Why Tesla is smart to launch Powerwall in Australia

Kevork Djansezian Getty Images

American electric car-maker Tesla recently announced it would be releasing its new Powerwall home battery system in Australia before the end of the year.

The Powerwall was launched to much fanfare, promising to give users the ability to store power they have generated, charge from the grid in case of blackouts or to take advantage of lower prices. It isn’t the first of it’s kind, or even the first battery pack to be sold in Australia. Although it might be the most bling.

The technology, 7kWh and 10kWh battery packs that can be mounted on the wall, isn’t breaking much ground either. However, combined with the demand for Tesla’s cars and with Tesla’s shiny new “Gigafactory”, the new batteries could help drive down the price of lithium batteries.

Until the price does go down, the PowerWall may not be right for you. As Lindsay Handmer has already pointed out, Tesla’s batteries don’t make a whole load of financial sense:

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.

But an even more interesting question is why Tesla have picked good old Australia for their test run. After all, we’re quite far from the Gigafactory in Nevada and we only have nine million households to stick a battery pack in.

Here are a couple of possible reasons why:

Australians are early adopters

It’s a common trope that Australians are early adopters. In some cases it’s true. A report by Frost and Sullivan predict that the Australian wearables market will hit $1 billion by 2018, after Zurich reported that Australia had double the rate of wearables pickup as the US or UK.

And it’s not just wearables. Survey after survey have found Australians near the top of smartphone penetration. This recent Deloitte media Consumer Survey has Australia trailing just a few countries, including China and Norway, but again far ahead of the United States:

Smartphone ownership. Picture: Deloitte

Electricity is expensive

Electricity was a concern long before the carbon tax came and went. A report submitted to Parliament in 2012 found residents of four Australian states only trailed Germany and Denmark in how much they paid for electricity. And the rest of the states weren’t far behind.

Australian states (red) all rank high up on the cost of electricty

Combining a battery with a solar array would make it a more compelling setup for many Australians.

Massive solar penetration

While the financial case for plugging your new Tesla Powerwall into the grid to take advantage of off-peak pricing may not stack up, the same is not necessarily true for solar panels. Adding a battery could allow users to tap into all the electricity they produce, and maybe even leave the grid entirely.

And Australians have a lot of solar panels. Thanks to generous government subsidies for small-scale renewable projects, one in five Australians have solar panels:

When you put all of these factors together, it’s small wonder Tesla is rolling out their new batteries in Australia first.

NOW READ: This is how much it will cost to run Powerwall in Australia

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.