Tesla Powerwall 2

The next purchase we are considering as a family is the Tesla Powerwall 2.  It appears the second generation Powerwall is a much better proposition than the first and the numbers are looking a lot better.

Tesla Powerwall 2

We are a five Bedroom household with an average power usage of 30kWh per day which equates to approximately $850 per quarter in electricity costs, or $3,400 per annum.  We currently have a 5Kw solar system installed on our roof (which we mostly use to charge our Electric Vehicles), and we are wanting a way to reduce our power bills.

Now, when considering whether to install the Powerwalls and the number of Tesla Powerwall units to install I have learnt that one of the most important factors to consider is not how much power you use but the size of your solar system you have on your roof.  Let me explain.

Using the calculator available on the Tesla Website – Tesla Powerwall Calculator you can play around with a number of variables, namely;

  1. The number of bedrooms in your household.  This estimates your daily kWh usage, 5 bedrooms is 30kWh in our case.
  2. The size of your existing Solar Panel System. In our case we have a 5 kW system.
  3. The number of Tesla Powerwalls you would like to install.

The really interesting part of these variables is how the size of your Solar System varies your estimated “Energy Independence” rating, or if you like the amount of saving you will achieve my installing one or multiple Powerwalls.

In our case the calculator will automatically recommend a 2 system Powerwall installation, and this equates to a 50% Energy Independence rating. Now, the installation cost of this is estimated to be $16,750, and if you take our annual electricity bill and calculate our return on investment, that is $3,400 * 50% = $1,700 saving and the ROI is therefore $1,700 (saving) / $16,750 (install cost) and a 10.15% ROI.

Although this appears to be a good investment, considering it is a guaranteed 10% return each year, I wanted to play around with the parameters a little bit further.  Now consider this.

If I change my settings and, obviously my daily electricity usage cannot change from 30kWh per day, and the size of my solar panels cannot change (unless I pay for more to be installed) the only parameter I can change is the number of Powerwalls to be installed. So lets take the number of Powerwall units from 2 units to 3 units, in this case because my solar system is limited to 5kW it appears it does not matter how much storage I have (i.e the increase in Powerwall units) the estimated energy independency rating stays at 50%.

So lets take the number of Powerwall units down to 1. This reduces my cost from $16,750 to an install cost of $8,750 but the interesting thing is that my estimated Energy Independence drops by just 1%, therefore I am maintaining a 49% Energy Independence rating.  Lets run the numbers on this;

$3,400 (Annual Electricty cost) * 49% (Energy Independence) = $1,666 saving and the ROI is therefore $1,666 / $8,750, therefore 19.04%, or if you want to think about it in terms of the number of years it will take to pay itself off, that is 5.25 years compared to 9.85 years if I install 2 Powerwalls.

So in summary, although the Tesla Calculator up-sells me and recommends a 2 Powerwall install, in actual fact, from a return on investment point of view, I am much better off installing just 1 Powerwall because I am limited by the size of my Solar Systems.

Overall a guaranteed 19% return on investment sounds like a good deal to me.

Of course each persons / state / countries electricity costs are different so you have to run your own numbers to see if this is a viable option for you, and also consider how your current electricity is being sourced i.e. Coal / Alternative and you may find you are happy to sacrifice a lower return for a greater long term benefit to the environment.

If you are interested in reading more about our family lifestyle experiments check out my review of our two electric vehicles;

  1. Holden (Chevy) Volt – My daily driver
  2. Outlander PHEV – My wife’s daily driver

Or interestingly enough I also estimate a 18% ROI from the purchase of the Dyson Bladeless Fan.

Happy Living investing everyone.