Homeowners in Massachusetts and Connecticut can now get a steep discount on a Tesla Powerwall — but only if they agree to let the backup battery help out the grid, too.
Under a new virtual power plant (VPP) program announced this week, the U.S. market leader in residential energy storage is offering certain households long-term, no-money-down leases for one or more Powerwalls. Massachusetts households would pay about $30 per month less per battery than they would with a standard Powerwall leasing arrangement, while Connecticut households would pay about $60 per month less.
Those discounts could halve the monthly payments of a standard lease, said Kevin Joyce, Tesla’s lead for virtual power plants and electricity retail. But to receive them, these homes must let Tesla control their Powerwall batteries and dispatch them to help the grid during 70 to 100 “events” per year.
That’s all invisible to homeowners, though, Joyce said. It’s up to Tesla to make sure its batteries retain enough power to back up homes and reduce utility bills — which is what the households are paying for — while also keeping some available for the company to profit from during these grid events.
Typically, the sale of rooftop solar and backup batteries precedes the pitch to sign up for a VPP, not the other way around, Joyce said. So what Tesla is doing in New England is a bit unusual, at least in U.S. markets outside Texas, in that it is using the expected long-term revenue from VPPs to subsidize a lower monthly cost for customers.
The approach could help increase adoption of home batteries, which remain appealing in principle but an expensive proposition for most households looking for backup power.
For years, rooftop solar and battery adopters “have benefited from these programs and enjoyed the value over their lifetimes,” Joyce said. “But we realized long ago that this was never going to make this technology as ubiquitous as it needs to be.”
Front-loading the VPP values into cheaper stuff
So why do Tesla and competitors think they can make money by leasing discounted batteries for VPPs? Let’s just say the answer varies, depending on what part of the country you’re in.
