Should you go off grid with a Powerwall 2?

A long time ago, back in the days before we knew how lame the original Powerwall was compared to its hype or how good the Powerwall 2’s hype is compared to the original Powerwall, I wrote about whether or not my parents in sub-tropical Queensland could save money by going off-grid using lead-acid battery storage.

My conclusion was they could not save money even under almost ideal circumstances.  The benefit of staying on-grid and receiving even a low feed-in tariff for surplus solar electricity was too great to make saying sayonara to the grid connection wire worthwhile.

But now Tesla says the Powerwall 2 will will be available in February and they have given its technical specifications, warranty, and price. This has allowed us to determine its warranted cost per kilowatt-hour is 30% less than its nearest competitor and half the price per-kWh of the Powerwall 1.

The dramatic price cut means that, in some very specific situations, adding a Powerwall 2 to a grid connect solar system, may pay for itself. Just.

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How many solar panels should you install with a Powerwall 2?

The Tesla Powerwall 2 is going to be big.  Really big.  I mean that literally and not figuratively.  It’s going to be big as in 13.5 kilowatt-hours of storage big.  From the point of view of most Australian households that is huge.

This large capacity presents households with two main problems:

  1.  It is more than the average Australian household uses at night.
  2. Those that do use that much electricity overnight may not have a rooftop solar system large enough to fully charge it.

So if the average Australian home buys a Powerwall 2 they will use it at less than its full capacity. As Tesla’s warranty is fixed at a maximum of 10 years, this increases the cost of each warranted kilowatt-hour substantially.

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Is The Powerwall 2 A Good Investment?

Tesla has announced the impending arrival of the Powerwall 2 at a promised price point that, on the surface, looks very compelling: $10,150 fully installed1, or  23c per warranted kWh.

It seems particularly impressive when you consider that in Sydney and Perth, time-of-use tariffs can go to 50c per kWh during peak periods.

That’s 23c for electricity from a battery vs. 50c for grid electricity. Surely that makes the Powerwall 2 a no-brainer investment for people on such a tariff?

I decided to look a little deeper into the economics of using Australia’s cheapest battery2, on Australia’s highest grid tariffs.  Unfortunately I found that high peak rates are not nearly as good for the economics of the Powerwall 2 as they seem.

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