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Tesla's Industrial-Grade Solar Power Storage System

It lets customers go off the grid when utilities charge their
highest rates and provides a backup during outages

By Ashlee Vance
     Dec. 6 (Bloomberg Businessweek) -- It’s weird to see the
big, red Tesla Motors “T” logo hanging from the side of a house
or a building. But it’s the real deal. The company’s march from
the automobile to the home, office, and factory has begun.
     This week, SolarCity, which sells and installs solar panels
for residential and commercial customers, began offering an
industrial-grade power storage unit produced by Tesla. The system
mounts on a wall and looks something like a white mini-fridge
with Tesla’s distinctive logo in the upper left corner. It
contains hundreds of the same lithium-ion batteries that Tesla’s
Model S sedan needs to run and, in fact, has about one-eighth of
the juice found in Tesla’s top-of-the-line battery pack. “If you
go to the end of the manufacturing line at the Tesla factory
where they put the battery pack on, you will see these storage
systems being assembled,” says Pete Rive, the co-founder and
chief technology officer at Tesla.
     The purpose of the storage system is twofold. It lets solar
customers shift off the grid during times when energy companies
charge their highest rates, and it provides a backup system
during power outages. SolarCity has been offering these systems
to consumers on a limited basis—a few hundred customers so
far—and, as of this week, began selling it to commercial
customers as well. Customers do not have to pay upfront for the
hardware but will need, instead, to commit to a 10-year service
agreement with monthly payments.
     The battery pack would cost about $15,000 without financing.
“Our long run goal is to include a storage system with every
solar system we sell,” says Rive.
     Utility companies typically tack on so-called demand charges
during times of intense use. SolarCity uses its own DemandLogic
software to control the functions of the storage unit and weigh
usage vs. rates. “Our software figures all this out and says, ‘We
will give you some juice right now, so you don’t have to pay the
demand charge,’” Rive says.
     At home, Rive has experimented with disconnecting from the
grid for a couple days at a time and relying on the storage
system. “It has enough power for all the critical loads,” he
says. “You can bake a pizza while running your washer and drier.”
(Critical pizza. Check.)
     The association between SolarCity and Tesla is natural fit.
Elon Musk, the CEO of Tesla, serves as SolarCity’s chairman and,
during a road trip to Burning Man, helped come up with the idea
for the company. He’s also the cousin of Peter Rive and his
brother, Lyndon Rive, who is SolarCity’s CEO. During a recent
visit to the company’s headquarters in San Mateo, Calif., about
10 Tesla Model S all-electric sedans were in the parking lot.
     At the most basic level, SolarCity looks like a solar panel
installer. If, however, you dig a bit deeper, the company acts a
lot more like a utility. It’s the leader in solar installations
and has created a network of capacity that now is complemented by
these storage systems.
     The energy companies have taken notice of SolarCity’s
growing ambitions. The company has been dragged into fights over
the rebates people receive in some states for going solar. And
politicians such as Jeff Sessions, the junior Republican senator
from Alabama, have started offensives against the company, which
will leave you shocked by this last sentence. Southern Co., a
utility, is Session’s largest donor.

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