During Tesla’s recent first-quarter 2021 earnings call, the CEO explained how the company’s solar panels and batteries can unite to work as a large distributed utility. The master plan is to collect solar resources in an inventive manner.
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Unlike a conventional grid with large power stations powering hundreds of homes, the panels could harvest energy and recharge batteries at single homes. That energy could then be returned to the grid and supplied to other houses, forming mini power stations.
Musk believes that this move must be made due to an increase in the number of electric vehicles on the streets. He said that the grid would require twice as much electricity if transport goes electric; due to a major shift toward renewables, because if heating switches to renewables, the world would require three times as much electricity to empower the clean energy future; the occurrence of more extreme weather disturbances; and to avoid the presence of more and lengthier power lines, as well as the increased presence of power plants.
Musk has promoted solar energy plus batteries before; in 2016, he demoed a “house of the future,” which included a Tesla Powerwall battery (a modified version of the battery in Tesla autos) that could couple with Tesla Solar Roof tiles to collect energy while the sun shines and store it within the battery. This setup grants the residence 24/7 access to clean energy.
A virtual power plant escalates this concept; as opposed to providing energy to a solitary house when required, a Powerwall battery is enlisted to return energy to the grid at specific times.
Also toward the attainment of this goal, Tesla has opened “virtual power plants” in South Australia, Rhode Island, Massachusetts, and other regions. In July 2018, a Tesla virtual power plant in Vermont was able to utilise 500 Powerwall batteries to fill the energy gap throughout a heatwave.
In the UK, Tesla released the Tesla Energy Plan along with energy supplier Octopus Energy in November 2019. Architect Richard Hawkes, one of the scheme’s early enthusiasts, said that he would surrender control of his Powerwall battery as a portion of the deal. Hawkes could not regulate settings like the amount of electricity to store to shield against a power cut, but in exchange, he scores a less expensive price on his electric bills.
Tesla also has shifted its Tesla Solar Roof pricing so it now factors into roof complexity. The change involved an escalation of prices by about 30 percent for purchasers, although they’d already signed a contract. Musk said his company had made mishaps in assessing the difficulty of some roofs.
Tesla also said it will no longer sell solar panels and Powerwall batteries separately. Musk justified this decision by saying it would render installations simpler.
This figures in to Musk’s objective to expand the capacity of Tesla’s energy business.
In July 2020, Musk said he’d like the energy business to reach the same capacity as Tesla’s automobile business. Simultaneously, the energy business claimed only six percent of the company’s overall revenue.
Even presently, energy generation and storage has accounted for about five percent of revenue in the first quarter 2021 report. In 2020, competitor Sunrun deployed more than twice the solar capacity of Tesla, deploying 455 megawatt-hours.
Tesla stated in its latest quarterly report that energy storage deployments went up 71 percent by the year. Yet Tesla plans to reach volume production of its advanced battery cells, growing to three terawatt-hours of yearly production by 2030.
As the infrastructure arrives for Tesla’s fresh approach to energy, it is the battery cell that could help the company reach their revenue goals.