Storage insiders tepid on Tesla's new battery system

The fireworks the Tesla announcement triggered have been characterized by some as media hype. That goes for Germany, too, where the combination of on-grid PV systems with battery storage is comparatively advanced.

Elon Musk presented his energy revolution and the launch of his Powerwall consumer battery-based storage system in California with a healthy dose of humor. And Tesla has an image of being a foundry of disruptive innovations. Ultimately, the kicker was supposed to be the price of the system, which works out around US$350 per kilowatt-hour ($350/kWh). The price is about one-third of current retail prices in Germany.

Nevertheless, power storage system providers are not worried. Some see a positive effect in the announcement.

"The high profile of the strong Tesla brand could finally get the energy market moving,” says Andreas Piepenbrink, CEO of the provider E3DC, one of Germany’s storage market leaders. He still has his doubts as to whether the battery can be a success. A number of market players hold views similar to Piepenbrink’s and are rubbing their eyes at what they see as all of the unjustified hubbub in the press.

The list price is for the battery alone and not for the entire storage system. For instance, it does not include the power electronics and energy management. Thus, Tesla is not really competing with system providers, but rather with battery manufacturers.

"Now Tesla will have to prove that they are better at making batteries than competitors like Panasonic and Samsung. That’s going to be interesting,” says Piepenbrink.

This is particularly true in light of the fact that $350/kWh is the wholesale price installers will be charged and not, as Tesla may have implied, a retail price.

"These are standard purchase prices for system providers that Tesla is now somewhat deceptively repackaging as consumer prices," said Piepenbrink.

"In the automotive industry, such prices are not unheard of," says Olaf Wollersheim, a project lead for the Karlsruhe Institute of Technology’s (KIT) Management Competence E program. In other words, you can already buy batteries from brand-name manufacturers in the price-range Tesla has announced.

It is not yet clear what exactly customers will get for the price, because Tesla has not released enough information about the performance of the battery. For example, it has not specified the cycle life, which determines the service life of the battery. Furthermore, this is not fixed but depends on the depth of discharge, the discharge performance and other factors.

Tesla writes that it uses the same cells in the stationary storage systems as it does in its cars. Although the Tesla car has a cycle life of less than 500 cycles, that is sufficient to drive 200,000 kilometers or more without a battery replacement. However, batteries for stationary storage systems need a cycle life of at least 4,000 cycles to last for 20 years, charging and discharging once a day.

Nevertheless, it is conceivable that the auto manufacturer is using the same cells, says KIT expert Wollersheim. The lower the useful capacity in comparison to the rated capacity, the higher the cycle life. In terms of price, a battery with 7,000 kilowatt-hours of usable capacity and 2,000 cycles is worth just as much as a battery with 3,500 kilowatt-hours of usable capacity and 4,000 cycles.

But Tesla has not provided the usable capacity yet. It is not possible at this stage, therefore, to evaluate the price with regards to the usable battery capacity.

Charging and discharging performance is yet another factor that producers can tune to increase cycle stability. This factor increases in inverse proportion to power output. Tesla has it indicated a power output of two kilowatts in the specifications for the battery. Many of the systems available on the market allow higher discharge capacities, but a reasonable power value depends on the intended application. That has to be taken into account in any price comparison.

Now the ball is in Tesla’s court to bring a system to market that can stand up to the competition. Editors at pv magazine have already queried Tesla for the missing specifications.

Translation by Tim Haynes