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If grid storage is allready competitive now (as it obviously is, if peaking power plant costs more than 800$/kWh), why aren't utilities then using them?
GE has offered them without success. I believe GE is very trusted name, so that can't be the problem.
nwdiver
Well-Known Member
The same reason solar PV doesn't make up a larger percentage of their fleet... Tesla storage is going to compete with RETAIL... utility storage needs to compete with WHOLESALE. A peaker is cheaper than batteries but Wal-Mart can't exactly install a peaking plant in the parking lot...
We may be talking past each other. All I was trying to say is that, in most of the country, there isn't a "utility side." If you're behind the meter (retail) then you can't be paid for regulation or storage. If you're in front of the meter, it's the RTO, not the utility, that needs to pay you. It may be possible (indeed, necessary if EPSA isn't overturned by the SCOTUS) for the distribution utility to bundle retail customers and offer that bundle to the RTO market, but it will be the RTO that is the paymaster in the end. It's a very different market structure than you have in Georgia, James.
Saw the article. I hope it's false. That price is something like twice what it should be. Lets say $180 x 10 = 1800 for the batteries, inverter and battery management another 600, another 1000 for administrative and installation, another 25% profit that gets you to 4250.
I could see even 6000 if they actually pay much more for the batteries, or if they want to cover hefty R&D costs with more profit. But 13k? No way.
It's just not disruptive at that price.
I agree. When i first heard of stationary storage a few months ago (searching for the articles now), I thought the article mentioned MUCH cheaper prices like $1500-$3000. If they want to sell like hotcakes and be competitive, I think they would have to come in under $5000. Otherwise, it would be cheaper to just get a natural gas generator, such as Generac. I guess it depends on the customer though. Customers with solar would prefer the battery but other customers who are just trying to be prepared for power outages could just go the Generac route (assuming they have natural gas) if the Tesla battery ends up costing $13k
Thumper
Active Member
If you buy a generator for earthquake preparedness, like me, a battery pack would be preferable. I have a generator, but in an earthquake, gas lines are perhaps even more likely to be interrupted than electrical lines. A battery pack is also faster and easier to connect for short term outages. Any time there is an interruption, I wonder is it coming right back on, is it worth connecting and starting the generator and throwing the transfer switch. A battery is just one quick switch on or off.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
In fact a battery won't even be "one quick switch" - it will be seamless. You won't notice the power is out unless you look out the window. Your TV won't turn off, your computer won't either.
But now with early generation home batteries I think if the only use case is emergency power it will be too pricey. A generator will be be better: cheaper investment, can run for days on end as long as you've stockpiled some fuel.
No, the use case will be battery+solar (or other renewable) at first.
jhm
Well-Known Member
Sorry, I was launching off in a different direction. It not clear to me how Tesla should insert itself into the utility market. It is such a strange, highly regulated market. There seems to be a huge wall between wholesale and retail that undermined much of the benefits that batteries could supply. I really like the idea of aggregated customer side storage, but it seems unworkable within many current regulatory frameworks.
So this leaves me thinking that Tesla's stationary focus should be behind the meter. Deliver solutions that enable ratepayers minimize their power bills. This will effectively take marketshare from the utilities, in the same sort of way that rooftop solar takes share. This will increasingly undermine the economics of utilities, but when they put more cost onto ratepayers, they will drive more customers away. Perhaps this death spiral will reach a crisis point leading to regulatory reform. If thing rooftop has been moving in this direction, and now stationary will boost the progression.
You bring up a good point about earthquakes but most parts of the world don't really have to consider earthquakes. Living in the Plains and Rocky Mountain states for most of my life, the only time the power has ever gone out for more than a few minutes has been due to weather such as tornadoes or heavy snow. These weather related incidents can knock out power lines but would almost never affect natural gas lines. While I am interested in Tesla batteries for home storage, there's no way I'd pay anywhere near $13500 for a device that I would probably need for a couple minutes per year, if that. By the way, the natural gas Generac generators that I was referring to are tied into your household electrical system and automatically provide power instantly if the electricity goes out, just as a battery backup would. I wasn't referring to a small, portable generator which would require a manual switchover.
While I am interested in vehicle to grid technology, I don't know if Tesla is interested in that market at this time. Vehicle to grid is great because you wouldn't need an (unused) generator or big backup battery sitting around as you already have that battery in your car.
