By Chris Mooney
In late April, Tesla Motors took a step toward upending home energy when it announced the Powerwall, a battery for homes that can provide backup power, and that was paired with higher capacity versions for businesses and even power companies.
Within about a week of the announcement, Bloomberg reported, the company had already pulled in $800 million worth of orders, with the vast majority of revenue not for individual home batteries but rather for larger, company or utility scale applications called PowerPacks. With numbers like that, the energy storage revolution may already be here.
It’s not entirely clear yet how it will play out, though. In particular, a big question mark concerns when a much touted pairing of home energy storage with rooftop solar power — so that people can power their homes at night with solar energy gathered during the day, and need only minimal amounts of power from the grid — will become widely available, not to mention affordable.
Some skeptics have argued that it’s still very costly to buy the Powerwall — the cost is $3,500 for 10 kilowatt-hours worth of energy or $3,000 for 7 kilowatt-hours — and have also objected that at least at first, it appears its chief usage will be simply to provide backup power during a power outage. Indeed, SolarCity announced it was offering the Powerwall with home solar installations for an added cost, but described it as a “battery backup service,” to replace “noisy, dirty fossil fuel generators with zero-emission storage technology.”
Nonetheless, the solar plus battery revolution is coming in very much in the form many have envisioned, argued Nancy Pfund, the founder and managing partner of DBL Investors, a San Francisco based venture capital firm that has invested in Tesla and SolarCity, at a Tuesday Washington Post event entitled American Answers: Powering Cities (I moderated the panel).
“It is a revolution,” Pfund said, adding that “it isn’t that far away.” When asked how much solar energy capacity and battery storage capacity people would need to fully power their homes with solar energy at night and also charge their electric vehicles overnight, she commented, “remember your cellphone, how unfunctional and expensive and huge it was in those early days. Obviously there’s a cost curve that’s coming down…there’s a long waiting list of people wanting to do this.”
Pfund was joined on the panel by Evan Burfield, who created the start-up incubator 1776, and Daniel Nocera, a Harvard professor of energy who invented the artificial leaf — which performs artificial photosynthesis — and founded the company Sun Catalytix, which was recently acquired by Lockheed Martin.
Burfield agreed with Pfund that with the technologies already on the market, you simply need to watch as they evolve — and that will happen fast. “I think the metaphor would be, if you look at the Model X that’s coming out [soon], and you contrast that to the original Roadster, you’ve seen a tremendous advancement in the practicality of electric vehicles,” said Burfield. “I think it’s a really important first step to get these batteries out on the market. [They’re] probably not where we’ll be in another four or five years in terms of advancement.”
Nocera took a bit of a different tack. While he agreed that battery costs will get cheaper thanks to mass production — for instance, through Tesla’s Gigafactory — he further argued that that’s not enough of a declining cost curve to create cheap storage technologies that can really benefit the entire world population (as opposed to just people in wealthy countries, like the United States). “For the future, I worry about with global energy, you’re going to have to have the big change,” he said. Thus, Nocera called for a more fundamental approach — mimicking photosynthesis, which nature of course perfected billions of years ago, as a way of taking solar energy and storing it.
Pfund, though, argued that Tesla and SolarCity have had to encounter skepticism at every stage – and have overcome it each time. “This is a movie we’ve heard before,” she said. “‘You can’t reduce the cost of solar.’ ‘You can’t build an electric car that people will actually drive.’ ‘You can’t get the batteries cheap enough for an entry level vehicle.’ ‘You can’t do this, you can’t do that.’ We have heard every naysayer there is out there, and somehow, Tesla and SolarCity have managed to, you know, sell a lot of cars, install a lot of solar, and achieve very impressive market capitalizations.”
The panelists did all agree that one major sector where there will be a dramatic change thanks to storage technologies is the electric grid. Pfund noted that if power companies can store energy collected by solar panels during the day, they’ll be able to use fewer natural gas-fueled “peaker plants,” which can be dirty and expensive but are necessary for times of peak demand. Nocera added that “That’s what storage is, in a grid sense, it makes it a commodity that people can then set a market on.”
In other words, it does seem like a major energy departure — the arrival of energy storage — is coming. It’s just that we’re in its dizzying, confusing early days.