Tesla car + electrons are disruptive

System beats price of conventional energy sources

Tesla unveiled the new powerwall 2 with capacity of 14kwh for 5500 USD. The problem with electricity is that measuring electrons is not straightforward. So let’s dive into it. The unit kwh means something like liter or kilo. It’s the unit that you consume or store. In case of the Tesla power wall 2 they sell you 14 kwh of capacity for 5500 USD. What does that mean?

The average household in the US consumes 11,000 kwh per year, or 30 kwh per day. So on average you consume 30 kwh per day. Now, the storage alone is not going to get you much. But combine it with a solar system and we’re talking.

Let’s assume you put 6 kw on your roof. Let’s assume 3,25 per Watt of installation cost. So the system costs 19,500 USD. Let’s further assume you live in California and get an average of 8 hours of sun per day. That means you system produces 48 kwh per day.

Since you are using only 3o kwh per day, you can store the rest in the battery.

I believe this is the key math behind the Tesla power wall 2. For 5500 USD you get a battery which can store the excess energy you produce with your average solar system.

Does that mean for 25,000 USD you get electricity for life? No. Since you cannot survive with two or more days without sun. The system still requires a network or utility to back you up.

Let’s assume the network backup is free.

Now, let’s do the math.

For 25,000 USD you get electricity for 20 years. The 20 years come from the assumption that your solar system will need replacement after 20 years.

In 20 years you consume 220, 000 kwh (20*11,000 kwh). That is 11 cents per kwh (25,000 USD/220,000 kwh). Most US customers pay something like 15 cents or more per kwh.

So, the Tesla + Solarcity power wall 2 is economic at current prices.

Now, let’s add the Tesla car.

Assuming you drive 70 miles/day, that requires roughly 27 kwh of electricity. The math is based on the fact that Tesla cars have 250 miles range with a 80 kwh battery. So, 70 miles will consume 27 kwh.

Now, with a system of 8 kw you produce 64 kwh per day. House + car will consume 57 kwh (30 kwh for the house and 27 kwh for the car). That leaves you 7 kwh for storage.

Now, the 8 kw will cost you 8 * 3250 = 25k + the battery is roughly 31,000 USD.

For 31,000 you get home electricity and car transportation.

Let’s calculate what you pay today for home electricity and car transportation.

Assuming 15c per kwh you pay 33,000 USD (15 cents * 365 * 20).

Assuming 70 miles per day and 3 \$ per gallon and 24 miles per gallon, that makes 8,75\$ per day (70/24*3). For 20 years that is 63,875 \$ (8.75*365*20).

So the equivalent would cost you roughly 100,000 USD.

Conclusion

The Tesla Car+ Tesla power wall 2 + 8kw of solar panels cost you roughly 31,000 USD. For that you get an equivalent value of 100,000 \$ of conventional home electricity + car gasoline consumption.

I might be somewhat off in my math here and not consider all the details but given the large delta between Tesla and conventional you can see how disruptive this technology will be.