Many utilities are seeing the necessity for integrating distributed renewable energy, particularly rooftop solar power, and energy storage into their electric grids. It makes strategic sense for them to do so if they want to keep up with today’s changing energy environment, and several utilities see renewables combined with storage as opportunities for their industry. They are, however, a bit edgy about the $5 billion battery factory Tesla Motors is building.
Outside of the automotive and energy industries, Tesla is regarded as an electric car company. At one time the possibility of widespread adoption of all-electric electric vehicles (EVs) and plug-in hybrids was generally viewed by the utility industry as a headache. However, the industry has more recently been supportive of EVs and has been adding them to their fleets and several large investor-owned utilities have asked regulators to allow them to enter the charging station business.
But as Bloomberg News reported in a recent article, analysts say the utility industry has been slow to respond and Tesla, SolarCity and other companies are moving more quickly to meet growing consumer demand. Tesla and SolarCity are providing combined solar systems coupled with batteries, but on a limited scale at this point. That is likely to change when the battery factor is complete and more batteries can be produced for both cars and the solar-storage installations. Also, Tesla has already installed 135 fast-charging stations.
Firms such as Morgan Stanley have said the company’s energy storage offering for homes and businesses could be “disruptive” for the utility industry both in the U.S. and Europe as the cost of storage systems falls and more utility customers choose to provide all or most of their own electricity.
The Bloomberg article also quoted analysts who said the battery cost reductions Tesla has achieved to date have not been adequately acknowledged and that the company may be able to substantially lower costs more once the factory is in production.