In recent years, the fast-growing popularity of solar panels has intensified a central challenge: how to use the sun’s energy when it isn’t shining.
Now, Tesla Motors, the maker of luxury electric sedans, says it is taking a big step toward meeting that challenge with a fleet of battery systems aimed at homeowners, businesses and utilities. The company’s foray into the solar storage market will include rechargeable lithium-ion battery packs that can mount to a home garage wall as well as battery blocks large enough to smooth out fluctuations in the grid.
“We’ve obviously been working on building a world-class battery, a superefficient and affordable way to store energy,” said Khobi Brooklyn, a Tesla spokeswoman. “It’s just that we’ve been putting that battery in cars most of the time.”
To herald its ambitions in the field, the company scheduled an event Thursday night at its design studio in Hawthorne, Calif., with Elon Musk, its chief executive, presiding.
In a news conference before the event, Mr. Musk said the consumer battery, called the Powerwall, would sell for $3,500, and was derived from the batteries that Tesla uses in its Model S vehicles. The device, which Tesla will start producing later this year, will be installed by licensed technicians.
The batteries will be connected to the Internet and can be managed by Tesla from afar. Customers can connect up to nine battery packs to store larger amounts of power.
“If you have the Tesla Powerwall, if the utility goes down, you still have power,” Mr. Musk said. He added: “The whole thing is an integrated system that just works.”
Energy and auto analysts have generally responded positively to Tesla’s move. “Elon thinks that there’s a long-term gain to be made or a long-term play not only in electric cars but also in electric energy storage — and he’s probably right,” said Karl Brauer, an analyst at Kelley Blue Book. “There’s a universal application for portable energy and storable energy that goes to everybody. It’s really just a matter of getting the business model together.”
Tesla’s announcement comes as energy companies are moving in the same direction. Sungevity, a leading solar installer, announced a partnership this week with Sonnenbatterie, a smart energy storage provider in Europe, to begin offering their systems to its customers. NRG, one of the largest independent power producers in the United States, is also developing storage products.
“We have to be in this space,” said Steve McBee, chief executive of NRG Home. “If your goal is to build a meaningful solar business that is durable over time, you have to assume that that solar business is going to morph into a solar-plus-storage solution. That will be mandatory at some point.”
Still, the market is young and, some experts say, Tesla has the advantage of reach and scale — as well as a $5 billion battery production plant under construction near Reno, Nev., that it calls the Gigafactory.
“Tesla’s not the only one doing it, but Tesla can bring it to a wider audience than most other people can,” said Shayle Kann, a vice president at GTM Research, which tracks clean-tech industries. “Once they get the Gigafactory up and going, they will be able to deploy on a scale that no one will quite be able to rival. So they may have a cost advantage in that.”
Tesla has been refining its storage business for a few years, working with a number of companies including Jackson Family Wines, the electric utility Southern California Edison and the installation company SolarCity, of which Mr. Musk is chairman and whose founders, Lyndon and Peter Rive, are his cousins.
The Tesla systems are designed for different scales. The home battery, roughly four feet by three feet, would allow solar customers to have power in the event of an failure, draw from it when utility rates are higher and use more of the electricity their panels produce, easing reliance on the grid.
For utilities, they can help compensate for fluctuations from intermittent sources like solar and wind — whose production can dip sharply or stop altogether — as well as meet demand during peak periods.
And for businesses, they can help lower demand for electricity from the grid, which in turn can lower costly demand charges.
Amazon Web Services, which manages cloud-based computing systems and has a goal to derive all its energy from renewable sources, is beginning a pilot program with Tesla in Northern California.
“Batteries are important for both data center reliability and as enablers for the efficient application of renewable power,” James Hamilton, distinguished engineer at Amazon Web Services, said through a spokeswoman. “They help bridge the gap between intermittent production, from sources like wind, and the data center’s constant power demands.”