How The Cost Of Powerwall Storage Doubled In 11 Months

cost of powerwall

The cost of a storing each kWh in a Tesla Powerwall is much more than you might think.

 

[Update: on Oct 28 2016 Tesla announced the Powerwall 2 ]

[Update: In June 2016 Tesla updated the Powerwall warranty – details here]

11 months ago Elon Musk jumped on stage and announced the Powerwall.  The Tesla data sheets released after Musk’s presentation proclaimed we would soon be able to buy a 7kWh daily cycling Powerwall for US$3,000. It would be guaranteed for 10 years with an optional 10 year warranty extension available. Treehouse, one of the companies who Tesla announced would be first to sell it in the US declared that $3,000 was the retail price – not the wholesale price and we all went “Wow! Cheap batteries have finally arrived.”.

Those of us in Australia started scribbling on the back of our fag packets and guessed that USD$3000 would conservatively translate to a retail price in Australia of AUD$6,000 after shipping, GST and some margin for an Aussie distributor.

We worked out the cost to store a kWh in the Powerwall using the price of the battery divided by the total number of cycles claimed by Tesla.

The simple sum is:

AUD$6000 / (365 days x 7kWh x 10 years) = $6000/25,550 = 23c per kWh stored.

We acknowledged that this did not include a battery inverter, but for a battery to give this low cost per kWh was unprecedented. If you had a really high peak tariff you could just about make the economics work for storing solar. And as the price came down, it would surely soon be a no-brainer for every solar home to buy a Powerwall.

How reality compares to the hype

Eleven months on and the first Powerwalls are getting installed. And those customers have warranty documents along with their shiny, shield-shaped batteries.

You can read the Australian Powerwall Warranty here. It paints a very different picture to the one we got 11 months ago.

The most important figures for a battery are what the manufacturer will actually warrant. That’s where they have to really lay out what they believe the battery is capable of over the warranty period, and pay out cold hard cash if it doesn’t make those numbers.

In Tesla’s case the minimum warranted total energy output for a daily cycle appears to be substantially less than we assumed when they announced the 7kWh battery.

For a start – at some point in the last 11 months the nameplate capacity of the battery was quietly changed from 7 down to 6.4kWh.

Call me naïve (lots of people do) – but the new spec would suggest to a layman that the Powerwall would be warranted to produce 3650 x 6.4 = 23,360kWh = 23.36 MWh of energy if you cycled it once per day for its 10 years of warranted life.

But the warranty document says differently.

It doesn’t warrant 6.4kWh per cycle of usable energy at all.

It warrants 85% of 6.4kWh (5.4kWh) for the first 2 years (or 740 cycles – whichever comes first).

Then it warrants 4.6kWh per cycle for the next 3 years (or 1087 cycles – whichever comes first).

Then it warrants a mere 3.8kWh per cycle for the final 5 years of the warranty (or 2368 cycles – whichever comes first).

After that it’s out of warranty. So any extra kWh are a bonus.

Here’s what it looks like on a graph I knocked together -with kWh per cycle on the vertical axis and years along the bottom.

powerwall warranty

The minimum warranted energy you can get from the Powerwall cycling it daily.

As you can see you are getting a lot less warranted energy from the Powerwall than if you were pulling 6.4 kWh every night for 10 years. Instead of the 23,300 kWh (6.4kWh x 3650 days) a layman may have expected, you are only warranted 18,000kWh of energy.

But it gets worse. If you look at the red rectangle: for the 5 years that the Powerwall has degraded to a warranted 3.8 kWh capacity, you’ll only get 1,825 daily cycles running it every day for those 5 years even though it’s warranted for 2,368. So you may get even less energy than the area of that box implies. In fact I reckon you are looking at a total warranted throughput of 16,000 kWh cycling the battery fully once per day.

The actual price of the battery in Australia after GST, shipping and a reasonable installer margin has turned out to be about $8,000. So the real cost of warranted storage for the Powerwall in Australia, cycled once per day, is around $8000 / 16,000kWh = 50c per kWh. Double the original expectation.

