Is the Tesla Powerwall 2 worth buying and how does it compare to other energy storage solutions?

Published on 12 Mar, 2018 by Andrew Sendy

10 minutes read

Categories: Solar 101, Solar batteries, Solar batteries storage, Solar power


Powerwall 2

Image source: Tesla

Tesla's Powerwall has recently received a ton of press coverage as the backbone of a system designed to save one Australian city $1.5 million. However, long before this venture, Tesla released the first Powerwall back in 2015 and then released the Powerwall 2.0 a year later.

When it comes to the question of whether it is worth buying the Tesla Powerwall 2 there are really three sub questions that need to be answered:

  • Is the power it will store enough to make it economically viable;
  • Is it the best value solar battery energy storage solution on the market in 2018; and
  • Should I hold off buying the Tesla Powerwall 2 given the rapid state of advances in this space.

Before I answer these questions, and offer my opinion as to whether or not I would buy a Powerwall 2, here’s the current state of play on the Powerwall 2 as at March 2018. I am mindful that things are changing so quickly in this space that new features may be added or removed and prices may change by the time you read this.

What is the Powerwall 2 and how does it work?

Powerwall is a rechargeable home battery system that stores energy from solar or from the grid and makes it available on demand to meet the electrical needs of your house.

It is now an AC coupled energy storage solution which means it can take in AC electricity from either your standard grid connect solar inverter or the grid itself, convert it to DC electricity that can be stored in the battery and then, when this excess energy is needed, convert it back to AC electricity and use this energy to power your home or business.

The big difference between this solution and the previous Powerwall model is that this unit contains its own battery inverter and battery management system.

With the previous Powerwall model, the DC coupled Powerwall 1 you needed to also have a hybrid battery inverter.

The overall solution is two metal boxes, one (which looks like a very elegant giant iPhone) contains the inverter and the Lithium-Ion battery and the Backup Gateway. The Backup Gateway provides energy management, metering and monitoring functions for Powerwall. It controls connection to the grid, safely disconnecting your home and starting backup operation during an outage. The Backup Gateway also includes communication functions for up to 10 Powerwalls, and receives over-the-air updates for the system.

Powerwall 2 backup gateway

Image source: Powerwall 2 manual guide

The Backup gateway is the part of the system that interfaces with your homes existing electrical supply and so, for this reason, the backup gateway is usually installed near your main electrical switchboard.

What is the basic mode in which the Powerwall operates?

The Powerwall operates differently depending on what mode it is in.

Its most usual mode is self-powering your home. What this means is that whenever the solar system on the house is producing more energy than the electrical appliances in the house are using then the Powerwall will grab that excess energy and store it in the battery until the battery is full. Whenever the electrical demands of the house are in excess of what is being produced at that instant by the solar panels then the Powerwall will release the energy in the battery to power those electrical loads until such time as the battery is fully discharged.

This will mean that even during the day there can be times where the battery is charging and other times it is discharging. At night, when you are producing it will almost always be discharging if your house is using electricity. Once the battery has reached its programmed depth of discharge then it will stop supplementing your electrical needs and you seamlessly roll back to full grid power.

Does Powerwall 2 provide back-up power when the grid fails?

Many readers may not be aware but when you have a normal grid connect solar system then when the utility grid fails it is a legal requirement that the grid connect inverter shut down the solar system to prevent feeding power back into the grid whilst a linesman is working on it.

When the Powerwall is installed it has an electronic disconnect that can disconnect your house loads, solar and Powerwall from the grid and your house can then use either your solar or your stored energy in your Powerwall battery to run the electrical needs of your house.

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How much power can Powerwall 2 supply in a black out and for how long?

The rate at which Powerwall will discharge power to meet loads is limited to a constant output of 5kW and a short burst of 7kW. So while operating in backup modes you cannot use electrical appliances with a combined draw of more than 5kW, which is just over 20 amps on a 240V.

The length of time for which it can run these loads depends on how much energy was stored in the battery when the grid failed and how much power you use.

If the battery was fully charged when the power failed, and your house uses approximately 2kWh per hour then it could run your house for almost 7 hours.

To provide for greater longevity of power supply for critical appliances in a black out some consumers who buy Powerwall only wire the system to backup specific loads, such as their refrigerator such that these important appliances will last longer if the grid is down for a long time. If a Powerwall was only running a refrigerator and some lights it could possibly last for days.

How much energy can the Powerwall 2 store?

The Powerwall 2 can store 14kWh of energy.

Given the average US home uses around 28kWh per day this is quite a reasonable amount of storage to deal with a lot of the night time electricity use of a typical house

What is the warranty on the Powerwall system?

Tesla offers a 10-year warranty on their Powerwall systems with the understanding that these systems will be used daily to store and then discharge power regularly. While the system was originally designed to be used with solar panels, it can be used independently if you wanted a backup storage unit that feeds off the grid.

Tesla guarantee that the battery will store 70% of its rated power output at 10 years. I assume by this they mean at all times out to ten years although the warranty only refers to that point in time.

How does the Powerwall 2 compare to the RESU solar battery from LG Chem?

Tesla powerwall compared to LG Chem

There are currently only a limited number of major competitors active in the residential solar battery storage solutions marketplace.

The most noteworthy competitor to the Tesla is LG, the widely known electronics conglomerate and battery manufacturer from South Korea. The second is the long standing and well respected battery maker Sonnen. However, many large and reputable battery and electronics manufacturers are developing solutions as we speak.

