And for good reason. The device, which is aimed at powering homes using solar and wind energy, has a sleek design (it's about the size of a small mattress). However, the concept did not suddenly come out of left field. Tesla's announcement was widely anticipated, and other companies have been foraying into the space, albeit at higher prices.On top of that, Tesla's new battery won't replace your local utility or power grid anytime soon. Here's why.
For one thing, not everyone has access to large amounts of sun, robust breezes or even the financial resources to afford these batteries (the 10kWh model runs $3,500). Though Tesla's battery was over 50% cheaper than many had expected, the true cost of this new system is deceiving.
The advertised price does not include the DC-AC inverter to make the energy storage system work. There also is the the cost of installation by a trained electrician. So the real cost is less attractive than has been reported.
And despite Tesla's 10-year warranty on the battery, hiccups are likely to happen. So even though more people will be tapping other sources of energy, the power grid will still be needed, if only as a backup.
All this should have utility companies breathing more easily.
For Tesla, the stakes to produce affordable batteries are high. The company is placing a big bet in Nevada by building its Gigafactory to mass produce a more cost efficient lithium battery. This is the biggest cost in manufacturing electric vehicles.
And by turning its attention to another market besides electric cars, Tesla is hoping to cut costs further and entice new buyers, including utilities.
But even if the company executes perfectly at its Gigafactory, and is able to mass produce batteries of the highest technical quality, the company will have to navigate the current period of rapid innovation. That will require speed.
There are exciting developments in the battery sector. These include liquid metal chemical compositions by companies such as Ambri, new super materials such as graphene and a greater willingness to explore hydrogen's commercial use.
Tesla will have to stay up with these trends while keeping the price of the Powerwall affordable for large numbers of consumers.
To be sure, the Powerwall possesses a cool factor. But mass independence from the power grid may still be years away.