Tesla is a direct competitor to legacy luxury auto brands like BMW and Mercedes-Benz as well as even more mass-market brands like Honda and Toyota. It stands apart from other car producers via its unprecedented tech focus and ongoing tech updates. But do auto deliveries and current production quotas tell the whole Tesla story? No. The Tesla 2019 narrative should be laced with nuance that also examines other areas of the company’s sustainable energy scenario. Let’s look at some of those Tesla Energy products and services and review their trajectory throughout 2019.
One of the major breakthroughs over the past 10 years has been the mainstreaming of solar energy, which has gone from a research anomaly conducted in dark academic spaces to one that’s growing exponentially with little to no government assistance or funding and is often the cheapest option for new electricity generation on the utility, commercial, or residential scale.
Tesla Energy is one of the top sustainable energy players in the US. It supplies power to homes, businesses, and utilities by selling or renting them solar panels, solar roofing, and battery storage packs called Powerwalls, Powerpacks, and Megapacks. The Motley Fool says Tesla has been the best renewable-energy-focused stock over the past decade, as it has grown from “making a niche product for deep-pocketed buyers to producing zero-emission vehicles for the masses. On top of that, it made inroads into the energy storage and solar markets.” Actually, it’s #1 based on stock price growth since IPO. Here are the top 5 companies’ stock increases since their IPOs up to the point of publishing on December 22:
- Tesla — 1,560%
- NextEra Energy — 555%
- SolarEdge — 344%
- Brookfield Renewable Partners — 318%
- Enphase Energy — 250%
The Motley Fool predicts that, with a growing number of new energy products in development, Tesla stock could continue riding higher and higher.
Tesla CEO Elon Musk concurs. He says that Tesla is poised for “really crazy growth for as far into the future as I can imagine. … It would be difficult to overstate the degree to which Tesla Energy is going to be a major part of Tesla’s activity in the future.”
During the Q3 2019 shareholder call, Kunal Girotra, senior director of Tesla Energy Operations, announced:
“Our solar deployments rose by almost 50% over last quarter, and our energy storage deployments, which include Powerwalls and Powerpacks, grew by 15% to an all-time high of 477 megawatt hours. In the last three months, we relaunched Tesla Solar in North America by simplifying our solar offering into three sizes of small, medium, and large with transfer and pricing on the website.”
In the past year alone, Tesla installed more than 1 GWh of global energy storage capacity with its current storage products, Powerwall and Powerpack, bringing the company’s total global footprint to more than 2 GWh of cumulative storage. With Megapack, it seems possible that this number will continue to accelerate exponentially in the coming years.
Tesla Megapack Utility-Scale Storage: A Sustainable Energy Success Story
At COP25, Sverre Alvik, Energy Transition program director at DNV GL, declared, “The energy transition facing us in the coming decades is an affordable one. In fact, the future energy system is not only affordable; it is cheaper than the energy system we have today.”
Battery storage is essential if a fiscally viable transition to a sustainable global electric grid is to take place. To match global demand for massive battery storage projects, Tesla designed and engineered a new battery product specifically for utility-scale projects: the Megapack.
Every Tesla Megapack arrives pre-assembled and pre-tested in one enclosure from the Tesla Gigafactory — including battery modules, bi-directional inverters, a thermal management system, an AC main breaker, and controls. No assembly is required. To “fire up” the Megapack, all that is needed is to connect an AC output to site wiring. At the site level, Megapack requires 40% less space and 10× fewer parts than other current systems on the market. The high-density, modular system can be installed 10× faster than current systems.
Our own Kyle Field reported recently on a new 93 MWh Tesla Megapack system installed in Alaska by the Homer Electric Association, Inc. The Megapack will be used to directly offset electricity that would have otherwise required a peaker plant to ignite (and pollute). The new battery pack will be installed at the Soldotna Power Plant adjacent to an existing natural gas-fired GE LM 6000 turbine currently used to provide electricity for peak electricity usage in the area.
— CleanTechnica (@cleantechnica) December 10, 2019
Tesla Powerwall & Powerpack
The Tesla Powerwall can detects grid outages and automatically become a home’s main energy source in times of need. The Powerwall is a fully-integrated AC battery system for residential or light commercial use. Its rechargeable lithium-ion battery pack provides energy storage for solar self-consumption, time-based electricity optimization, and power backup. Powerwall’s electrical interface provides a simple connection to any home or building. Its compact design achieves market-leading energy density and is easy to install, enabling owners to quickly realize the benefits of reliable, clean power.
