New concepts

This is an “ideal” figure, and doesn’t include efficiency losses (because these will vary depending on the installation), but around 10 kWh a day throughput is realistic. Think the 0.4kWh doesn’t matter? Think again. In theory an off-grid install could have higher throughput, but it’s a safe assumption that it won’t be 100% utilised over its entire life, because who puts a constant load on their electricity system at home? The installed cost of the Powerwall is around $10,000, which gives a “warrantied” per kWh throughput cost of around $0.28. But those kilowatt hours don’t spring whole from the Earth: the Powerwall needs to be charged, which has a cost. A basic starting point would be offpeak charging, which due to efficiency losses and, you know, the Second Law of Thermodynamics, will consume about 10% more power than it can then discharge back into your house. To be clear: if you fill the Powerwall with 10kWh of electricity by charging from the grid, you will actually have to pay for 11kWh. Of course most Powerwall owners will use it in conjunction with a solar panel system. Charging the Powerwall from the PV panels on the roof is “free” ­ except of course you have to deduct the cost of the solar’s installation. Even if your solar is all paid off because you’ve had it for a while, by “using” electricity to charge the Powerall, you’re not releasing it back onto the grid. So you miss out on your pittance of a feed-in tariff. Your power usage while the sun is up might also impact any savings. Anyone whose PV system doesn’t cover their power use during the day will need to “top up” from the grid to charge the Powerwall. Which costs money. So while this cost to charge from a PV system varies, we have assumed 8 cents per kWh to charge the Powerwall – excluding the cost of installing new photovoltaics (a new solar system price is explored later on). Spending $10,000 on a battery system also has an opportunity cost – for example, the extra interest paid on a home mortgage without that $10K sitting in redraw keeping interest accumulation down.

So roughly, we can still expect at least 7 kWh daily throughput after 20 years. That gives around an extra 31,000 kWh, and drops the price per kWh down to a much more impressive $0.14. But wait, there’s more to the equation than that: the charging cost stays about the same, as does the interest, assuming it is paid off over 20 years. And this gives an average price per kWh of $0.29 – still above what many pay for grid power. Considering the batteries will likely continue getting cheaper, it’s not yet a good purchase for most users. BUT WHAT IF I ADD SOLAR? Factoring in solar is not straightforward, as the savings are very dependent on how much of the solar is directly used, and how much is exported to the grid.

If you switch off all your stuff and just feed that power to the grid, the 5kWh array will produce around $1.70 of power per day, and pay itself off (including interest) in about 11 years. If combined with a Powerwall 2, the spare energy is stored, not sold back to the grid. Take that in account, add opportunity cost, and the payback time is roughly 25 years. For households with high daytime direct solar usage (or higher power costs), these payback times can be much lower. But it’s important to note that adding the Powerwall to a Solar system increases the payback time. WHERE CAN IT WORK? Forget the boring financial stuff for a second: the Powerwall 2 is a great bit of tech, and as prices drop in the future, it will eventually hit an inflection point and suddenly become very worthwhile. For now, it’s only really for those who like to be early adopters, or those with very high power prices. And Telsa loyalists. It can be used for off-grid applications, but bulkier, yet cheaper, lead acid based systems are more cost effective ­ and if you’re fully off the grid let’s be honest: you probably have space for a battery shed too. When (if?) the Powerwall cost per kWh halves again, then it will have reached the break-even point for many users. Our pick? Based on current rate of improvement, Powerwall 4 will be an attractive investment.