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Here's Why Elon Musk Might Have Just Really Pissed Off Your Utility Company

The Tesla CEO has introduced a new battery — not to power its line of luxury electric vehicles, but to support rooftop solar generation for homes and businesses.
Photo by Noah Berger/AP

Tesla CEO Elon Musk appears to have made a significant advance toward a goal that even he admitted "sounds crazy" — "to change the entire energy infrastructure of the world to zero carbon."

Musk unveiled on Thursday a new type of battery — not for use in his company's popular line of luxury electric vehicles, but for homes and business.

Measuring in at 3 feet across, 4 feet tall, and 7 inches deep, the batteries draw energy from rooftop solar panels, helping to power homes and businesses at night, reducing daytime demand on the electric grid during peak hours, and providing energy security during power outages.


Brian Keane, President of SmartPower, a nonprofit-marketing firm that specializes in green energy, said this is a long and eagerly awaited moment for clean power.

"This is a game-changer in energy battery storage, which has really been kind of a holy grail for energy," Keane told VICE News. "Now it seems we've actually found the Holy Grail. What I think we're going to start seeing now is the real transformation in energy we've been talking about for the past decade, maybe even two decades."

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Across the country, consumers who install rooftop solar arrays have increasingly clashed with utility companies over net-metering policies. Net metering allows a customer who generates energy from solar panels to run their meters backward — essentially feeding power into the electrical grid and lowering their utility bill — when they are producing more energy than they are consuming.

Forty-three states and the District of Columbia have such policies, but in recent years utilities have pushed back against net metering in California, Arizona, and Colorado, seeking to limit consumers' ability to ween themselves from utility-generated power.

The Tesla home batteries cost $3,500 for a 10-kilowatt hour (kWh) model; a smaller 7 kWh version is priced at $3,000. For perspective: A kilowatt-hour of electricity can charge your cell phone 278 times or power your laptop for 20 hours.


Musk also announced the launch of a larger battery, called the PowerPack, with a storage capacity of 100 kWh, but is "infinitely scaleable," according to the company.

According to attorney Katie Ottenweller, who leads the Southern Environmental Law Center's Solar Initiative, it's unclear how utilities will react as battery technology matures and cuts into their traditional customer base.

"Battery storage has the great potential to actually increase the value of a resource like solar. If utilities are smart they'll figure out a way to capture that value so that it benefits all of their customers, and benefits the grid as a whole," Ottenweller told VICE News. "But there's also this double-edged sword where if utilities continue to pick fights with their solar customers, it makes it easy, once battery storage is available, for them to defect from the grid altogether."

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Randy Wheeless, a spokesperson for the largest power company in the country, North Carolina-based Duke Energy, said the company has already worked with battery storage technology, and that any battery-enabled solar revolution would likely include utilities.

"Between the money for solar and a battery backup, that's pretty expensive. Some people will like the freedom and have the money to make that happen, but I don't think you're going to see mass defections from the utility," Wheeless told VICE News. "Where we are, the price of electricity is pretty reasonable, so that does cut into the economics of making that work."


And, Wheeless added, if the technology proves to be reliable, and costs diminish, utilities might get into the game.

"I don't think you'll see masses [defect] until the price gets really reasonable," he said, "And then, if it's that reasonable, I think utilities will be a part of that marketplace as well."

Nonetheless, Ottenweller said Tesla's announcement should be a "wakeup call" for utility companies.

"Here in the Southeast a lot of utilities are looking at imposing charges and fees on their customers who want to go solar. The more options customers have, the less they're going to be willing to tolerate that kind of treatment," Ottenweller told VICE News. "I'm hopeful this will be a step in the right direction for utilities to really understand the coming reality and take a hard look in the mirror at their business model."

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In Hawaii, twelve percent of homes have some form of solar power — easily the highest proportion in the United States — and all of that energy being fed into the grid is overloading capacity. By letting individual customers store some of their excess energy, Tesla's batteries might provide a solution for utilities, rather than cause anxiety.

"Utilities are at an interesting point where, if they can figure out a way to align their interests with what their customers really want, battery storage could resolve a lot of these conflicts," Ottenweller said. "But it's sort of up to them to decide."

Keane said Tesla's breakthrough could be among the most significant, recent technological innovations.

"Just think of where we're going to be in five years. Think of your first cellphone and think of the one you have now. In a very short amount of time they're basically almost two different devices," Keane told VICE News. "It looks like Tesla's cracked the code on battery storage. It's an incredible success story and, quite frankly, we're at the very beginning of it."

Follow Darren Ankrom on Twitter: @darrenankrom