Is the Tesla “Powerwall” Worth It?

On May 1 Tesla announced the launch of its new Powerwall, a battery that can be installed in a home to store solar production for consumption at night or off-peak.

At a price of $3,500 per 10 kWh, it's up there along with the cost of the solar installation itself. Is it worth it?

Let's look at the numbers:

• The Powerwall can store 10 kWh of electricity.
• The most recent report from the US Energy Information Administration says we use, on average, 16 kWh of electricity per household per day.

Let's assume the best case for the battery:

• None of your daily solar production can be used when it's produced,
• You cannot sell it back to the grid,
• Each battery receives enough solar power to reach full charge each day,
• Each battery is drained to zero each night before you go to bed,
• In other words: your solar panels are totally useless without a battery.

In this best case, you save 10 kWh per day divided by 16 kWh per day = 62.5% of your electricity consumption.

Let's see how much that is worth:

• The National Grid rates during the winter were approximately $0.24/kWh. During the summer, $0.07/kWh (calculated from Boston Globe data). Over an entire year, the average Massachusetts house would spend $936 on electricity.

62.5% of $936 is $585. You will therefore save $585/yr.

Each 10 kWh of Powerwall costs $3,500. (Actually, that might be the sticker price. Installation may cost more.) This means that even in the best case scenario, the Powerwall won't break even for six years ($3,500 divided by $585).

The reality is likely to be far different from the best case scenario. You will probably be able to sell some of your solar back to the grid, so it won't charge the batteries. You will probably not use all 10 kWh at night, so some of it can be used during production (i.e., refrigerators running all day long). And there is not much to be gained by saving off-peak energy to use during-peak:

• Peak hours are generally all day long, up to 9pm, except weekends, which are the only off-peak time the sun does shine.
• For National Grid (one example of the many utilities in MA), there is a difference of about $0.06/kWh in price between peak and off-peak power.
• Each Powerwall saves only 10 kWh's worth of sunshine.

This highlights how good the "best case" scenario above really is.

So we recommend you wait for better battery technology to come along. If you're super green and you want a Powerwall now, just make sure you get a greater than six year warranty from Tesla.