Jerry Franklin (FP)
TESLA MOTORS OWNER and chief executive officer Elon Musk’s recent announcement has positioned him to be a major player in the renewable energy industry. Every technology and energy newspaper and magazine has reported on this from every angle. Words like “game changer”. “evolutionary” and “revolutionary” have been used. Some are calling it the death of power utility companies.
Musk has launched a home storage solution and utility scale storage solution. The home solution is called the Powerwall and it comes in a seven kilowatt-hour (kWh) version at US$3 000 and a 10 kWh one at US$3 500. He is also building a mega plant to manufacture a large number of these batteries to drop the price further. Musk’s vision is to give every household the ability to produce and store their own power and to use it when they need it.
So what does this really mean to the average home owner in Barbados and the Caribbean? Firstly, the battery is a Lithium-ion battery (Li-ion), which is not revolutionary.
However, the Powerwall is approximately four to five times cheaper than other Li-ion batteries and this is only version one. His intention is to bring the price even lower, which will eventually make battery storage more accessible for the average home. At the current price, the Powerwall is about the same price of the equivalent maintenance free lead-acid battery, but when you consider it is wall mounted, which eliminates any need for a battery room, and that the life is longer, then the significance of Tesla battery becomes more apparent.
Musk has not left the success of his battery to chance and has started a campaign that in my opinion is the most significant and game changing thing about the annoucement. Musk is sharing his vision where every household and every business is self-sufficient, where you would produce the energy you need to consume during the day and store the excess to meet night- time eneryg needs. While this is nothing new, it is currently see as a very difficult, expensive and complex solution to have, and most people are led to believe it is unachievable.
Musk’s Powerwall will make it simpler for the average consumer to consider buying it, as it is a wall-mounted, maintenance-free solution. Musk is bringing a much higher level of awareness to storage solutions than any of the players in storage solutions today. He is potentially the Steve Jobs of renewable energy and can create the Apple effect where people just must have an Apple product. So I believe this can be the start of a revolution in energy. He is big enough and has a proven successful track record of challenging the status quo as a successful manufacturer of high-performance electric cars.
Musk is trying to change the way people feel about being off-grid. In this marketing strategy he has not mentioned the fact that you have an off-grid system, because the words off grid seem to bring out a negative emotion in a lot of people. He is also marketing it as a very simple solution. The facts are it requires the same components as any battery-based solution that companies sell today. What Musk is doing is selling a dream. He is selling the idea of each homeowner living their lives without depending on the utility company for power.
He is selling the idea of a zero bill but without the complication of net metering or buy-all-sell-all to achieve it and so far he has gotten the attention of the world. He has captured the imagination of a segment of people who don’t really understand the technology involved but immediately identify with what he is trying to do, daring to challenge the status quo. Utility companies should be concerned about this announcement, as this might be the single biggest threat to their current existence. However, I believe they can survive a revolution like this, but a fundamental change in how they do business has to occur.
The smart grid will be the saviour of the future utility company, it will be the heart and brains of the new energy world and the incumbent power utilities are best placed to implement and run them. Power generation will become a small part of their revenue streams and new innovative products and services will take over.
So I believe Musk has ignited the energy revolution. He has already shown that the current price of batteries can be much lower and he will force the other manufacturers to drop their prices. If we take a closer look at the battery industry, we should see a number of new significant game-changing battery technologies out there that most people are not aware of. There is a company on the verge of producing an aluminum-ion battery which has shorter charge times, long run times, and a longer life than a Li-ion battery. Then there is Aquion, a saltwater-based battery that is currently being produce with very little fanfare. It is non-toxic, maintenance-free, and has a life six times longer than its lead-acid equivalent and there are many others being developed.
So if we can combine the vision, pricing strategy, and marketing approach of Tesla with these new more advanced battery technologies, it is hard not to get excited about the future of energy.
Jerry Franklin is an engineer, energy auditor, equipment tester, and energy solutions provider.