I can see Tesla's battery being useful for homes with solar or those interested in peak shaving. It will be interesting to see what this week's announcements bring!
I've spent some time perusing the data from the California Self-Generation Incentive Program site (SGIP) (thanks a lot to our members Wishing_for_S and Bonaire for pointers in the Short Term TSLA Price Movements thread).
The results are really fascinating. Here are some salient points for the Forum to ponder. Data come from the SGIP Handbook and the spreadsheet containing data for all of the projects
One thing that should be noted is that above data are for the projects in various stages of the SGIP program, with such an application ostensibly is being the first step in the planning of the project, but, nevertheless, these 131MWh worth of storage projects are clearly in Tesla pipeline.
One conclusion, which I actually came to even before perusing the above data, is that oncoming battery storage announcement/reveal event is going to be enormously important and will set the tone for the ER. The battery storage information during the ER might overshadow all other information, as it will hopefully provide enough data for analysts to start taking battery storage part of the business seriously, and start putting some additive numbers reflecting this part of the business into PT.
The summary of the information included in the SGIP spreadsheet is included below.
The results are really fascinating. Here are some salient points for the Forum to ponder. Data come from the SGIP Handbook and the spreadsheet containing data for all of the projects
- The incentive for advanced Energy Storage in 2015 is whopping $1460/kW, or taking into account that Tesla kWh rating is twice the kW rating, $730/kWh. This incentive is obviously for installed kWh, so, as a wag, assuming that cost of equipment is equal to roughly half of the total installed cost, the incentive is $365/kWh of the battery. This incentive is phased out at 10% per year, i.e. in 2016 the incentive would be 90% of the 2015 amount. The incentive rate is also reducing as capacity of the system exceed 1MW - 50% for installations larger than 1MW but smaller than 2MW, and 25% for systems between 2MW and 3MW.
- The SGIP incentive is paid to the Host Customer, but can be assigned by the customer to the installer or equipment manufacturer, presumably in lieu of payment for equipment/installation.
- Tesla has a total of 607 storage projects being registered as part of SGIP in various stages. Of this total there are 201 Commercial/Government projects, while the rest are residential.
- Residential projects are all 5kW/10kWh, while commercial/government projects vary from 20kW to 3,000kW (40kWh-6,000kWh).
- During the first year of Tesla storage batteries participating in the program - 2011 (!) - majority of projects were residential, with only 11 being Commercial (are those the 11 Wall Mart stores referred to in the article by CleanTechnica?). With every year the quantity of commercial/residential installations participating in the program grew steadily, culminating with 92 out of total 98 in 2015.
- The total kWh of all Tesla projects with application in SGIP program is 130,923 - yes, about 131MWh!
- The total incentive for all of the projects registered in SGIP is $199M, with $1.1M paid to date.
One thing that should be noted is that above data are for the projects in various stages of the SGIP program, with such an application ostensibly is being the first step in the planning of the project, but, nevertheless, these 131MWh worth of storage projects are clearly in Tesla pipeline.
One conclusion, which I actually came to even before perusing the above data, is that oncoming battery storage announcement/reveal event is going to be enormously important and will set the tone for the ER. The battery storage information during the ER might overshadow all other information, as it will hopefully provide enough data for analysts to start taking battery storage part of the business seriously, and start putting some additive numbers reflecting this part of the business into PT.
The summary of the information included in the SGIP spreadsheet is included below.
The SGIP data are indicative of the status of the project as far as the stage of SGIP application is concerned, so it is not possible to evaluate when all of those 607 projects totaling 0.13GWh are going to be installed and Tesla able to book the profits. That is why in my table above I included the totals for the projects that had SGIP incentive was paid so far. According to the SGIP rules the payment can't be made until the installation is verified during the Site visit.
Most importantly, the data gleaned from the SGIP Site are not inconsistent with my speculation up thread that we will not see Tesla stationary storage pricing less than $400-500 per kWh any time soon, and this will allow Tesla an incredible feat of pulling as much profit from the stationary storage, per kWh, as they make in the automotive segment, although the top line for stationary storage could be 2 times or more less that for the cars. In another words stationary storage will have much higher net margins.
