Tesla Powerwall: Crunching The Numbers For Australia

Tesla's Powerwall is a great concept -- with the potential to reduce electricity costs, tie in with solar and create a smarter, distributed power grid. But how long will it take to actually save you money?

In case you were living under a rock, Powerwall is a 7kWh daily use battery that can be used to power your home and offset some electricity costs. There is also 10 kWh backup model that is aimed at businesses instead of a backup generator.

The Powerwall is likely to be used in a few different ways. Firstly, it could be charged using cheap off-peak electricity, then run your house during the morning, day and night. You could also charge the Powerwall with solar during the day, then use that power to run your home in the evening, night and morning. You could go off grid completely, charging the Powerwall with solar and cutting ties with your electricity company.

Buying a Powerwall and inverter, as well as having it installed is estimated at around $7200 US by SolarCity, or about $9500 AU at current exchange rates. That's the 10 kWh version, but the 7 kWh won't be too much different It's likely that it will be slightly more expensive here, due to shipping costs as well as increases install costs for our smaller user base. A cost of $10,000 AU installed is a good starting point.

The daily use Powerwall is rated at 7kWh. The round trip battery efficiency is 92%, and a good inverter can be 95% efficient. A good (if slightly optimistic) starting point is to figure we need to use about 7.5 kWh to charge the Powerwall, and will get about 6.5 kWh back out.

Electricity prices vary a lot in Australia, so we went straight to our own power bill. This is for a suburban house in Sydney Australia, with AGL, so your numbers may vary. It's hard to tell what electricity prices will do in the future, so we have assumed they stay about the same on average.

We pay $0.241 per kWh at peak, and $0.0676 for off-peak power on controlled load 1. This currently runs a hot water tank, but could be also used to charge a battery, provided it’s a hard-wired connection. Controlled Load 1 is the cheapest, and is usually turned on for at least 6 hours a night - plenty of time to charge the Powerwall.

At the off-peak rate, it would cost us $0.51 to charge the Powerwall each night. If we use the entire capacity the next day (easy enough for a typical house), we save $1.57 of electricity charges.

So after charging costs, we can save a maximum of $1.06 a day. This gives us a payback time of 25 years. Considering the warranty is only for 10 years, this isn't a great figure.

In comparison, what if we pulled the $10,000 to buy the Powerwall from our home offset account? Assuming 5% interest, it would cost an extra $500 a year in interest, which is more than the the $387 we would save a year in electricity.

So what if we add solar into the mix? The problem is the very best we could do is save the $0.51 a day charging cost, which amounts to $186 a year. Prices for small stand alone solar installations are hard to find, and a really small system is not typically sold. A system with enough capacity to charge the Powerwall in a day (even when it is a bit cloudy) will cost up to $5000 installed. Assuming few particularly rainy weeks in there, the payback time would be around 26 years. It's also worth noting that not all existing solar systems and inverters are compatible with Powerwall.

So what if we go off grid entirely?

According to our power bill, we use 816 kWh in 95 days, or 8.6 kWh a day. This is actually crazily low, and AGL actually states that the average 1 person household uses 1216 kWh in 95 days or 12.8 kWh a day. Chalk that up to efficient LED lighting, off-peak hot water and no air-conditioning.

At 8.6 kWh a day, we need at least two Powerwalls to cope with cloudy days. Even so, we would need to be extra frugal through long periods of cloudy weather.

Fully installed, we are unlikely to end up with much change out of $30,000.

On the plus side, we can now save our entire power bill, which includes the supply charge. In this case, $2.61 a day. Unfortunately, this actually means our payback time is around 31 years, even worse than being tied to the grid (at current electricity costs).

Powerwall is a great concept, but it's not exactly new - off-peak and solar battery banks have been around a long time. The main benefit is that it's a lot smaller and easier to install. It's also great to get people thinking about ways to save energy and be more efficient.

One major benefit is that Powerwall keeps you going during a blackout. In our experience, blackouts are very short in duration and few and far between. Not to mention, with a USB Power bank that can output 12v for our modem, plus laptops and tablets, the essentials are covered.

As prices drop with increased production, Powerwall will become more economically viable, but for now it's only going to appeal to early adopters, or those in niche situations.

It's also worth noting that electricity companies are likely to respond to technologies like Powerwall, which could include raising off-peak electricity costs. It’s hard to predict, but this could make the payback time significantly longer.

Of course, these are not hard and fast numbers. Electricity costs can vary a lot, so take a look at your own bill to see how much you can save. If electricity costs a lot more in the future, the payback time could be drastically shorter. Check out the Powerwall for yourself over at Tesla.

Do the numbers stack up for your home? Tell us in the comments.

Originally published on Lifehacker Australia.



