Tesla jumps into the solar storage-battery market to get homes, offices off the grid

Elon Musk was characteristically modest. "We are talking about trying to change the fundamental energy infrastructure of the world," he said Thursday, at the unveiling of Tesla Energy, an offshoot of his electric-car company that aims to revolutionize the market for batteries that store solar and other sources of energy at homes and offices. "You can be free of the grid."

Analysts consider storage batteries a big growth industry. Solar panels are getting more affordable, and "it is now cheaper to generate clean power on site than to buy from large centralized coal or nuclear plants located so far away," Peter Asmus, a research analyst at Navigant Research, tells the Los Angeles Times. "The shortcoming is the sun doesn't always shine and the wind doesn't always blow, hence the need for energy storage."

The first unit Tesla Energy will bring to market is the "Powerwall," a 6-inch-thick 10kWh lithium-ion battery that can hang on the wall of a house and provide enough power for about 10 hours. It's based on the same battery used in the Tesla Model S sedan, and while the batteries will first be made in California, the plan is to mass-manufacture them at an in-construction $5 billion "gigafactory" in Nevada.

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The first customers aren't going to be residential, probably — it makes more sense for solar homes to net-meter their power on the grid — but the batteries would make sense for businesses and utilities, and Walmart is already testing out some of Musk's batteries. "If Tesla and other companies can dramatically scale up energy storage production and lower costs, it could be a game changer for renewables," says Laura Wisland at the Union of Concerned Scientists. Modesty has its limitations.