Tesla provides a Welcome booklet so that new Powerwall owners have a handy reference. The Tesla Powerwall costs about $6,700 (retail), with another $1,100 for the recently updated Powerwall Backup Gateway 2 (seen below).
The connectivity of the Powerwall Backup Gateway 2 allows it to stay connected to the internet to keep tabs on changing electricity prices, energy policies, and even the weather. To complete the purchase equation, add in installation, which ranges from $1,000 to $3,000, depending on the complexity of the local process.
During the Q3 Tesla shareholder call, Musk stated that the Powerwall …
“gives you blackout protection, so you’ll have energy security in the event of rolling blackouts. Or, if the power goes out for any reason, which appears to be a long-term systemic issue in California particularly. I think (the Powerwall) is definitely going to be viewed as a significant asset for any home.”
The Powerpack contains 16 individual battery pods, each with an isolated DC–DC converter. Pod architecture and onboard power electronics optimize performance across the array and enable swapping at any time. The Powerpack system scales to the space, power, and energy requirements of sites from small commercial businesses to regional utilities. It can be configured in various arrangements, offering increased modularity over competitors.
With all the potential within the Powerwall and Powerpack, how come Tesla didn’t zoom in more intensely in 2019 on these important components of the overall business plan? Musk reflected during the 2019 Q3 investors’ call that the company decided to …
“[redirect] resources from everywhere else in the company and apply them to the Model 3 production — fixing the Model 3 production ramp and simplifying the design of the Model 3. So, for about a year-and-a-half, we unfortunately stripped Tesla Energy of engineering and other resources and even took the cell production lines that were meant for Powerwall and Powerpack and redirected them to the car because we didn’t have enough cells.”
Hopefully, 2020 will be the year where Model 3 production is nearly formulaic and Tesla Energy receives the R&D funding and attention it deserves.
Sustainable Energy: Solarglass Roof & Buffalo Gigafactory
In 2016, Tesla announced it would be acquiring SolarCity in a $2.6 billion merger. CEO Elon Musk continues to work to stabilize the division, which saw its sales roll down a hill and revenues go with them. Tesla is facing a shareholder lawsuit by disgruntled investors who claim the purchase of SolarCity was a strategic error simply meant to bail out his cousins and that Musk deceived shareholders. A collaboration with Home Depot evaporated, and, with few solar roof tiles available and the supply of its Powerwall residential storage batteries severely limited, sales haven’t matched initial enthusiasm.
A new version 3 of its glass Solar Roof tiles was revealed in 2019 during a webcast in October. Tesla’s vice president of technology, Drew Baglino, said on the call that the new Solar Roof uses different materials and fewer parts than prior versions, making it easier to install.
Tesla’s mission is to accelerate the world’s transition to sustainable energy. Solar energy is crucial to these goals. The new Tesla roof, a combination of solar cells and special glass, will be produced at its Buffalo Gigafactory. The state of New York invested $750 million in taxpayer money to rehab the factory in exchange for the creation of 1,460 jobs by April, 2020. Should Tesla fail to meet those job creation goals, it would face a $41.2 million penalty.
But hope springs eternal at Tesla. In the past month or so, the company has posted numerous listings and hiring events for new Tesla Solarglass installers across the country. The products are undergoing testing at the Fremont factory under several canopies to protect them from inclement weather and passing drones. The first installation of version 3 of the Solarglass roof in California is complete.
Should Tesla be able to solve its original problems in this division, the Solarglass Roof will be pivotal to the company’s overall fiscal picture, starting with the simple equation that the product should come in below the cost of an average new roof plus the cost of the electricity the home needs over 1–2 decades. The Tesla roof tiles come with a warranty of 25 years.
Certainly, the transition to 100% renewable energy raises some profound questions as society transitions away from life that revolves around fossil fuels. Challenges will arise around source intermittency, the need for storage and grid redesign, and the difficulties of electrifying heavy transport and many industrial processes. However, we have the technology we need today for all of that.
The signs are aligning favorably for a more consistent Tesla Energy focus in which a sustainable energy ecosystem will enable homeowners, businesses, and utilities to produce and manage renewable energy generation, storage, and consumption. After all, Tesla has led the way with all-electric transportation. Why not sustainable energy?
Since the company’s inception in 2003, Tesla’s mission has been to accelerate the world’s transition to sustainable energy. Most recently, Tesla stock has been strong since the company’s Q3 earnings release in late October and is up more than 30%. How much of that value is quantifying the potential future of Tesla Energy?