Tesla’s Powerwall is a great concept — with the potential to reduce electricity costs, tie in with solar and create a smarter, distributed power grid. But how long will it take to actually save you money?
In case you were living under a rock, Powerwall is a 7kWh daily use battery that can be used to power your home and offset some electricity costs. There is also 10 kWh backup model that is aimed at businesses instead of a backup generator.
The Powerwall is likely to be used in a few different ways. Firstly, it could be charged using cheap off-peak electricity, then run your house during the morning, day and night. You could also charge the Powerwall with solar during the day, then use that power to run your home in the evening, night and morning. You could go off grid completely, charging the Powerwall with solar and cutting ties with your electricity company.
Buying a Powerwall and inverter, as well as having it installed is estimated at around $7200 US by SolarCity, or about $9500 AU at current exchange rates. That’s the 10 kWh version, but the 7 kWh won’t be too much different It’s likely that it will be slightly more expensive here, due to shipping costs as well as increases install costs for our smaller user base. A cost of $10,000 AU installed is a good starting point.
The daily use Powerwall is rated at 7kWh. The round trip battery efficiency is 92%, and a good inverter can be 95% efficient. A good (if slightly optimistic) starting point is to figure we need to use about 7.5 kWh to charge the Powerwall, and will get about 6.5 kWh back out.
Electricity prices vary a lot in Australia, so we went straight to our own power bill. This is for a suburban house in Sydney Australia, with AGL, so your numbers may vary. It’s hard to tell what electricity prices will do in the future, so we have assumed they stay about the same on average.
We pay $0.241 per kWh at peak, and $0.0676 for off-peak power on controlled load 1. This currently runs a hot water tank, but could be also used to charge a battery, provided it’s a hard-wired connection. Controlled Load 1 is the cheapest, and is usually turned on for at least 6 hours a night – plenty of time to charge the Powerwall.
At the off-peak rate, it would cost us $0.51 to charge the Powerwall each night. If we use the entire capacity the next day (easy enough for a typical house), we save $1.57 of electricity charges.
So after charging costs, we can save a maximum of $1.06 a day. This gives us a payback time of 25 years. Considering the warranty is only for 10 years, this isn’t a great figure.
In comparison, what if we pulled the $10,000 to buy the Powerwall from our home offset account? Assuming 5% interest, it would cost an extra $500 a year in interest, which is more than the the $387 we would save a year in electricity.
So what if we add solar into the mix? The problem is the very best we could do is save the $0.51 a day charging cost, which amounts to $186 a year. Prices for small stand alone solar installations are hard to find, and a really small system is not typically sold. A system with enough capacity to charge the Powerwall in a day (even when it is a bit cloudy) will cost up to $5000 installed. Assuming few particularly rainy weeks in there, the payback time would be around 26 years. It’s also worth noting that not all existing solar systems and inverters are compatible with Powerwall.
So what if we go off grid entirely?
According to our power bill, we use 816 kWh in 95 days, or 8.6 kWh a day. This is actually crazily low, and AGL actually states that the average 1 person household uses 1216 kWh in 95 days or 12.8 kWh a day. Chalk that up to efficient LED lighting, off-peak hot water and no air-conditioning.
At 8.6 kWh a day, we need at least two Powerwalls to cope with cloudy days. Even so, we would need to be extra frugal through long periods of cloudy weather.
Fully installed, we are unlikely to end up with much change out of $30,000.
On the plus side, we can now save our entire power bill, which includes the supply charge. In this case, $2.61 a day. Unfortunately, this actually means our payback time is around 31 years, even worse than being tied to the grid (at current electricity costs).
Powerwall is a great concept, but it’s not exactly new – off-peak and solar battery banks have been around a long time. The main benefit is that it’s a lot smaller and easier to install. It’s also great to get people thinking about ways to save energy and be more efficient.
One major benefit is that Powerwall keeps you going during a blackout. In our experience, blackouts are very short in duration and few and far between. Not to mention, with a USB Power bank that can output 12v for our modem, plus laptops and tablets, the essentials are covered.
As prices drop with increased production, Powerwall will become more economically viable, but for now it’s only going to appeal to early adopters, or those in niche situations.
It’s also worth noting that electricity companies are likely to respond to technologies like Powerwall, which could include raising off-peak electricity costs. It’s hard to predict, but this could make the payback time significantly longer.
Of course, these are not hard and fast numbers. Electricity costs can vary a lot, so take a look at your own bill to see how much you can save. If electricity costs a lot more in the future, the payback time could be drastically shorter. Check out the Powerwall for yourself over at Tesla.
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