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What Tesla is about to announce about gigantic batteries, and why it matters


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The announcement is today! Here is the teaser and the linki to watch the announcement live at 8 PM Pacific and some excerpts:

 

http://finance.yahoo.com/news/tesla-announce-gigantic-batteries-why-195504769.html

 

Excerpt:

 

"Tonight at 8:00pm Pacific, Tesla will unveil its plans to manufacture battery storage for homes, business, and utilities. You can watch here. http://ir.teslamotors.com/releasedetail.cfm?ReleaseID=909910#ftag=YHF87e0214

 

The renewable energy industry has been holding its collective breath for a solution to their biggest problem: energy storage.

 

The last several years have seen solar panel prices drop, solar installations increase, electric vehicle sales rise, and governments and businesses move toward integrating renewable energy into their operations.

 

All of that has brought clean energy solutions closer to mainstream. So when Elon Musk hinted about an announcement for a new product line for renewable energy storage last week, suddenly, that dream became a step closer to becoming reality.

 

"It signals that the storage market is at a point where end customers have been looking for big companies to have their product in the market," said Ravi Manghani, an analyst for GTM Research. "It's a small-but-growing [and] very competitive space and Tesla's putting its stake on the market."

 

Tesla will have a big impact on this conversation and the progression of the energy storage industry, but of course, the announcement can't change the course of history on its own -- so don't get too excited. We still need government regulations and changes in utility models, and California remains one of the few states with tangible growth in the renewable energy market and regulations in place to make sure utilities are providing storage capacity -- though there is massive growth in the market.

 

"We expect [the] energy storage market to grow over 10X in the next five years, and in that sense, having a company like Tesla launch products signals that the expected growth is real," Manghani said.

 

Of the number of customers who deploy solar, those who utilize storage systems makes up a tiny fraction -- only 0.2% of those installations had storage attached to them, Manghani said. However, his most recent report for GTM Research about the energy storage market said that the US installed 61.9 megawatts (MW) of energy storage in 2014, and 2015 will be the biggest year yet, with 220 MW installed. GTM Research reports the industry is expected to grow incredibly fast, from 100% to 250% every year.

 

Drivers of this growth include aging grid infrastructure, growing renewable penetration, high retail electricity prices for end-customers, and backup power for natural disasters and adverse weather events. All these factors have created what seems to be a perfect storm for energy storage, Manghani said. And that means that the old utility model is one step closer to being flipped on its head."

 

Much more in the article link above and here-same link: http://finance.yahoo.com/news/tesla-announce-gigantic-batteries-why-195504769.html

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The Tesla model outlines the purchase of batteries and storage of electricity at night, when the rates per KWH are lower than using this energy in the daytime when rates are higher.

 

My question: Once many houses are equipped with said storage batteries, what is to prevent the utility companies just raising their nighttime rate to equal the daytime rates and thus negating any savings?

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Here was the Wall Street Journal's reporting of a couple days ago:

 

Tesla’s Next Big Idea: Storing Power Giant factory in Nevada would use excess capacity to make industrial batteries to hold electricity

 

By
MIKE RAMSEY and
CASSANDRA SWEET
April 28, 2015 4:24 p.m. ET

Tesla Motors Inc. has long faced questions about whether a company can make money selling electric cars. On Thursday, it will introduce an even wilder notion: vastly expanding the market for stationary batteries.

The Silicon Valley company is expected to unveil plans that foresee it dominating the small market for battery packs for homes, businesses and utilities. Such batteries can store electricity in a building, at a wind farm or next to power lines.

Tesla’s “gigafactory,” under construction outside Reno, Nev., is mainly designed to produce lithium-ion batteries for Tesla automobiles, but as much as 25% of the plant’s capacity could be allocated to battery packs, or “stationary power,” according to company projections.

Chief Executive Elon Musk will have to explain how Tesla’s bet on stationary batteries is good for the bottom line. Just 3% of the batteries that Tesla’s Nevada factory is expected to produce would supply the entire current global market for stationary storage battery packs this year, according to analysts at Lux Research.

“It’s a little bit of a technology looking for a market,” said Cosmin Laslau, a battery analyst with Lux Research.

than 300 home-based battery packs for people with solar panels to try to limit their use of grid electricity.

Tesla said it would show why its new battery pack is a better solution than current market offerings. The promise of the gigafactory, set to open in 2016, is to lower battery costs by 30%, but the market is small and dispersed.

Tesla’s $5 billion battery factory will have a capacity to make 35 gigawatt hours of batteries and 50 gigawatt hours of battery packs a year. Most of the plant is meant to supply batteries to its electric cars, but if sales don’t grow as fast as anticipated, supplying battery packs to homes and businesses could help ensure that 10-million-square-foot behemoth plant is working at capacity.

California and some other states are experimenting with batteries and other devices to store electricity generated by solar panels, wind farms, or from the grid, and spit the power back out when extra electricity is needed, or when prices are high. The Golden State is requiring its big utilities to install enough batteries or other equipment so that they can store 1,325 megawatts of electricity by 2024.

Electric grid operators in Texas and in some eastern states also are using energy storage, powered by batteries, to provide quick spurts of power to smooth the flow of electricity on transmission lines.

LG Chem and Samsung SDI are already supplying lithium-ion batteries to energy-storage projects in California and other states. AES Corp., Advanced Microgrid Solutions, and Stem, have built several energy storage projects and signed contracts to build more, buying batteries from outside suppliers.

