Is a Tesla Powerwall Worth Buying Just To Avoid Paying Peak Electricity Rates?

Tesla recently announced a home battery system called Powerwall.       One of the selling points they made was :

"Avoid Paying Peak Rates Power companies often charge a higher price for electricity during peak evening hours than overnight when demand is low. Powerwall can reduce your power bill by storing electricity when rates are low and powering your home when rates are high"

That intgrigued me.     If you're not familiar with the idea of peak rates, this is how it works.   Electric companies may have a rate system setup that charges you a higher cost during peak rates and a lower cost during off peak rates.   They may do this to try and shift usage off peak and even out their loads better.   For example a utility might have a normal base rate of 10¢ per kWh but if you have the peak rate system then they charge you 15¢ during peak and 5¢ in off peak.      If you had a battery you could charge the battery at night for 5¢ and then use the power during the day and basically save yourself 5¢ per kWh versus the normal rates.


Would a Tesla Powerwall pay for itself simply by shifting your electricity usage to off peak times? 

The Powerwall comes in 2 models a 10kWH unit and a 7.7 kWh model.    The 10kWh version is for weekly cycle and apparently more for emergency backup.   The 7.7kWh model has a daily cycle.    They run $3000 for the daily 7.7 and $3500 for the weekly 10.    We'd be looking at he 7.7kWh model for daily use at $3000.    These costs do not include an inverter or installation.   I'll ignore those costs for now and get back to that later.

The 7.7 kWh daily cycle Powerwall costs $3000.    It has a 10 year warranty.   They also mention a 10 year extension.   If I used 7.7 kWh every day for 10 years then that would be a total of 28,105 kWh.      With a $3000 cost that comes to about 10.7¢ per kWh based on a 10 year life.   Lets assume a 20 year life to be generous for the battery.   That gets us down to 5.3¢ per kWh cost for the battery alone. 

If your off peak energy costs more than 5¢ kWh more than on peak then this is getting close to feasible.    However you'd also have the costs of the installation and possibly a AC-DC inverter too.    I don't know what those cost.     I believe that home PV solar systems will have a AC-DC inverter in them but I"m not sure if that is what you need for the Power wall exactly.    I'd take a wild guess that installation will run you $500-$1000.   But thats really just a wild guess.

I'm going to conclude that a Powerwall isn't financially practical for most people just to avoid paying off peak power rates.      I suppose if you have particularly high difference between peak and off peak rates it might make sense but from what I see a max 5¢ difference between normal charges and off peak seems typical.   But my numbers still assume a 20 year life for the battery and I haven't calculated in the installation costs.    You might need to see more like 10-15¢ per kWh between peak and normal to make these practical just to save off peak electricity charges.

Bottom Line : NO I really don't think that a Powerwall is worth it financially just to take advantage of low off peak electricity rates.

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