the purpose of the centralized supply grid is beyond doubt."

Noble household battery users hope that people can get rid of the grid, but it is wiser to equip the rooftop solar panels with batteries that can store some solar energy and use them during peak hours of electricity consumption at night. When the battery runs out, the homeowner can switch to the grid at any time. This is exactly the idea that Tesla has always advocated: to continue the benefits of solar energy with the help of batteries to save money.

The problem is that no matter how high or low the battery price is, this "cutting the peak and filling the valley" strategy will not save most American consumers a penny. To blame is a policy called "net metering" (netmetering). According to the analysis of Bloomberg New Energy Finance, even in a country like Germany where the market environment is more favorable, the total cost of buying and installing a household battery has to be reduced by nearly two-thirds. Only by "cutting peaks and filling valleys" can it be compared with those without batteries. Roof panels are more cost-effective. Tesla sees Germany and Australia as the largest initial markets for batteries for daily use.

Powerwalls will be a bait for Tesla's battery business

The two major policies that hinder Powerwall are:

1. Net metering is a double-edged sword

In its essence, the net metering policy is the largest subsidy enjoyed by the US solar industry. This policy allows households with rooftop solar panels to sell excess electricity to the grid at retail prices. This makes the use of solar energy at home profitable, but also creates a huge obstacle to the application of batteries. When you can sell excess electricity to the grid, why store it?

As long as the net metering policy continues, consumers will have no economic reason to use batteries, even in areas with very high electricity prices. According to estimates by Barclays analyst Brian Johnson (Brian Johnson), the net metering policy means that only 3% of solar users in the United States will buy batteries. When the tax credit policy of the United States is gradually abolished by the end of 2016, the importance of the net metering policy to solar energy will become more significant.

Currently, 44 states in the United States implement net metering policies. Bloomberg New Energy Finance reported that at least 12 states are considering legal disputes caused by this rule. If some states with high electricity prices, such as Hawaii, eventually cancel the net metering policy, it would be more reasonable to match solar panels with household batteries. But this is a double-edged sword. Once the excess electricity cannot be sold, the attractiveness of rooftop solar energy itself will be greatly reduced.

Outside the United States, net measurement policies are rare. Most other countries prefer the so-called "feed-intariffs" policy, but the repurchase price is often lower than the retail electricity price. This makes home batteries more advantageous in terms of cost, although the advantage is not great.

2. The time-sharing pricing mechanism is very good in theory

In the event of a power failure, Tesla’s lithium-ion Powerwall battery has certain advantages compared to other forms of backup power. This battery is quiet and clean, can be stored indoors or outdoors, and can be stacked together to supply uninterrupted power. In addition, it does not require frequent maintenance like cheaper lead-acid batteries.

But the enthusiasm surrounding this battery designed for daily use is mostly focused on its economic and environmental benefits. Tesla’s website emphasizes that Powerwall will help you “get rid of the utility grid” and “supply uninterrupted solar energy day and night.” If these are Tesla’s entire goals, a Powerwall with such a high cost is a very expensive one. choose.

Tesla believes that the most important economic reasons for using Powerwall are:

Prevent paying peak electricity prices

During peak hours of power consumption in the evening, power companies usually charge higher electricity bills. Powerwall can store electricity when the electricity bill is low, and supply electricity to your home when the electricity bill is high.

This is called "peakshaving", which is another version of the "peak shaving" strategy discussed above. For California companies, this strategy has significant economic significance, because in California, the additional electricity bills charged during peak hours usually account for about half of a company's electricity bill. But Bloomberg New Energy Finance's analysis shows that less than 1% of American households pay electricity bills based on time of use. Everyone else pays the same electricity bill 24 hours a day, so it doesn’t matter whether there is a battery or not.

Hua Xie of Bloomberg New Energy Finance believes that even if time-of-use pricing becomes the norm—for example, Italy and Ontario, Canada use this pricing mechanism—the difference between peak and off-peak electricity prices is not enough to justify the economic rationality of household batteries.

Some large U.S. utility companies and state governments are expanding the time-sharing pricing mechanism, which may change consumer behavior and encourage people to use more home batteries. For example, a law passed in California will allow utility companies to charge customers for electricity based on a time-of-use pricing mechanism starting in 2018.

However, there are still some "peak shaving" methods that are more cost-effective than buying batteries: postpone the use of dishwashers and washing machines until later in the night, or use smart thermostats, which can advance the use of non-peak electricity in summer Cool down the house.

So why does Truss launch Powerwall?

As far as consumers are concerned, Powerwall is not yet economically meaningful. But this does not mean that it is meaningless to Truss.

Bloomberg New Energy Finance's research shows that since mid-2013, Germans have purchased more than 16,000 home batteries, and the prices of these batteries are higher than Powerwall. As electricity prices rise and battery prices fall, household batteries will find more such markets. In the United States, Tesla’s batteries may still be the plaything of the rich, but even this may be a considerable market. In addition, after the net metering policy is finally cancelled, household batteries can also provide some protection for the rooftop solar industry.

Powerwall is expected to bring brand reputation to Tesla’s Powerpack, a battery product for companies and utilities. Compared to this, it may not be so important how many homeowners will buy this battery. Regarding the commercial market, Powerpack has significant economic advantages, and it is possible to improve the efficiency and reliability of the grid. In the first week of the announcement of the Powerpack battery, Tesla reported that the "deposit" for this battery had reached $625 million, but the company declined to disclose more details.

In the final analysis, these batteries help justify Tesla's investment of $5 billion to build a battery plant in Nevada. With the help of economies of scale, these new products will lower the cost of car batteries, and will buy Tesla more time from investors-Elon Musk’s “heart-shaking investment in new projects allows investment People are extremely anxious. Although it is not suitable for ordinary consumers, the flashy Powerwall has wonderful economic significance for Tesla.

"Powerwall is not a system, configuration or ‘storage solution’," said Nathaniel Bullard, an analyst at Bloomberg New Energy Finance. "It is a product that has a name and a surname, memorable, iconic, favorite, and no need to buy." The author/Tom Randall editor/Deng Chuyang translation/Ren Wenke

In short, although Tesla's giant solar cell concept is very good, due to economic considerations, ordinary households are still not worth buying.

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