    Thanks for the numbers. I was going to do the maths myself.
    I think the major benefit of blackout protection is a moot point in Australia where our grid is generally pretty good. I don't think we get more than 1 blackout per year and even then they are usually an hour or two.

    Sounds like pure solar is a better investment at this stage, though, as with most of these things, I think the benefit is in new house installations. $10k on top of a new $500k+ mortgage is nothing and it's a long term environmental investment.

      That entirely depends where you live, bit of a stretch to speak for all of Australia?
      Where i live power outages are frequent - especially during the monsoonal season.
      There have even been some outages that last for over a day.

        Then how is the powerwall going to help you? Monsoonal = lots of cloud. And you mentioned the outages can last more than a day

          monsoonal also = dry and sunny with no clouds for the rest of the year

        Well I said "generally pretty good".
        I guess I'm referring to the majority of population centers like major cities. I imagine remote and rural communities would get much more benefit from something like this than the average suburban home owner.

    Wow so entirely not worth it unless you wanna build a shack somewhere where it is not economically viable to get connected to the grid.

      Living off grid is very worth it.

        Got some proof and numbers? Off the grid might be great in theory but if it costs you $30k to set up then it's not really "worth it" is it?

          Why is it all about the costs? Some people just want to spend the money to be off the grid for peace of mind. You can't put a cost against that.
          If you are doing the sums right down to the wire, maybe off the grid living is not for you.
          Work hard, Make money, Live happy (how ever that maybe for you)...

          "Off grid" used to be the only scenario i was aware of for solar installations...until solar in the "suburban sense" became a thing. Then it seemed to be geared to the supplier, with cleverly marketed subsidies via governments following the global trend to seek renewable sources. Of course the generating companies dont want you having storage..that reduces your involvement in their greedy tartiff structure, let alone going "off grid", that removes you as an income stream altogether.
          Something that has not been mentioned as a counter to the up-to $30000 solar installation cost (and that seems exhorbitant..wouldnt you have a totally low-power set of appliances and lifestyle structure, therefore needing only one 10kWh storage bank, not 2?).. .. what about the saved cost of grid connection? Granted this applies only to new builds, but it can be a pretty substantial cost, especially if you are not building in a subdivision with services at the gate.
          Folks "living" off the grid stand to benefit hugely in this context, let alone the other lifestyle advantages. No?

    Electricity providers have invested millions with a return on investment in the decades. With solar (and now Powerwall) proving better value each year and more homes and business switching it is reducing consumption of power from the grid. because of this electricity providers are increasing their power charges inverse to the rate of consumption to still achieve the ROI they require.
    Being an early adopter means you will be paying less much sooner than those choosing to wait as Kw costs skyrocket in the years to come.

    I wouldn't assume that installed cost with inverter was AU$10,000 based solely on US costs. That can vary dramatically depending on local regulations, particularly in the US, and could cost as little as AU$1500 here over the cost of the unit & inverter. Also, if you're adding it to an existing solar setup, you may well have a suitable inverter already.

    The numbers look a lot better for a 10kWh unit - 33% more capacity (and savings) for around 10% more installed cost. And check your local energy prices too - a bigger difference between minimum and maximum kWh prices will also increase the value. If the Powerwall looked interesting to you, don't rule it out based on someone else's numbers - check it out for yourself.

      Absolutely! The numbers will be different for every situation. Hopefully the Powerwall will be cheaper here, but without local prices the US installed prices are a start.

      One thing though, the 10 kWh model is an infrequent use backup only - not for time shifting your power or storing solar like the 7 kWh model.

        Is there any reason you're aware of that the 10kWh model is unsuitable for daily use? Or is it described as "for backups" simply because 10kWh is perhaps more than the average daily usage?

          I suspect it will be due to the same principle as other battery bank applications - the 7KWh unit will be comprised of more smaller, more robust, cells in parallel, so able to feed a larger demand for current and withstand more frequent charging, at the cost of overall capacity

          From the Powerwall Website (http://www.teslamotors.com/en_AU/powerwall)

          7 kWh
          For daily cycle applications
          10 kWh
          For backup applications

          In theory they could be the same unit - just the 7 kWh model has the capacity "reduced" so a full discharge and charge is less of the overall capacity, giving better longevity for daily use.

    The biggest issue is still the number of recharge cycles. From this perspective it will last longer if you use it for the scenario where you charge it over night with cheap tariff. With solar charging the battery degradation will be much worse.
    I would buy it if it would cost less then $1500 AUD including the installation for the over night charging. But I would also bet that if people start doing this then electricity companies will react and change the politics of night tariffs.
    Don't take me wrong I'm big fan of this I would love to disconnect from power grid but I did the math and consider the factors with life expectancy and I don't think it's the time to jump in right now.