Is Tesla paid the incentive? That wouldn't make sense, shouldn't the system buyer get the incentive for the project?
presumably, solar city is the buyer for home systems and then leases it to the homeowner. For commercial, could be the same using the $1B in Credit Suisse money vehicle. But margins are based on what is left from the project costs that flow into Tesla. Solar city could pay them strongly due to the heavy incentive money of $1.75 per watt state incentives. CA is being very good to both companies and I have to think both are going to do as much as possible in those projects already on the SGIP project log as possible to garner the profit potential. But is it a little disturbing to hear one talk about battery prices dropping quickly and then reviewing some project costs and see that the projects hit numbers like $1000-2000 and higher per kWh? There may be loopholes and other advantages in the SGIP system that they can take advantage of now before any changes come to the system. I also think there is a chance of some projects outlined to be cancelled, while others are added. I noticed recent additions were 100 KW with a project price of $100,000. And $60,000 incentive. Wow, lot of incentive there. Compared to ZEV, it is huge. SGIP opened the door for battery storage and didn't factor in small, nimble and high powered Li-Ion being able to do things as cheaply as that. I hope they cancel some of the 2012 and 2013 projects which are $2000 per kWh (not KW, but kWh) and move to newer and cheaper project technology so more kWh are brought online per dollar. The 3000KW system logged in from 2012 could be done a lot cheaper than $12 million.
presumably, solar city is the buyer for home systems and then leases it to the homeowner. For commercial, could be the same using the $1B in Credit Suisse money vehicle. But margins are based on what is left from the project costs that flow into Tesla. Solar city could pay them strongly due to the heavy incentive money of $1.75 per watt state incentives. CA is being very good to both companies and I have to think both are going to do as much as possible in those projects already on the SGIP project log as possible to garner the profit potential. But is it a little disturbing to hear one talk about battery prices dropping quickly and then reviewing some project costs and see that the projects hit numbers like $1000-2000 and higher per kWh? There may be loopholes and other advantages in the SGIP system that they can take advantage of now before any changes come to the system. I also think there is a chance of some projects outlined to be cancelled, while others are added. I noticed recent additions were 100 KW with a project price of $100,000. And $60,000 incentive. Wow, lot of incentive there. Compared to ZEV, it is huge. SGIP opened the door for battery storage and didn't factor in small, nimble and high powered Li-Ion being able to do things as cheaply as that. I hope they cancel some of the 2012 and 2013 projects which are $2000 per kWh (not KW, but kWh) and move to newer and cheaper project technology so more kWh are brought online per dollar. The 3000KW system logged in from 2012 could be done a lot cheaper than $12 million.
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As I posted, the payment of the incentive is made to the Host Customer. Paragraph 2.5.5 (p.32) of the Manual linked in my post states the following:
Where are you getting $1.75 per watt? The $1.46 per watt that I mentioned in my post is included in the Manual (Para. 1.3, p10):
Regarding the project costs of $up to $2,000/kW, do not forget that this is total installed cost, not cost of batteries alone. The cost of batteries could easily be half of the total cost, i.e. $1,000 per kW. Then one has to remember that battery energy rating is twice the power rating for these Tesla batteries, so battery rated 1kW has energy rating of 2kWh. The final battery cost per kWh is therefore about $500.
Another thing that often is overlooked, it is not just the battery that Tesla sells, it is plug and play system with software that dispatches charge/discharge modes of the battery based on the load profile. This intelligence and learning capabilities that are built into the system definitely worth some $$!
"The incentive for advanced Energy Storage in 2015 is whopping $1460/kW, or taking into account that Tesla kWh rating is twice the kW rating, $730/kWh. This incentive is obviously for installed kWh, so, as a wag, assuming that cost of equipment is equal to roughly half of the total installed cost, the incentive is $365/kWh of the battery. This incentive is phased out at 10% per year, i.e. in 2016 the incentive would be 90% of the 2015 amount".. - ,Vringshpun
so if I'm reading this right, if Tesla started with about $200 million in leases for 2015 (pure guesstimate) then they would begin 2016 with $200million (x.9%) = $180 million in revenue + 100% of anything delivered and inspected in 2015....so if they connected another $400 million, that is the number they start with in 2016. If this is a lease, starting the year with a projected $400 million in additional high margin revenue from a revenue steam that is not only growing dramatically, but is recurring - that would be huge.
nice work Vring....well played Tesla
so if I'm reading this right, if Tesla started with about $200 million in leases for 2015 (pure guesstimate) then they would begin 2016 with $200million (x.9%) = $180 million in revenue + 100% of anything delivered and inspected in 2015....so if they connected another $400 million, that is the number they start with in 2016. If this is a lease, starting the year with a projected $400 million in additional high margin revenue from a revenue steam that is not only growing dramatically, but is recurring - that would be huge.
nice work Vring....well played Tesla
I do believe that when Tesla start "showing all their cards" as far as stationary storage is concerned, the Market will be mightily impressed.
