I was listening to the Energy Storage Geek Out episode on dotnetrocks.com and they were talking about the new Tesla Powerwall. I really love this concept - charge the battery at night when electricity is cheap and then use the power from the battery during peak hours when electricity is expensive. Brilliant!
But it got me wondering: does it make financial sense? So I pulled out my calculator and crunched some numbers.
Here are my assumptions (which could all be wrong, so make sure you do your own homework):
- The daily-use Powerwall can provide 7kWh per day and costs about $3000 (plus installation).
- According to the podcast, the unit is designed to be used for 5000 days (a little over 13 years) before it starts to degrade.
In Phoenix
I live in the Phoenix area and most people here use a time-of-use plan. So that means, in June, we pay about 7 cents a kWh during the evenings and about 19 cents during the middle of the day. That means if I use the Tesla Powerwall, I can use 7 kWh of electricity during the heat of the day. Since I charge the battery in the evening, I only paid 49 cents instead of almost $1.40, saving me 84 cents per day (7kWh x 12 cents = 84 cents)
Now we have different rates during each season, so I applied this logic for an entire year:
| Season | Hi/Low Diff | Days | Savings/Day | Savings/Year |
|---|---|---|---|---|
| Nov-Apr | 0.0309 | 180 | 0.2163 | 38.934 |
| May-Jun | 0.1219 | 61 | 0.8533 | 52.0513 |
| Jul-Aug | 0.1485 | 62 | 1.0395 | 64.449 |
| Sep-Oct | 0.1219 | 61 | 0.8533 | 52.0513 |
| Total | 207.4856 |
So, by my calculation, with a savings of $207/year, it will take 14.5 years to recoup the initial investment of $3000. Bummer.
Los Angeles
I wanted to get at least one more data point, so I looked up time-of-use rates from Los Angeles Department of Water and Power. As near as I determine from their site, it looks like it will take even longer to recoup the cost
| Season | Hi/Low Diff | Days | Savings/Day | Savings/Year |
|---|---|---|---|---|
| Jun-Sep | 0.08 | 122 | 0.56 | 68.32 |
| Oct-May | 0.01 | 243 | 0.07 | 17.01 |
| Total | 85.33 |
Over 35 years to get your money back.
Conclusion
Perhaps if I had solar panels on my roof, this might make more sense. I’m not sure what the trade-off is for storing power in a battery compared to selling it back to the grid. Maybe in other area, where the difference between peak and off-peak rates is greater, it would also make more sense.
But until the prices come down for this technology, it doesn’t make financial sense for me.