Sidenote #1: Of course that is the worst case scenario. It may be the case that Tesla have been really conservative in the warranty, and most Powerwall owners may get many more kWh from their unit over its lifetime. But only time will tell if that transpires. Right here, right now, the only numbers that we can hold Tesla to are the ones in their warranty.

Sidenote #2: As the usable kWh get lower it gets more likely that you’ll cycle the battery multiple times per day, chopping peaks in usage and filling gaps in solar generation . So maybe I’m being a bit mean with the 16,000kWh. If we use 18,000kWh – the cost per kWh is slightly better at 44c per kWh

The 50c per kWh is for the battery only. If you add installation and one of the compatible Fronius or Solar Edge inverters, you are actually looking at closer to $12,000 to add the Powerwall to a solar system, giving a cost of storage with daily cycling of 75c per kWh. Ouch.

I’m picking on Tesla in this post because they are the poster child of home batteries and made huge claims 11 months ago. But of course they are not the only battery manufacturer who are warranting a much lower throughput than the headline specs would suggest.

For this reason we’ll be adding a new row to our Battery Comparison Table: “Cost per warranted kWh”, so you can compare all the batteries on the Australian market – that we can get data for – side by side.

But the takeaway is this: before you buy batteries – do your research into the warranted cost per kWh over the life of the battery instead of simply looking at upfront dollars per kWh as per the battery’s data sheet. Depending on battery chemistry, the headline kWh is often very misleading. The only number I’d trust is the one that the manufacturer writes on the warranty document.

About Finn Peacock

I'm a Chartered Electrical Engineer, Solar and Energy Efficiency nut, dad, and founder of SolarQuotes.com.au. My last "real job" was working for the CSIRO in their renewable energy division.

Comments

  1. Rick Steley says:

    Interesting Warranty but I am not sure how the Australia Warranty Guarantee would be applied if the original owner didn’t have an Internet connection or failed to register the product with Telsa, after all there are many locations in Australia that have none or very poor Internet connections, I know I live in one of those areas. There are many locals here who use Telstra Wireless which is only turned on when the user actually wants Internet, not 24/7 so I think that would be an interesting part of the warranty which states that the warranty would be voided in there was no internet connection.
    Regards
    Rick Steley
    PS Love your Blog.

    • Good point Rick. I wonder how that clause fairs under Australian Consumer Law? Any lawyers care to comment?

    • olushola Amole says:

      Dear Rick I read a lot of Finn’s assertions and I can’t say I understand all, like cycling batteries, KWH and how much it costs How much more it will cost as battery life wears over the years. Am a dentist in Nigeria who just built a house and for me the ergonomics of the battery was my first attraction! We are used to an array of up to 33 large batteries littering space In an attempt to store energy from solar power,,,,,quite unsightly. I have some questions; 1) can this battery serve in a tropical country like Nigeria and if it will, will the warranty extend to batteries shipped to countries like mine?2) can any trained electrician in my country install it. 3) the wall on which it would be installed, don’t you feel it should have some added Reinforcement, say more steel as I understand one battery may weigh as much as 97kg 4) what kind of inverter is compatible with it? and finally 5) Electricity is notoriously inconsistent bordering towards non-existent in my country, NIGERIA, can this battery serve me in my new home and all demerits that Eric posed would not matter? Thank you. Amole Olushola Dr

      • athomas says:

        As far as I know, only Tesla approved re-sellers can install
        the Powerwall. If there are none in Nigeria, then you can’t buy the battery. Internet is necessary to validate the warranty too, but again, only if installed by a re-seller.

        I would be cautious about using Lithium-ion where temperatures are high, but the low-voltage (50V) batteries, such as the LG Resu, could be installed by an electrician. There is also a wider range of inverters, whereas the Powerwall is limited to those approved by Tesla. If I were you, I would find a way of tidying the lead acid bank.