According to the SGIP spreadsheet mentioned in my post, and as shown in posted summary, out of total of 131MWh of projects in the pipeline, only less than 1MWh worth of battery storage were already installed. I think that timing of the April 30th event is not incidental. I think that we might start to see some $$ for the battery storage start showing on the top line in Q1, so Tesla is planning to tackle all of the general information about their storage products during the event, so they can spend some time on the financials of this part of the business during the Q1 ER. I hope to see some measurable contribution from this to the bottom line, and, of course, storage battery guidance, if Elon decides to share it at this time, could be a watershed event.
According to the SGIP spreadsheet mentioned in my post, and as shown in posted summary, out of total of 131MWh of projects in the pipeline, only less than 1MWh worth of battery storage were already installed. I think that timing of the April 30th event is not incidental. I think that we might start to see some $$ for the battery storage start showing on the top line in Q1, so Tesla is planning to tackle all of the general information about their storage products during the event, so they can spend some time on the financials of this part of the business during the Q1 ER. I hope to see some measurable contribution from this to the bottom line, and, of course, storage battery guidance, if Elon decides to share it at this time, could be a watershed event.
Bonaire,
I have the same question about who gets the incentives. I think Solarcity buys the battery from tesla, then installs their complete solar+storage on customers roofs. Walmart is a customer of Solarcity and uses solarcity's demand logic product. Therefore, I assume Solarcity gets the incentive, although I'm not sure if Walmart bought the demand logic product outright giving them the incentives.
im not sure manufacturers count in the incentive program, maybe if tesla leases the batteries, but that would also mean they would have to install it, which is solarcity's business typically.
Also, from my understanding, pug and play means the system can be integrated into any energy company ecosystem(grid, solar, wind, etc...) the stationary storage pack might require versatility to work with the host company's management software. Solarcity has demand logic, so tesla energy storage can plug and play in that ecosystem. Elon did talk about the storage pack will include a smart inverter, not not sure if that will be included this time around... a lot of unknowns, hope we get a few answers this Thursday.
as of right now, I think Solarcity and other installers/energy company might reap most of the incentives. Tesla benefits by being the lowest cost energy storage solution for these companies to choose as their primary energy storage supplier. If that's not the case, Tesla might announce Thursday they have an installation division to lease and install energy storage products themselves. Or, Solarcity leases the storage from Tesla and then offers PPAs only where tesla is owner/manufacturer, but not sure how this would complicate things with the added 20% that comes from buying for an in-state manufacturer.
I have the same question about who gets the incentives. I think Solarcity buys the battery from tesla, then installs their complete solar+storage on customers roofs. Walmart is a customer of Solarcity and uses solarcity's demand logic product. Therefore, I assume Solarcity gets the incentive, although I'm not sure if Walmart bought the demand logic product outright giving them the incentives.
im not sure manufacturers count in the incentive program, maybe if tesla leases the batteries, but that would also mean they would have to install it, which is solarcity's business typically.
Also, from my understanding, pug and play means the system can be integrated into any energy company ecosystem(grid, solar, wind, etc...) the stationary storage pack might require versatility to work with the host company's management software. Solarcity has demand logic, so tesla energy storage can plug and play in that ecosystem. Elon did talk about the storage pack will include a smart inverter, not not sure if that will be included this time around... a lot of unknowns, hope we get a few answers this Thursday.
as of right now, I think Solarcity and other installers/energy company might reap most of the incentives. Tesla benefits by being the lowest cost energy storage solution for these companies to choose as their primary energy storage supplier. If that's not the case, Tesla might announce Thursday they have an installation division to lease and install energy storage products themselves. Or, Solarcity leases the storage from Tesla and then offers PPAs only where tesla is owner/manufacturer, but not sure how this would complicate things with the added 20% that comes from buying for an in-state manufacturer.
Have thought this might be the case for awhile. Felt very strong since JB did his Stanford presentation. Thanks for the strong analysis as always.
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