The automaker known for its electric cars, Tesla (TSLA, Financial), has been diversifying its line of business lately when it announced early this year the launch of the battery products such as Powerwall used for residential purposes of energy storage. In fact, soon after the launch in April this year, the company was able to lure several customers and within the debut week it received 3,800 pre-orders for the battery storage units for home, commercial and utility-scale usage. It is notable that several retail firms such as Target (TGT, Financial), Walmart (WMT, Financial) and Amazon (AMZN, Financial) are currently showing interest in Tesla’s battery packs. According to Bloomberg, the Powerwall batteries had powered 11 Walmart stores in California during the pilot project before the formal launch. Last Thursday it was disclosed that Tesla would be partnering with Atlanta-based power utility company to test its commercial scale battery storage units. Let’s quickly catch up with the facts shared on the agreement between these two companies.
The plan of action
The newly formed energy division of Tesla has been entering into partnerships since the launch of the Powerwall as it intends to take its multi-utility battery products to the international markets. Last month, it has entered into a pact with Massachusetts-based energy software company EnerNoc and Germany based LichtBlick to explore the international markets for Tesla’s new battery products. Thinking on similar lines, on May 28 it was publicly declared that Tesla was partnering with power utility company based in Atlanta, Southern Company (SO, Financial), for testing of its commercial battery products.
During the shareholder’s meeting last Thursday, Southern’s CEO Thomas Fanning, stated that this agreement would aid in “examination of potential applications for the energy storage technology in helping meet customers' energy needs…” The agreement was welcome by Ireland based renewable energy group, Gaelectric, that commented that this alliance would work towards developing a pipeline of multiple battery projects meant to build new transmission system services that would be required to “facilitate the integration of renewable energy sources such as solar and wind…”
The power utility company, Southern Co., expects to develop innovative solutions through this partnership to meet the consumer’s evolving energy needs. Through this agreement, both companies would collaborate to explore options for usage of Tesla’s large scale battery packs for meeting the consumers’ electricity demand, while also reducing the level of dependence on greenhouse gas emissions.
In fact, Tesla’s CEO Elon Musk is on his mission of making energy storage cheaper and efficient and it is possible that, if the company tastes success during this testing phase, consumers might just go off the grid and opt for alternative energy sources such as solar energy powering Tesla’s batteries.
Parting word
With customers already flocking to buy the Tesla battery products in the U.S., it remains to be seen whether this partnership flickers some more rhythm in the buying spree for such newly manufactured batteries. Also only time will foretell the success of such energy storage batteries when used on a commercial scale and whether Tesla is victorious in marketing its energy products under the new division, Tesla Energy. Until then, let’s stay tuned.
