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 At the unveiling of its suite of storage battery systems on
Thursday, Tesla Chief Executive Elon Musk said at a company event
near Los Angeles the new Tesla Energy was far ahead of its
competition in offering an integrated system for generating solar
power and storing it on-site.
"We're just not aware of who would even really be second, honestly,"
Musk said.
Several analysts see a multi-billion dollar market in its infancy as
power companies, businesses and home owners, partly reacting to
government incentives, buy systems that stabilize the grid. They
provide backup for green energy systems which otherwise could be
threatened when clouds move over a solar field or the wind died on a
windmill farm.
And Musk himself is a powerful salesman backed by an attractive
"green" brand.
On the contrary, Tesla is far from the only company offering such
systems, and industry insiders say the cost of a Tesla system, which
starts at $3,000 for a home storage battery pack, is in line with
the rest of the market.
Established and deep-pocketed energy and technology players like
Samsung SDI Co Ltd, LG Chem Ltd and Saft Groupe SA are just a few of
the names marketing products similar to Tesla's - small batteries to
pair with solar panels at homes and businesses and much larger ones
to help utilities shore up power grid reliability.
An array of small companies are also making waves in the field.
Stem, which pairs batteries with software systems for businesses and
is backed by Total and General Electric Co, last year landed a major
contract with California utility Southern California Edison.
Tesla and solar installer SolarCity, where Musk is also chairman,
have been selling small quantities of storage systems for years, and
competition for the limited subsidies has grown.
In 2011, Tesla and SolarCity were nearly alone in claiming
incentives for on-site storage systems in California, state data
shows. Now, however, companies like Coda Energy, which rose from the
ashes of a failed electric vehicle maker, and startups like Stem and
Green Charge Networks are picking up hefty shares of projects, the
data show.
Moreover, subsidies can stop. California's Self-Generation Incentive
Program, which provides $83 million a year to support distributed
generation technologies and has boosted the battery storage
business, is scheduled to expire at the end of 2019.
Power systems can still be pricey for home owners.
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Musk said a single-home residential battery of 10kWh would only cost
$3,500, but installation and an inverter to turn the battery's
direct power into alternating current used in houses could nearly
double the cost of a system to the customer, according to Lux
Research, which tracks technology markets.
"When you factor those things in, actually that's very consistent
with those of us who are in the industry," said Paul Detering, CEO
of Coda Energy, which supplies battery systems to businesses in
California. Coda is owned by Fortress Investment Group LLC.
Still, the market has great potential, in part because governments
are mandating that increasing amounts of energy come from renewable
sources such as solar and wind power generators. Valued at just $200
million in 2012, the global energy storage industry will grow to $19
billion by 2017, according to research firm IHS CERA.
"The number of companies that have reached out to us over the last
six or seven months has escalated exponentially," said Tim Healy,
Chief Executive of energy management firm EnerNOC Inc, which
partnered with Tesla to supply batteries to its commercial and
industrial customers.
Tesla brings a well-known brand that stands for quality and
innovation, and Musk himself, whose charisma and entrepreneurial
bravado have helped quadruple Tesla’s share price in two years.
"There have been other people saying those price points, but a
little bit more quietly. This is helping to reinforce that's the
place we're going," said John Zahurancik, president of power company
AES Corp's energy storage business.
(Editing by Joe White, Peter Henderson and Diane Craft)
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