Tesla Is Betting on Solar, Not Just Batteries

Tesla’s Powerwall storage system is not a radical innovation, and it is not the first battery for energy storage. But, as Elon Musk understands, it is not always the best technology that wins the innovation race. Rather, it’s often the one that best fits with existing dominant technologies, so that the success of the two becomes interrelated.
And the Powerwall is the first battery on the market to provide a solution to solar energy storage that is simple to use, easy to install, relatively inexpensive to maintain, and more aesthetically appealing than existing home batteries and storage systems, such as small diesel generators. Powerwall therefore has all the characteristics needed to succeed in this market. At least as long as the technology it is tethering itself to, solar, succeeds as well.
The advantage of Powerwall will be greater for households and business customers who have already installed solar panels and perhaps own a Tesla electric vehicle. It would allow energy produced during the day to be stored for use in the evening and early morning (including for vehicle charging). This technical interdependence with solar is something that Elon Musk, the CEO of Tesla and chairperson of SolarCity, is trying to exploit by working in close collaboration with his cousin Lyndon Rive, CEO of SolarCity, the largest rooftop solar installer the US.
In this way, Tesla’s batteries could become associated with an established technology (solar power) so that the two technologies start spreading together, ultimately becoming a new technical standard adopted by the majority of households and businesses.
To support this strategy and to encourage adoption, both companies have planned not only to work together but to scale up their activities in order to control costs and make solar more affordable to their customers: Tesla has announced the opening of a $5b Nevada plant, jointly with Panasonic, and SolarCity has announced the same strategy for the large scale production of solar panels in Buffalo, New York state.
SolarCity’s effort, alongside the heavily subsidized production of rooftop solar from China, will help to make the energy source more affordable, meaning there will be more demand for storage solutions like the Powerwall.