After receiving approval for an energy generation license in the United Kingdom earlier this year, Tesla has now officially launched an energy service business in the UK in partnership with energy retailer Octopus Energy.
The plan will only be available to owners of Tesla's Powerwall product, which Tesla will use to create a virtual power plant of distributed energy storage systems to optimize electricity usage with Tesla's energy buy-and-sell software platform, Autobidder.
This optimization allows Tesla to charge a much lower rate for electricity than other providers. According to UK Power, the average cost per kWh for electricity in the UK is £0.144/kWh, or about $0.19 per kWh. The UK also operates with "standing charges", a fixed daily rate which averages £0.206 per day, or about $0.27 per day.
Tesla's new energy plan will not include a standing charge, and will price electricity at a fixed rate of £0.08/kWh for Tesla vehicle owners or £0.11/kWh for non-owners. Assuming an average annual consumption of around 8,000 kWh, a homeowner with a Tesla would save about $65 each month. Of course, because the plan requires a Tesla Powerwall priced at £8,000 after installation, the payback period in such a situation would be about 13.5 years.
Tesla's plan does allow users to sell excess energy they have generated, likely with solar, back for the same rates shown above, so the payback period may be shorter for users with excess generation. Over time, as Tesla reduces the price on their energy storage products, payback periods could shorten significantly.
For more on Tesla's new energy plan, see the included video and be sure to follow Tesla Daily on The Street.
Disclosure: Rob Maurer is long TSLA stock and derivatives.