ANDREW UDERIAN

February 14, 2015

            Tesla (NASDAQ: TSLA) has begun construction of its Gigafactory, a massive battery cell factory set to begin production in 2020. With initial estimates by Tesla suggesting the Gigafactory’s production will exceed global production in 2013 by thirty percent, stakeholders’ hopes are high. To add to the hype, Tesla has announced that the Gigafactory will not only produce car batteries, but will also produce stationary batteries for homes. Designed for use with solar panels, Tesla’s batteries will help to reduce the grip that traditional power companies have on the market and reduce load at peak hours.

One of the greatest problems facing solar is that consumers often require power when the sun is down and have an excess when it is up. This creates a surplus of power during the day and a shortage at night, causing problems for the grid. Tesla’s batteries will allow consumers to be completely independent of the grid, as excess power generated during the day will be able to be stored at night. Although this is beneficial for consumers, it poses serious problems for traditional energy companies. Not only will power companies lose consumers as they go off the grid, consumers can also sell their excess power back.

In the past, the ability for consumers to sell power back to the grid was never a problem, as adoption of solar and other alternative energies on the per-home scale were rather limited. The rate which consumers are paid for their excess power is rather high, and this will likely pose problems as the adoption of alternative energies becomes more widespread. Too many consumers selling power back to the grid in what is known as “net metering” will cut into the revenues of utilities even further. Attempts have been made to lower the rate at which consumers can sell power to the grid, however these attempts have been met with furious protest from solar panel leasing companies.

Despite the downfalls for power companies, the increased adoption of solar power can only do good for the environment and for society. With fewer people using traditional energy sources and more using renewable ones, humanity’s dependence on fossil fuels and nuclear power will decrease, lowering the amount of pollution being put into the world. Even if power companies will have to restructure their sales models and perhaps begin shutting down power generating plants in response to lowered demand, Tesla’s stationary batteries will prove to be beneficial for the environment.

Once Tesla’s Gigafactory opens in 2020, radical shifts will occur not only in the car market, with a radically increased supply of electric vehicles, but also in the power market. According to JB Straubel, Tesla’s Chief Technology Officer, “The long-term demand for stationary energy storage is extraordinary.” With technology in place for the majority of the population to purchase an off the grid setup, the ways in which power is generated, stored, and used in society will experience a revolution. With this revolution set to occur, the future of power is looking rather bright.

 

Works Cited

Dzieza, Josh. “Why Tesla’s Battery for Your Home Should Terrify Utilities.” The Verge. The Verge, 13 Feb. 2015. Web. 14 Feb. 2015. <http://www.theverge.com/2015/2/13/8033691/why-teslas-battery-for-your-home-should-terrify-utilities>.