Just before Tesla Motors' (NASDAQ: TSLA) event on Friday evening, where the electric car and energy storage company plans to unveil a new version of its residential energy storage product alongside a solar roof made in conjunction with SolarCity, Tesla is announcing an update to its energy storage solution for commercial customers.
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Powerpack. Image source: Tesla Motors.
"This September we began shipping version 2 of our Powerpack system," Tesla said in a Thursday evening blog post.
The updated Powerpack system includes a new energy module and power electronics, as well as twice the energy density of its predecessor, or 200 kilowatt-hours. In addition, the new Powerpack also sports a new, in-house designed and manufactured inverter, which Tesla says is "the lowest cost, highest efficiency and highest power density utility-scale inverter on the market."
Tesla explained the Powerpack 2 system's unprecedented value proposition:
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The Tesla inverter paired with the Powerpack 2 allows storage to be available to the utility industry at price points and with functionality previously unknown. The combined system is now a cost-competitive alternative to other traditional utility infrastructure solutions such as building larger substations, bigger wires and more power plants. Furthermore, the Powerpack system interface and software controls give utilities and grid operators high fidelity control, allowing for better energy management and dispatch, which improves grid performance, efficiency and reliability at a low cost.
Tesla noted the Powerpack 2 and the company's next-generation inverter are already being built for its two recently announced large, utility-scale systems for Southern California Edison's Mira Loma substation and the Kauai Island Utility Cooperative. These systems, which will be the two largest lithium-ion battery storage installations in the world, will be deployed later this year.
Tesla's Powerpack was first unveiled last May alongside the company's Powerwall, or its energy storage system for residential customers. The first-generation Powerpack was a 100 kWh energy storage tower available in 500 kWh capacity groupings (Tesla has since made Powerpacks available in 200 kWh groupings), aimed at serving the needs of commercial customers demanding more than 90 kWh of capacity for weekly cycles or 63 kWh of capacity for daily cycles.
Tesla has now deployed 300 megawatt-hours of energy storage worldwide, highlighting the nascent business segment's growth since its launch last year.
To meet growing demand for energy storage, particularly as the company updates the Powerpack and Powerwall, Tesla has been transitioning energy storage production to its Gigafactory. In Tesla's Oct. 26 released quarterly shareholder letter, the company noted its Gigafactory is on track to begin producing battery cells for its energy products "later this year."
Indeed, Tesla noted in its Thursday blog post its systems for the Southern California Edison's Mira Loma substation and the Kauai Island Utility Cooperative are currently being built at the Gigafactory. However, the post didn't specify whether this production only represents pack production or includes the manufacturing of the cells themselves, too.
Elon Musk unveils Powerwall. Image source: Tesla Motors.
With Powerpack 2 announced, and ahead of its Powerwall unveiling on Friday night, Tesla is confident in its energy storage business.
But this is "just the beginning," Tesla said on Thursday. "... [W]e anticipate the impact and growth rate of energy products around the world to be far greater than that of electric vehicles alone."
Investors will likely get more information on Tesla's plans for energy storage tonight at 5:30 PM Pacific time, PDT, when Tesla plans to unveil a second-generation Powerwall and a solar roof developed with SolarCity.
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Daniel Sparks owns shares of SolarCity and Tesla Motors. The Motley Fool owns shares of and recommends SolarCity and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.