  2. Thanks for clarifying the current situation (no pun intended) with Tesla battery storage. As a future buyer, we’re saddened the reality doesn’t match the initial hype. Unless the situation improves a great deal, we’ll be crossing Tesla storage off the RBL.*

    Cheers,
    Lessor
    *Retirement Bucket List

  3. Well, it just reinforces what we all know.A battery is not an option till it falls to $3,000 AU.
    At 23 cents that is what I pay now.
    Also wholesale price has fallen from 8 cents a KWH to 5.1 a KWH but alas we are still being gouged by the retailer and no cost benefit has been passed on except the reduced feed back tariff that solar users are being paid for supplying electricity to their street, so the electricity company pays you 5.1 and still charges 24 cents so in reality they are making money out of you and me.
    It point to one thing and that is the government must step in and put in place a fair price for feed back.
    The whole thing at the moment is corrupt and a joke.
    Maybe in the future a class action by solar users against this unfair treatment might be the answer.
    I would be the first to put my name on the list to send this to a higher court.

  4. Any chance of getting similar data from Redflow’s ZCell? Their press release implies a 10 year warranty at a daily energy output of 10kWh at 100% depth of discharge (I think it is warranted for 10 years or 30MWh whichever comes first) At $19,500 (which is at the top end of their $17,500 – $19,500 installed price) the cost per warranted kWh comes in at 65c which at least means the Redflow product is currently cost competitive with Tesla.

    The cost per KWh will be pushed up by the need for a hybrid inverter

    • roger hancock says:

      Yep there would be no Greater feeling than getting of the grid and away from these robbing Power Company’s .. we are being lied too and Cheated all the way. My last Power Bill I used 776 kwh and fed 2565kwh onto the grid, MORE THAN 3 TIMES WHAT I USED. AND I STILL GOT A BILL OF $140.00 the Service charges etc
      We Should at least Break even Qld;s measly 6.3 cents.. and now i find out even if i went with a battery .. THE INVERTER HAS TO BE CHANGED.. the Battery’s should interface with existing inverter’s .. what a Con

      • Tom Roberts says:

        That’s why Enphase’s AC Battery is truly revolutionary since it does not require any changes to your existing inverter because the storage battery comes with its own built-in inverter, and it is modular, so you can add a few today, then more later on, until your system is 100% optimized.

        • yes I have an enphase inverter battery system only 2.4 kw in batteries but has run extremely smooth since installed, im thinking of purchasing 3 more batteries and 3 more solar panels to take my input to 5kw solar panels and 6kw batteries

  5. Great information for the punters considering Solar Energy Storage Finn.
    Consumers may not be aware but the term ” Peak Shaving” needs to be considered when calculating financial returns of Battery Storage Systems.
    Your friendly energy retailer will shortly slug domestic power consumers with a ” Peak demand tariff ” based on the highest power draw of your home in 30 min increments, billed monthly.
    Even with solar panels if the clouds prevent sufficient power output from your solar PV , causing your home to import ,a peak demand may be triggered. This will register a peak demand tariff and be applied as a fixed demand tariff to a 30 day period of invoicing.
    Battery Storage parameters can be set to draw this peak demand from the batteries instead of importing it from the grid.
    This provides a greater financial benefit when factored into ROIs and LCOE over the warranted battery cycle life.

  6. Peter Thornton says:

    Thanks for this very interesting post Finn.

    I have held off for some considerable time now in installing solar myself as I wanted to install a “Full Monty” system and not get caught like some with having a non-compliant inverter etc.

    Upon recent investigation, it has become very clear to me that many of these current inverter / storage systems will not provide the degree of autonomy and independence that people are seeking. This is because even though systems maybe spec’ed to a certain KW storage rating, the fact remains that one’s consumption is very much limited to the charge / discharge rates of the key components themselves (i.e. the inverter, battery and array size).

    As an example, I am reliably informed by a well respected installer that the LG Chem battery alone only has a charge / discharge capacity rating of 2kW. The Fronius Energy package is another good example where their 3 phase hybrid inverters only have 1 MPPT with a maximum charge/discharge current of only 16A. But here is the kicker, that 16A is then only shared equally across each phase (i.e. the inverter does not dynamically load balance discharge to meet potentially higher demands on any one particular phase). In other words, if you decide to cook a lamb roast for a couple of hours your storage system may not be able to provide the required power to meet this specific demand let alone any other appliance that might be in operation on that phase also, thereby requiring you to draw upon the grid or another client side power producer (e.g. generator).