LG’s RESU is one of the most versatile energy storage solutions available in three different sizes ranging from 6.4kWh of energy storage to their largest 9.8kWh battery pack.

It has been used to a limited degree in Europe and Australia to pretty high acclaim.

There is little difference between the RESU and the Powerwall 2 in terms of the price and the warranty.

The RESU comes with both a 10-year warranty and a guarantee that it will hold 60% of its capacity at 10 years. This is slightly less than the 70% that Tesla warrants.

It is priced at around $5,000 for the 9.8kWh solar battery this is around 40% less storage capacity than the Tesla for a similar price.

How does the Tesla Powerwall compare the Sonnen Eco energy storage solution?

Tesla powerwall compared to Sonnen Eco

The other major player in the game is Sonnen with their Eco storage device. Sonnen is one of Germany's most successful battery manufacturers and the Eco has a lot to offer. The device itself is simple and clean on the outside and can be wall mounted out of the way for low-maintenance power storage. However, the Sonnen Eco is currently priced at between $6,000 for the smallest units up to more than $10,000 for the 16kWh unit, without including installation fees.

Even the largest of the Sonnen batteries only have a charge and discharge rate of 3kW which is also inferior to the Tesla Powerwall.

On the other hand, Sonnen has gone one step further than LG with their warranty to guarantee a 70% capacity retention over 10 years, the same as the Powerwall.

Another thing that neither the LG RESU or the Sonnen ECO have is an inbuilt battery inverter. In both cases, you also need to buy a hybrid inverter as well as the battery. With the Tesla Powerwall 2 this is included.

When all is said and done Powerwall 2 is hands down the best solar battery and energy storage solution available in the US market in 2018...by a long way

Ultimately, the Powerwall 2 is popular for a good reason, and it shows a lot of promise. It is certainly the most affordable and convenient option for solar users in the US to date, but there will definitely be stiffer competition in the next couple of years. You can learn more about the Powerwall by contacting SolarReviews today and speaking to one of our solar agents in your region.

So now we have worked out Powerwall is the best solar battery option, would I buy one?

The problem that the Powerwall and all other solar batteries and energy storage solutions have is that there is net metering in over 30 states in the US and net metering effectively.

So for those that live in states with net metering there is little point storing your own power in a physical device when net metering gives you the same economic result without an investment in a physical product and without having the worry about the degradation in performance over time of a solar battery solution.

So if I live in a state with net metering then right now I am not buying battery storage no matter how good the deal is.

However, with the continuing rise of time of use electricity rates this might change this situation.

All public utility commissions are looking at ways to smooth out electricity use and reduce use at the peak times. It is the few moments of extreme peak use per year that can necessitate billions of dollars being spent on upgrading the grid infrastructure.

By making power at peak times of use more expensive, and power use in times of low grid use cheaper, we hope to move use away from the peak times and avoid capital expenditure on grid infrastructure. This is a change from the traditional tiered rate electricity plan which took no notice of what time of day you used power just how much total power you used over a month.

California has mandated the adoption of time of use rates for residential customers of investor-owned utilities in that state by 2019.

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Will time of use power shifting be the savior of the Powerwall 2?

One of the great things about the Tesla Powerwall and the Backup Gateway is that it uses a series of electronic relays and switches that can be controlled by software.

This firmware can be updated by Tesla over the internet to both fix any bugs and also provide for new functions.

One such new function that should be upgraded this year in firmware is a power shifting function.

This will allow you to ensure that the Powerwall is fully charged by the end of off-peak times when electricity is cheap so that the full 13.5kWh of energy stored can be released during peak timing.

This will substantially change the economics of adopting the Powerwall. If we take the biggest of the investor-owned utilities in California as an example, PG&E, their peak time of use power rate on their E-TOU B plan is 10 cents higher than their off-peak rate. However, the difference in peak and off-peak rates in winter is quite small

Does the SGIP (self-generation incentive program) and time of use electricity rates in California make buying a Powerwall a no brainer?

So Powerwall is a great solution at a relatively affordable cost and time of use power shifting will add to the return it gives you to an extent, but economically it is still a line ball decision.

The thing about solar batteries and other energy storage is that the biggest economic benefit of its adoption is to the grid itself rather than the owner of the battery. Putting even a small amount of storage on a grid can avoid the need to upgrade that grid. In recognition of value of this the California PUC has authorized funding for a Self Generation Incentive Program that pays at rate beginning at $500 per kWh and reducing through a series of steps to $300 per kWh.

There is a reserved SGIP budget for each investor owned utility controlled by the PUC.

Given the 14kWh energy storage capability of the Powerwall this is a rebate of $4,200 on step 3 of the SGIP program for a solution that costs $5,500 plus installation costs.

This would mean the storage solution costing only $1,300 plus installation. At this price I think people in California are crazy not to buy a Powerwall. SolarReviews research put the installation cost of a Powerwall at between $1500 and $2700 meaning all up, with the SGIP you could get a Powerwall installed for a cost of between $2,800 and $4,000. As they say, run don't walk...You can get an installation quote from a Powerwall installer.

 

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Author: Andrew Sendy

As chairman of Solar Investments Inc and chairman of the largest solar panel installation company in South Australia, Andy is passionate about solar power. With his unique working background he writes on the residential solar industry in America from a unique perspective.