      Battery cell degradation is only a problem if there isn't a proper charge controller/monitor in the system. Of if you are deep-cycling batteries better suited to working their upper 40%.

      Li-Ion battery degradation is not related solely to the number of recharge-discharge cycles. even sitting on a warehouse shelf, a battery's capacity will reduce over time.

    Firstly, didn't i read this article a few weeks back? Why does it only say that it was put up today?

    Anyway - the numbers are going to significantly vary from residence to residence. As you stated, your power consumption is quite low. After the first time reading this article i put my numbers to the test and it looked a lot better than yours. Granted, I have a large family and probably a few appliances that aren't running as efficiently as your appear to be, but my payback period would be 16 years (30k, 2800saved, 0.5%).

    In addition to this, if more people jump off the grid, then the operational and maintenance costs of the power companies will be distributed amongst a smaller population. This means that even if fuel costs stay the same (and the indication is that they wont), the connection cost associated with being on the grid will go up.

    While at the moment the pure financial side of this doesn't 100% stack up, when you account for other factors such as the variable cost of electricity service, and the impact to the environment, i feel that this is an investment that i am glad to make.

      Yep, originally published on Lifehacker, as mentioned at the end of the article ;)

      Higher power consumption by itself should not actually change the payback time. However I am not sure how you are factoring it in exactly.

      Our numbers crunch for the entire capacity of single Powerwall unit. Higher power consumption means you need extra Powerwalls, which increases costs. Each unit can only offset a certain amount of power.

      If there are price reductions with buying and installing multiple units, then that will reduce the cost per unit, which could decrease payback time.

      The important numbers are the cost of electricity and the Powerwall cost.

        another very important number is % utilisation of Powerwall's rated capacity - if consumption is not close to a multiple of 7kWh then cost calculations will be skewed. In the example if consumption is 8Kwh per day the calculation should be for a one-Powerwall system with grid-power topup to make up the excess, rather than two Powerwalls. I also expect the daily use 7Kwh Powerwall rating to have already factored in battery efficiency so there should be no need to re-adjust numbers for 92% battery efficiency ?

          Using the grid in excess of the powerwall capacity doesn't change the savings or payback time though. It's about how much power each unit can offset.

          But yep - under-utilisation will, and we assume the unit is fully drained and charged each day.

          Generally round trip efficiency is not factored into the capacity for batteries - it's simply the cell capacity. But I don't have hard info either way.

          The other factor is battery degradation. It is likely that the 10 year time frame is until 80% capacity. But it is likely that the 7kW figure is average usable capacity over the 10 year warranty time.

          Technically after 10 years then it should be included, and will make the payback time slightly longer. But without hard figures on the actual degradation rates it can't be calculated.

          The biggest part of the whole equation subject to change is the installed price. But rest assured that as soon as we have an actual Australian installed price the numbers will be re-visited!

    The other thing to remember about the PowerWall is that it has an output of 2kWh. (check the specs on the Tesla site.)

    That's not enough to run a typical Australian household. With only 1 PowerWall installed, if you want to boil the kettle, you'll likely not be able to do anything else - you definitely won't be running the kettle and the microwave at the same time.

    TV + Amplifier + Playstation + Lights + Heating/Air-conditioning? Better check the draw of those items.

    A typical Australia household will likely need 2 PowerWalls (for 4kWh output) to allow the house to operate "normally".

      The output is 2kW (not kWh), but there's no reason you couldn't draw on the grid temporarily as well, for peak usage like boiling the kettle.

      If you're off the grid and are relying on these as your sole power source when the sun isn't shining, then you'd almost certainly want at least 2 units anyway, as you'd run through 10kWh pretty easily on a cloudy day or two.

      kWh is a measure of capacity (energy) not rate (power), do you mean: 2 kW max power supply. ?

    Good grief! Imagine if everyone in the developed world thought that this was a good idea. There wouldn't be enough raw materials in the solar system (excuse the pun) to supply even a small percentage. Everyone owning their own electricity supply and storage system is a dumb idea. dumb. dumb. dumb. dumb. dumb. dumb. It's likely that one thorium reactor could supply the whole of Sydney or Melbourne. And it would be on 24/7. But, hey, nuclear bad, solar good! So, bye-bye rational thought! dumb. dumb. dumb. dumb. dumb. dumb.

      I agree, we should have nuclear power in Australia. Unfortunately there are no politicians with the balls to get nuclear up and running so in the meantime I'll add batteries to my existing solar panel system, not for cost savings but to ensure even and consistent power supply.

