Tesla Energy is growing

Tesla`s CEO Elon Musk said last year that their new SUV should be ready in May this year, but I still can`t see in on the market. Why? It`s probably because of their new business? The battery business, which is a $1 billion worth business.

CEO Elon Musk revealed some interesting new details about the new battery business last month. Tesla is on the way to build a Giga battery factory and the company will sell its batteries to industrial companies, utilities, commercial and home-owners.

 

(Picture: Tesla Powerwall)

 

We all know the huge battery in their cars but their new market will be the battery to store energy from solar panels or energy from the power grid to be used for various purposes. Tesla`s Gigafactory is producing two new battery products, which is the larger Powerpack and the smaller Powerwall.

The demand for Tesla`s Powerpack is much bigger than the Powerwall. Straubel said earlier this year that the demand for their Powerpack is 70% of the business and 30% for their the Powerwall. Tesla`s new grid battery business is called «Tesla Energy».

The production is starting in the Gigafactory in the first quarter next year, but the first equipment to make the grid batteries in the Gigafactory will be installed at the end of this year.

So far, Tesla have about 100,000 reservations and the demand for their batteries is «crazy». The reservations are non-binding orders which is worth $1 billion. This is only the beginning and it is estimated to give around $40 million in grid battery sales at the end of this year.

But Elon Mush said that sales for the battery business could be «ten times that number next year», which means $400 million in a quarter. If this growth continue, for all I know, the sales can surpass Tesla`s Model S sales one day?

Well, Tesla is not alone on the market. There are tons of competitors that are already building batteries for the grid and buildings, and the projects using low-cost lithium-ion batteries are booming.

Batteries that let utilities, businesses and solar panel owners store energy is a growing market and 2015 will be a break out year for the battery makers.

A large coal or natural gas plant can generate a thousand megawatts, while a large solar farm can generate hundreds of megawatts of energy. According to GTM Research, there will be 220 megawatts of energy storage projects built in the U.S. You see the growth potential here?

The amount of energy storage projects installed was nine times higher than in the same time last year. The growth for energy storage will grow from 220MW in 2015 to about 858MW in 2019. The demand of low-cost lithium-ion batteries has led to mass production in Asia.

Solar companies are starting to pair batteries with solar panels, and the solar and storage pairing can also make solar energy more competitive with fossil fuels, and Utilities are starting to buy big battery banks which is the vast majority in this market right now.

87% of the 40,7 megawatts of energy storage installed in the U.S came from utility projects in the second quarter, but the battery market for commercial and industrial building owners grew significantly, too, according to GTM Research.

Tesla`s battery market made up 1% of the batteries installed in the second quarter and that was 61% higher than what it was in the first quarter. How big can Tesla`s Gigafactory be? And can it go beyond its present size?