    In addition, I would have to say that some of the advice I have received in my investigations has been misleading and factually incorrect on many occasions. As an example, some installers are out their flogging the Fronius Hybrid inverter with the Tesla Powerwall and not telling people that the Fronius is not yet fully compliant and interoperable with the Tesla at the moment (i.e. the final solution is still in development and is not expected to be delivered (via a software update and a cable replacement) until Jun/Jul of this year).

    I am still considering all of my options and I am hopeful that the polyphase smart meters I have installed (i.e. Secure Sprint 200s) will facilitate the required load balancing so that I can install and use a larger single phase connected array (10+KW) to meet all of my current consumption demands (e.g. I drive a Mitsubishi Outlander PHEV with a 12KW battery pack so my consumption is a little more than the usual).

    Finn, I would appreciate your take and any advice you may wish to share on these issues please.

  7. Hi all. This is a side issue, so feel a need to ‘vent’. I have a solar system installed by Origin. I noticed a clicking sound coming from the inverter. On checking it told me that a solenoid failed .
    Called Origin: new one sent and installed and reimbursed for the electrician to install.
    On checking my bills, I went back to approximately Sep 2014, where I had received $ for the solar input. After that, nothing! I had wasted 18 months, thinking I had used all my solar production, hence no money being given back to me.
    On approaching Origin, their answer was that they only reimburse one billing period! On mentioning that they have engineers, accountants, system programmers etc, one would think they would have a system that would pick up a faulty system!! Nope, they rely on the customer to continually to monitor their system.
    Check your system at least weekly.

  8. Tom Roberts says:

    The hidden cost of the inverter is a great point. Another great point is the breakdown of the warranty — which is why if you are going to be safe, it would be better to buy Enphase’s AC battery and not 1, but 2 or 3 of them, then with that modular, decentralized approach, you are not putting all your eggs in one basket, figuratively speaking. Furthermore, with Enphase’s built-in state-of-the-art, S-series inverter, their low cost-of-entry storage solution allows the customer to shop just one vendor. What happens when you buy a Powerwall made by one vendor, then the inverter by another , and there is a problem — will the vendors point the finger at each other? Who do you call?

  9. Elon Musk has been making a LOT out of little more than hype for way too long. He’s got some runs on the board, but at one hell of a mountain of public funding to get there!

    Smoooth operator.

    • Tom Courtney says:

      “he’s got some runs on the board”
      He sure has. Billions.
      ZIP2 Sold for $307 million
      PAYPAL sold for $1,5 Billion
      TESLA
      SOLARCITY
      SPACEX
      check this out Elon Musk story,
      https://www.youtube.com/watch?v=mh45igK4Esw
      My favourite saying of his is.
      “if your not part of the solution you are part of the problem”

  10. Tom Courtney says:

    I think we could look at doing it another way?
    Leave your existing grid tie system alone, get maximum FIT
    Buy a off grid PIP 4048 4Kw inverter $1500 or less (I got 2 for $2K) with 3Kw solar charge controller and ac charger and some LiFePO4 Prismatic cells 100 Ah $200 each 15 off = 48 volts= 4,8 Kwh or 4Kwh usable for $3000 and some used 190 watt solar panels for $75 each x18 = 3Kw solar about $1500 or less for thin film, I bought 4Kw of thin Film for $800.
    So for around $6k you would have a stand alone system, That would work in a blackout, 3kw solar panels that charge your 4Kwh usable battery with a 4Kw Inverter to run your house. For $9k a 4kw inverter, 8Kwh battery and 3Kw of solar etc.
    Not big enough you say? The inverters can stack up to 6 in parallel you can add to the battery too and add to the solar as well. Virtual tracking helps.
    How much do you want to spend? How much power do you want?
    The Main Idea is to not use power from your Grid tie system and put as much power into the Grid and get the most back out of your FIT. and let it help pay for your new system.
    The stored power from the battery can get you thru the peak period, and maybe thru the night. I think that is the best size system, to get you thru the night and recharge the next day clouds permitting.
    If you run out of battery the system drops back to grid.
    You need to study and know your usage and size your system accordingly.
    Be realistic its easy to undersize your system and battery and cloudy days don’t help.

