Published on March 20th, 2017 | by Steve Hanley0
Tesla Is Now An Energy Provider In Kauai, Hawaii, With Powerpack + Solar Installation
March 20th, 2017 by Steve Hanley
Originally published on Solar Love.
Tesla has completed a battery storage and solar power installation on the island of Kauai that will save 1.6 million gallons of diesel fuel a year, not to mention the tons of carbon dioxide, nitrous oxide, and particulate pollution from diesel generators that will not get spewed into the pristine skies above Kauai. The installation consists of 272 Tesla Powerpack grid scale battery storage units with a combined capacity of 52 megawatt-hours. It also includes a 50 acre solar panel farm capable of supplying 13 megawatts of electricity.
The installation is not as large as the 396 Tesla Powerpack installation with 80 megawatt-hours of capacity installed for Southern California Edison earlier this year, but it does have one significant difference. The Kauai Island Cooperative Utility does not own the storage facility and the 55,000 solar panels, Tesla does. It has entered into a contract with the utility to supply it with power for 20 years at 13.9 cents per kilowatt-hour. That compares to the 15.5 cents per kilowatt-hour cost of electricity prior to the Tesla contract. It makes Tesla a power provider, not merely a battery storage company.
That is a bold new role for Tesla to take on, but one it looks forward to doing more often. Nevertheless, Wall Street is still unimpressed with Tesla’s merger with SolarCity in November of last year. “At this time, we ascribe zero value to Tesla shares from this business,” Morgan Stanley analyst Adam Jonas says. “We take this view due to the uncertain economic and regulatory forces facing the energy business, particularly the solar business.”
Tesla’s CTO disagrees. In an interview with CNBC on March 8, he attributed such skepticism to the fact that solar and energy storage are a new market, one that most analysts are unfamiliar with. “I think it is a little difficult to see into the future sometimes and see how it is going to grow. There are no immediate comparables that they can look to in the past and show how this growth happened.” He added, “the size of the utility grid and the electricity consumed around the world is enormous. That is the market that we are tapping into here.”
Over time, he expects the economics of renewables to look increasingly favorable to analysts and industry leaders compared to the continuing use of fossil fuels to generate electricity. “The energy markets are obviously volatile,” he said. “They will continue to be volatile, and these technologies are coming down in price every single year. So we don’t see this changing and the long-term trend is going to be the same.”
David Ige, governor of Hawaii, is delighted with the arrangement on Kauai. “As a state, we know how to generate power. For us, the challenge has been storing that power to use at night. Now we can do that.”
Reprinted with permission.
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