We’ve covered a lot about the U.S. recent attempts to switch over to clean energy and update the grid to be ready for the upcoming increase in EV charging. Tesla is now taking that one step further by offering electricity to its Powerwall customers who charge EVs at home. The goal: to provide clean energy sourced from renewables to charge those clean EVs. This could also change the game on how residential solar customers feed energy back to utility providers, as Tesla is arranging for customers to feed electricity back into the grid at peak rates.
How Tesla can offer electricity via power wall units
It’s not like the company owns a utility grid. Tesla is launching Tesla Electric to become an electricity retailer through Powerwall owners, starting with markets in Texas where the company has moved its headquarters. It’s also where the grid reliability has notably struggled in the last few years due to climate-change induced severe weather the state is not prepared to handle.
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Tesla experimented first with virtual power plants (VPPs) in California. Through this program, Tesla responded to specific “events” that required grid backup power to provide extra power to local electric utilities. Now, Tesla is taking that one step further by actively and automatically buying and selling electricity for Powerwall owners to provide a buffer against peak electricity prices.
In other words, Tesla is taking the guesswork and management out of residential solar production, helping customers sell power back to utilities at optimal prices and recharging at optimal times. We can expect to see more innovations related to smart grid technology like this at scale as the utility companies upgrade the grid, but a more nimble player like Tesla can help with the transition, the process becoming healthy competition for the utility companies.
How you can participate in the Tesla Electric Program
Currently, the Tesla Electric program is by invite only to select customers in Texas, however the company does roll out charging infrastructure and experiment with new products fairly quickly. We anticipate if this program is successful in helping Tesla make a profit while supporting consumers in creating their own backup energy and making money off selling electricity back to utility companies that this program will expand soon.
The unpredictable variable in all this is that utility companies are known for reducing compensation for electricity from consumers, which has repeatedly frustrated efforts to get residential customers producing their own solar power. However, as solar panel costs come down and electricity prices rise as clean energy replaces gas and coal, this should balance out.
Tesla’s stated goal is to become a “global distributed clean electric utility.” Texas, whose utility grid is now famously unstable and lacking in updates required for handling climate change induced severe storms, was a great place to test this program before a broader rollout.
Keep an eye on the Tesla website for news releases about expansion of this program. If you have a Powerwall charging unit or solar roof from Tesla, you should be notified when the program is available in your area. Also keep an eye out for alternatives, such as your local utility company offering more clean energy sources for your utilities and solar panel installation incentives from your local municipality.
Tesla’s clean energy revolution
Tech companies are famous for disrupting entire sectors of industry, and Tesla is a prime example. If the company can pull out of its recent slump induced by CEO Elon Musk’s disastrous Twitter takeover and collapse, we expect them to continue to expand into all areas of clean energy. Thus, creating a circular economy in electrifying transportation, charging vehicles and homes using clean energy and offering smart grid technology to end consumers to manage their own power production with the help of automated technology.
If you think about it, electricity really shouldn’t be as complicated or expensive as it is. Tesla will be creating competition for utility companies, so you can expect a regulatory battle and pricing competition. Consumers who can provide their own electricity for most of their needs will be the winners, as they are the only players who can control their own electricity costs.
Tesla is asking for a rule change with the Electric Reliability Council of Texas (ERCOT), an organization that manages Texas’s electrical grid, that would allow residential solar power creators (customers who create their own solar power at home) to bid on extra capacity, putting customers in charge of electricity pricing. We don’t see ERCOT agreeing to that, so expect Tesla to find a way to skirt around it and put customers in the driver’s seat of their own power production instead of just pricing.
However, Tesla did recently receive ERCOT approval for a statewide market design pilot for small distributed energy sources to provide grid service exports. This indicates that ERCOT is aware they may need partnerships to solve Texas’s massive grid failure problems, at least in the short term until it can be properly shored up for handling emergencies and peak demand.
Images via Tesla