  11. 16MWh is a good approximation, Finn, but it’s not conservative.
    The warranted capacity is stated where ambient temperature is 25C+/-2C, and output 2kW (not the claimed 3.3kW output). Increased temperature or load would further reduce capacity.
    But, time or warranted aggregate capacity, will ensure there are no capacity warranty claims, even if used to the maximum, or where conditions differ from the warranty. Tesla make the correct assumption that most users will not be able to fully-cycle the battery each day, but should such circumstances arise, the warranty can’t be exceeded. Of course, lighter loads will reduce rate of decline, but income will be lower, because the stored aggregate will be lower.

  12. Ray Boggs says:

    Excellent article. Thanks !

  13. Good breakdown – this sort of figure should go into the table alongside BOL and EOL capacities (so a simple hi/lo is available) for reference. I’ve seen a few of the lithium offerings and most have EOL at 60% in their spec sheet.

    For a lot of users, as John Lennon wrote: “Whatever gets you through the night, ‘salright!”

    An item is inherently valuable – regardless of what you pay – if it serves the purpose for which you bought it. The figure of “cents per kWh” isn’t one I’d actually thought about before buying a Powerwall as a newbie.

    What I wanted was something to store and shift my solar power into the evening and next morning the majority of the time. I was aware of gel battery systems, and looked into it with a reputable fitter here in Sydney via a work colleague.

    It was a good system with ~13kWh storage (50% DoD = 6.5), though only 4kW panels compared to the 5kW I have now. I just didn’t have $21K to spend, or the space to put it.

    athomas above pointed out that not all users will cycle their battery daily. To look at this in a small sample, I have 20 days’ data from my system tracking battery level. To break it into a couple of simple categories:

    Days where charge hit capacity: 15
    This represents 75% of days, with the “lowest maximum” being 47% during a cloudy Easter weekend, and the average high being 89%.

    Days where charge went <= 20%: 12
    Represents 60% of days. The "high minimum" was 42% (on two occasions – Tuesday and Thursday of the same week) and the average low was 18%.

    These percentages are all reported from the SolarEdge inverter via their web portal API. I only got it working as of 16th March, so only 20 days so far. With the change in seasons it will be interesting to observe.

    Important to note that the SolarEdge stops using the battery when it reports "5%" but I've asked SolarEdge whether that means 5% actual capacity or whether that takes into account DoD 80% of the cell as a safety measure – warranty is important!

    As Finn says above: it will be wait and see. And that isn't just for Powerwall, but for all Lithium cells entering the market, as well as ZCell.

  14. …. PV and battery storage is available for little money

    battery (only) costs per kWh is under 5 cents (euro)
    -or in other words a 20 kWh forklift battery i can buy in Europe for about 1500Euro with allowing only 50% DoD that battery will give me more than 3000 cycles , mine is 13 years old now
    – a clever off grid inverter charger (4000 watt continuous and including a 6000 watt PV Mppt controller) is costing 1000 Euro
    -a 6000 watt PV including cables and frame around 5000 Euro
    -labour ? upto everyone , but 1000 euro should do a lot of work

    conclusion = 8500 Euro for a 6 kW PV with storage or about 12500 Australian dollars (1 Australian Dollar equals
    0.69 Euro)

    a 6 kw PV will produce about 9000 kWh per year in Australia or 90000 kWh in 10 years , so about 14 Australian cents per kWh

    I dont think that people have to wait for Tesla and co

  15. Ken Linder says:

    Part of this tesla warranty issue comes down to the reality of lithium batteries. They don’t cope well with dropping below about 70% of max charge which is why (in real world warranties) their is a lot of degredation over time. They also take damage from being constantly charged back up that last few percent (just like your phone does if you leave it plugged in). Current lithium cells are just not a good tech and they are a very dirty one at that.

  16. Keef Wivaneff says:

    But it’s VAPOURWARE or at least it’s tokenware.
    Just one or 2 carefully selected installations with no evidence of what the actual cost was or any performance data.
    Sad part is that people are putting off their purchase of genuine storage solutions that are available right now.
    I’m using AGM batteries and my off-grid system has worked brilliantly for the last year without me ever running short of energy.
    I have 2.5 Kw of panels and 10 Kw-h of batteries which means I can safely use 2 Kw-h overnight.
    My panels are mounted at a shallow angle which means they still give me about 20% of rated output even on the very worst of days.
    In sunny conditions I use the surplus energy for electric water heater ( much simpler nd cheaper than having solar on the roof)
    Next year I plan to add more panels and then run Electric Storage heaters in the winter.