    Not sure why you think there's a shortage of raw materials (with hundreds of billions of tonnes of lithium on this planet), or why distributed power generation is a bad idea either (there's a lot of advantages in redundancy and efficiency, and even more in developing countries that lack any power distribution infrastructure).

    As I have 5kw of solar split across 2 strings, 2 x 7kWh Powerwalls would be a perfect fit for me. That is when my current Feed in tariff finishes up...

    Last edited 02/06/15 4:56 pm

    The problem in Australia is that the entire energy sector is not geared to renewables nor does it want to be. Power acquisition has been a debacle in this country because of the introduction of renewables is an after thought, not a strategic goal. Coal power stations are an endangered species. The distribution network will be the winner in all this...

    Re-gearing the energy sector to harness power from other sources is needed first before the Tesla powerwall will be viable in Australia for domestic users.

    I have 5kw of solar and a demand profile averaging over 20kwh s per day and access to cheap overnight charging. Repositpower are offering to sell my excess power at peak times for up to $16 per kWh the regulated maximum in the wholesale market potentially making a 1000$ per year. I will cycle the battery all day long depending on insolation. Can the author calculate my roi and payback period ??

      Wow, I'm surprised the author can't answer my question. Maybe you need a knowledge of solar and batteries in the real world before you write an article like this.

        Very well said Glen. I done some on my own figures and even if i take all the figures provided here i still come up with 17 years payback which is far less then the 31 years he claims.
        Also i like to know where the 30K come from and how big the system is.
        I'm with you Glen if you don't what you talking about then don't write articles like this and confuse people.
        On a side note you are using money you paying anyway on your power bill.

          The $30k number is explained in the article.

          Two powerwalls (at $10k each) and a large solar array that can fully charge them.

      It's easy to miss a comment here and there ;)But 3 months late is better than never?

      So - (up to) $16 a kWh? Can you confirm that, as that would be 64x what I pay for power.

      And what do you mean by cycle the battery all day long?

      Although the wholesale market can go to $16 per kwh, its average in 2014-15 was less than 4 cents per kwh (NSW region), and there were very few price spikes into which you could discharge your battery and make money this way. Bear in mind also that most price spikes last for less than 30 minutes (until other generation sources can respond), and in that 30 minutes your battery will only discharge 1kwh at the high price.

    The numbers should not matter. What matters here is that we have a product, that if implemented globally, can convert all our energy used into renewable energy. We should be more focused on the positive impact this product can have on humanity rather than focusing on how much money we can be save if we buy it.

      Louie you're right the numbers shouldn't matter, but with solar the tipping point didn't come til it got cheap and economic, it will be the same with batteries. Just hoping and wishing won't make this happen, that's fairy land.

    Yup. Thorium is plainly obvious, but it's apparent links to 'nuclear' will render it politically wrong. It'd take a monumental education program to get the great unwashed on board.

    If only, hey?

    One quick question for you Lindsay. Have you got solar in your home?

      No solar.

      Thinking about it, with the right house power draw, solar and off peak charging, it might be possible to get two cycles from a powerwall each day.

      I am not sure if that would be covered under the warranty, but it would improve the payback time dramatically.

    I took a slightly different approach to calculating payback. I log generation, export and import daily. I looked at what my 5kW system was exporting each day, then reduced my import by the same amount (at 100% efficiency - not 90%. Also I am on a low feed-in tarrif.) At a $10k installed, payback is closer to 13 years based on my winter consumption. Summer is closer to 15 years. Doesn't stack up yet.

    To date only prototype Thorium reactors are in operation.
    I was pro-nuclear all my life, until the Fukushima accident. Now I seriously question if they are worth the risk. Especially if you consider the possibility of possible future deliberate terrorist or war based destruction.

    On the Tesla Powerwall, Positronic Solar has had Lithium based batteries available for sale in Australia for years.

    From: http://reneweconomy.com.au/2015/lg-chem-pushes-australian-battery-storage-prices-further-down-the-curve-40369
    "Newer players include: LG Chem launching a new 6.4kWh battery storage system that approaches the key $1,000/kWh mark in additional to AU Optronics, promoted by AGL Energy, and rival offerings from Samsung, Enphase, Panasonic and SMA.

    LG’s Chem Residential Energy Storage Unit (RESU) 6.4kWhr battery is similar in size, shape and capacity, to the Tesla offering, and is expected to last 15 to 20 years, or at least 6,000 cycles. It is being offered in Australia at $A6,898. The first supplies have arrived in Australia via wholesalers Solar Juice."

    Interesting times though...

    Can I ask why everyone goes on about payback times. I don't do that when I purchase any other household appliances like air con. If you look at the Powerwall in the way that you look at air con I want it because it benefits me to be cooler then the fact hat it pays for itself after a number of years is a bonus you cant say that for air con.

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