In late April, Tesla announced the expansion of its product line beyond cars to include battery systems for homes and utilities. Called the Powerwall, the system can store 7–10 kWh of energy and respective costs are $3,000 and $3,500. Adding a battery to a home enables greater utilization of solar generation and of off-peak pricing in time-of-use (TOU) rate plans. For utilities, the home system may be considered a threat because it enables consumers to bypass services entirely; however, it also presents opportunities to mitigate potential energy management problems stemming from the rapid increases in residential solar installations and plug-in electric vehicle (PEV) adoption happening now.
The grid is constantly being monitored to match electricity supply with demand. As demand fluctuates throughout the day, resources are ramped up or down in response to keep grid frequency within a narrow range of around 60 Hz. The more reliable generation resources are in responding to shifts in demand, the more cost-effective the grid is. Traditional generation resources like nuclear, coal, and natural gas are dependable generators; however, renewable resources like solar are not, because generation depends on the weather. This means that solar requires additional grid resources like batteries to backfill lapses and absorb spikes in generation.
PEVs can create additional problems because most can consume up to 6.6 kW from home electrical infrastructure. The most power-intensive appliances in a home (clothes dryer, dishwasher, or oven) can use from 2 kW to 5 kW. While there is enough energy produced by the grid to supply massive amounts of PEVs, there may not always be enough power (instantaneous energy). So the challenge created by PEVs is the collective charging behavior of a 9-to-5 workforce that plugs in at the end of the work day.
In the near term, this behavior is a threat to distribution-level transformers in neighborhoods with high PEV concentrations. In the long term, this may exacerbate problems stemming from widespread solar generation, as the sun will be setting when people are plugging in. The theoretical lapse in generation and leap in consumption will require grid operators to ramp generation assets quickly and significantly; not a cheap or easy exercise.
The root cause of the above challenges is that most electricity is consumed almost immediately upon generation because there are few storage resources on the grid. The PEV itself can be a solution, as grid operators can manage battery charging; or, in more advanced PEVs, the car itself may be able to supply power back to the grid. In both cases, the PEV owner is compensated financially and most of the costs of adding grid-level storage are avoided by the electric power sector. Pilot programs utilizing PEVs for such services are already underway. However, there will always be limits to these services, as PEVs are not always plugged in, don’t always need a charge, and sometimes do need to charge regardless of compensation.
Enter the home battery. Though the upfront costs are high for the homeowner, there are multiple economic benefits that may be had by both the owner and the utility. As mentioned above, it enables lower energy costs for the homeowner, and for the utility, a home battery can directly mitigate the challenges posed by intermittent residential solar generation and PEV charging at the distribution and generation level. Even more than that, it provides an opportunity for energy aggregators and utilities to incorporate homeowners into lucrative grid-service markets in a manner that is more reliable and consistent than PEV integration into these same services. Though reservations have been significant early on, the $3,000–$3,500 price point will be a hard sell to individuals in the mass market; it’s unlikely home batteries will exhibit similar gains to PEV and residential solar market growth without some financial incentives from utilities and/or governments, both of which stand to benefit from this technology.