    My panels are

  17. Nathanael says:

    Crummy markup on importation is hurting you. $3000 USD should be $4000 AUD, not $6000 or $8000.

    • Keef Wivaneff says:

      Don’t worry about it. The PowerWall is just vapourware to try and prop up Musk’s house of cards.

  18. Wade O Kane says:

    I understand the need for an inverter for some electronic appliances, but since all LED’s use DC each “bulb” has a built in retifier to convert Mains AC to DC, wouldn’t it be better if we could get DC LED “bulbs”?
    I mean how inefficient is
    PV output DC
    Expensive Inverter to produce AC for Mains
    AC in Mains fed to LED bulb
    LED bulb retifier Transmorgies AC to DC for emitter.
    And why not a DC heating element for hot water heating?

  19. Tesla have *very quietly* produced a new Powerwall warranty.
    https://www.teslamotors.com/sites/default/files/pdfs/powerwall/Powerwall_Warranty_USA_2-0.pdf

    “In addition, this Limited Warranty does not cover

    (a) normal degradation of your Powerwall’s
    energy capacity over time;

    (b) normal wear and tear or deterioration, or superficial defects,dents or marks that do not impact the performance of your Powerwall; (c) noise or vibration that
    is not excessive or uncharacteristic and does not impact your Powerwall’s performance; (d)
    damage or deterioration that occurs after the expiration or voiding of the warranty period; or (e)
    theft of your Powerwall or any of its components.”

    Essentially, no capacity warranty.

  20. Chris Yorke says:

    A credible and technically literate analysis. At these prices, Tesla’s product is hardly better than Lead-acid storage, is it? I would guess those taking the most interest comprise isolated, semi-rural households and independent farmers who now make do with petrol generators. They are used to spending 50c/kWh for domestic electricity, anyway. But there is not much in this development to get urban dwellers excited.

  21. Chris Walker says:

    Did you mention that the inverter is usually 88% efficient, and the cycle efficiency of the Powerwall was likely <90%.

    I seem to be the first person to mention the word "efficiency" on this web page.

    I use Exide OPzV A600 lead acid batteries, which are a "Rolls Royce" tubular plate, calcium lead acid battery, that always got overlooked, because they were always considered too expensive against AGM and flooded, due to people not understanding the chore of cheap batteries.

    Now we have entered an insane world, where people buy new $800 phones every year, and have money to burn on trendy crap. OPzV batteries still get overlooked, even though they outperform their new rivals.

  22. Just read this report, which seems to contradict some earlier comments(?)

    “The Tesla Powerwall will store seven kilowatt-hours (for $3789), or 10 kilowatt-hours worth of energy (for $4421), a price that is half of what analysts expected. Australian start-up Reposit Power this week secured a deal with Tesla to sell its Powerwall units when they reach Australia early next year.”

    Anyone interested in commenting further on this?

    • Ronald Brakels says:

      I think that report is quite dated, Lessor. Tesla did originally say they were going to sell a 7 kilowatt-hour battery system made for daily cycling and a 10 kilowatt-system made for weekly cycling. The 10 kilowatt-hour one has been discontinued because people weren’t terribly interested in it and when the first Powerwalls were installed in Australia we found out they were 6.4 kilowatt-hours rather than 7. The prices you have are what Tesla said they would cost in the US, converted into Australian dollars. Unfortunately it turned out they weren’t that cheap.

Trackbacks

  1. […] This recent article from solarquotes describes how the actual installed cost of a Powerwall is proving to be double what was expected based on the initial press release from Tesla. The conclusion from the article is that we need to consider the installed cost per warranted kilowatt-hour in order to realistically compare the many energy storage systems that are appearing in the market. They will be adding a row to their comparison chart to this effect which should greatly assist with the increasingly complicated decisions around home batteries. […]

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