New entrants have been joining the small U.S. energy-storage market in hopes that demand will grow as battery prices fall. Among them is Cygnus Energy Storage, a Colorado-based startup that aims to supply utilities with batteries that hang from utility poles.

The world’s battery suppliers are waiting to see what type of storage product Tesla unveils, how much it will charge, and whether it has customers lined up, said Sam Jaffe,CEO of Cygnus. Venture capital investors won’t consider funding any similar companies “until we see what Tesla is doing,” he added.

It is unclear how much the Tesla batteries would cost. SolarCity told California regulators last year that the retail price to install an average home battery of 5 kilowatts in size was $23,429. State battery subsidies in California can cut the price by 40% or more, while federal tax credits for some projects could reduce the price further.

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It should be interesting.. I'll not be holding my breath. :P

Telsa Motors Stock Falling on eve of announcement!

 

TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio answered some Twitter questions on the floor of the NYSE earlier today. When asked about Tesla Cramer said the stock is "cold" and "overvalued."

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It's not about economics any more.

 

You can still see quotes like this one, "“It’s a little bit of a technology looking for a market,” said Cosmin Laslau, a battery analyst with Lux Research." but not as often as ten years ago. Back then it was all about "return on investment". But a lot of that rhetoric has changed. It might not be important...

 

What is the ROI on a Ferrari versus a Prius? Well... both depreciate and a new Ferrari will depreciate more (at least in dollars). But the point may be that neither owner cares. Other details of owning a Ferrari or Prius take precedence over mere economics. And while there are automobiles that can appreciate in value, there aren't very many of them. Yet people still persist in buying more car than they need and newer cars before the old one is even two years old.

 

Solar power might move in that direction; in fact, for many RV owners - and we all know a couple of them - it already has. On another forum the alternator in a member's motor home stopped working. He was advised to start his generator and hit his "boost" switch to connect his starting battery bank to his "hotel" battery bank (the generator normally only starts the starter bank in his model). So he's driving down the road with his generator going and is in good shape. Heck, lots of us do that with motor homes to keep the big AC units cooling our vehicles. But with solar panels he wouldn't have to run his generator; he could just hit the boost switch and be good to go. At least until dark. Maybe he'd feel good about having the foresight to put those panels up (I did it for less than the price of a generator). Maybe others might think that it's a good idea, too.

 

Having your home lit up just like every night, watching "Dancing with the Stars" while the rest of your neighbors caught up in a power failure (around here it's almost always some drunk driving into a power pole) sit around a dark room lit by a few candles has a certain appeal for some homeowners.

 

When it's perceived as avant-guard then economics moves down in importance for a growing segment of the populace (witness the Apple watch; or just the smart phone).

 

And if it becomes viewed as patriotic.....

 

WDR

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Why discuss when he it'll be live in about 5 minutes on the link above.

 

Here is an Investors.com article from a few hours ago that takes a different tack.

 

Tesla's Thursday Night Battery Reveal Packs Power

 

Excerpt:

 

'"Today Tesla will announce the missing piece to building a sustainable future," it said of the "Energy Storage Event" to be webcast live from the carmaker's website. "Tune in to learn more about Tesla's solution to this critical step in the mission to enable zero emissions power generation."

 

Microgrids Heighten Interest

 

A utility-scale battery array announcement could be a bigger deal than the expected home battery announcement. With several companies announcing "microgrid" products or projects last month, interest is mounting for power systems that can serve something the size of a corporate campus or a remote community. Stationary batteries can help smooth out the power flow at times when renewables are not producing (lack of wind, or lack of sun, for instance).

 

Along with building the multibillion-dollar battery Gigafactory in Nevada, Tesla has teamed up with solar installer SolarCity, where Musk is chairman and the top shareholder, on battery-based storage for homes and businesses that have solar panel systems. That stored power can be used when the sun isn't shining.

 

Tesla and SolarCity last month said they've teamed up to build entire tiny power grids using Tesla lithium-ion batteries. Samsung SDI also announced a strategic alliance along similar lines, with global automation technology firm ABB (NYSE:ABB). And solar power company SunEdison (NYSE:SUNE) made a key grid-related acquisition.

 

About 230 California households in California, and 100 elsewhere, currently have a Tesla Stationary Battery installed in their homes, Global Equities Research analyst Trip Chowdhry said in a research note last week.

 

"It is widely believed that Google (NASDAQ:GOOGL) has a few Tesla Commercial Grade Stationary Batteries in a couple of their buildings," Chowdhry wrote. "It is also believed that the new Apple (NASDAQ:AAPL) campus will have Tesla Commercial Grade Stationary Batteries."

 

Chowdhry noted that one user whose battery he reviewed charges from his home solar energy system, "and when the battery is fully charged, energy is sent to the PG&E (NYSE:PCG) Grid for rebate on Electric bill."

 

That article is here: http://news.investors.com/043015-750520-tesla-motors-thursday-april-30-battery-announcement.htm?ven=yahoocp&src=aurlled&ven=yahoo

 

If you sincerely believe there are issues, you guys need to short Tesla. I put my money where my opinion was on Tesla. ;)

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Amen Troy.

The utility companies are only coming round because big batteries can save them money over peak plants. Micro grids are beginning to become a community thing. And the beta testers for Tesla and Solar City are at the forefront. Hell, they are inventing a lot of it as they go along.

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