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Tesla Powerwall To Help Solar Energy Reach Price Parity With Grid Power In Japan

Tesla Powerwall To Help Solar Energy Reach Price Parity With Grid Power In Japan

Tesla Powerwalls are poised to help solar energy reach price parity with grid power in Japan. These findings were related by the Nikkei Asian Review in a recent report discussing the emergence of renewable energy solutions in the country. 

Despite costing a significant amount upfront, the Tesla Powerwall is actually more affordable compared to alternative Japanese products in terms of its storage capacity per kWh. Together with the costs of installing solar panels, Tesla's home battery system could end up making solar power very competitive in price with electricity coming from the grid. 

An official from the Ministry of Economy, Trade, and Industry related these findings to the business publication. However, some uncertainties still remain considering that Tesla is yet to formally start selling the Powerwall in Japan. "The only question is whether (Tesla) will actually sell the product," the official said. 

Tesla is reportedly planning on selling its Powerwall batteries for 990,000 yen (about $9,010) in Japan, which translates to about 73,000 yen per kWh. Competing home battery solutions in the country, which are typically smaller than the 13.5 kWh Powerwall, usually sell for about 200,000 to 300,000 yen. 


Credit: Tesla

Japan allows residents to sell unused renewable power back to the grid at fixed prices. The feed-in tariff system, which was rolled out following the Fukushima nuclear disaster back in 2011, was designed to encourage the adoption of residential solar panels. The idea was novel on paper, but it ignored market forces, resulting in consumers paying for their solar systems through higher energy bills. 

Residential battery storage devices are crucial to solving these issues. However, their high price has generally discouraged buyers, at least until now. Nikkei notes that the Tesla Powerwall is priced close to "storage parity," which meant that the cost of purchasing power from the grid is the same as the cost of generating electricity through a home's renewable energy system. 

A recent estimate from the Mitsubishi Research Institute noted that if the cost of electricity storage hits 60,000 yen per kWh, it will be cheaper for homeowners to power their houses using renewable energy. These estimates assume the use of the usual 5 kWh Japanese home batteries in the market, which offer less than half the capacity of the Tesla Powerwall. Isao Hasegawa, a senior researcher at MRI, stated that the electric car maker actually has an edge in a sense, since the company has economies of scale. "Tesla sells [batteries] directly, while Japanese makers use wholesalers," he said. 

Ultimately, a potentially widespread adoption of residential solar and home battery storage units may pave the way for the rollout of virtual power plants in the country, similar to the one Tesla is setting up in Australia. This could ultimately change the game for energy grids in the future. But first, price parity with the grid has to be achieved. Thankfully, at least for Japan, it appears that the Tesla Powerwall may be up for the task. 

Featured Image Credit: Tesla 

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Claribelle Deveza

Claribelle Deveza

Longtime writer and news/book editor. Writing about Tesla allows me to contribute something good to the world, while doing something I love.

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