The Tesla Powerwall is a power storage system that has been engineered to deliver stored power to your home according to your energy needs. Given that Tesla, one of the battery technology engineering firms in the world, premier developed it, expectations for its ability to cut energy consumption and costs are high. But does the Tesla Powerwall stand up to the hype, or is it mostly a product to make you feel like you’re living the “green life”?
The Tesla Powerwall has a powerful feature that can help you save money on your electric bill: time-based control. If you are on a time-of-use plan with your electric service, you could leverage the Powerwall to deliver sizable savings in your energy costs.
In addition, the Powerwall can store energy from your solar panels (if you have them) to cut your electricity consumption from the grid by a substantial amount and reduce your overall environmental footprint. It can combine this feature with time-based controls to deliver power to your home in a way that optimizes your use of solar energy. Let’s talk about how you can use the Powerwall to accomplish this.
What is a Time-of-Use Plan?
Many electric utilities offer time-of-use rate plans for their customers. The way this type of plan works is that you pay a different price per kilowatt-hour for the electricity you use at different times of the day or on different days of the week. These plans distinguish between peak hours and off-peak hours for determining the different rates they would bill you for usage. Customers can take advantage of these plans by shifting their usage of electricity to off-peak hours when the electricity is less expensive and therefore will result in lowered bills.
Each utility provider will designate its peak and off-peak times. These are determined by the times when electricity demand is greatest. This is often occurring during the late afternoon to evening hours, such as 4 pm to 9 pm. To help reduce the demand during peak hours, time-of-use rates provide a pricing incentive for customers to adjust their electricity usage away from these times. If you are currently on a time-of-use plan or intend to switch to one, you can usually get the peak time schedule from your electrical utility’s website or by contacting them directly.
The critical thing to remember about time-of-use plans is that they exist to change consumer behavior around energy usage at various times of the day. They are structured to reward customers who use less energy during peak periods and use pricing incentives to drive those with greater energy consumption during these times to either shift usage or accept supplementing the cost of that energy at these higher rates. When used correctly, the Powerwall can help you avoid having to change your energy behavior at all.
How Powerwall Can Take Advantage of Your Time of Use Plan
If you happen to be on a time-of-use rate plan with your provider, you can configure your Powerwall to take the varying time-based rates into account to optimize your energy usage around off-peak times. Using this schedule, Powerwall can use its stored energy to power your home when the rate for electricity is high and draw power from the grid when the rates are lower.
One of the most valuable aspects of the Powerwall is that it can project future energy usage and production to change how it delivers and stores energy. It does this by first monitoring both electrical energy consumption and the production of energy through solar panels. It can then learn how to better optimize its charging and discharging schedule to fit the energy needs of your home in ways that can keep your costs as low as possible. This allows you to avoid having to make dramatic changes to how and when you use your home’s energy and still benefit.
Choosing a Mode for Your Powerwall
The Tesla app allows you to change your Powerwall’s mode of operation, and for this article, we will explore setting the mode to one of the time-based control options.
To change your settings, in your Tesla app, select Customize, and then Advanced Time-Based Control. There are two options for the time-based control operation of your Powerwall. Balanced is a feature that uses the power your solar panels have stored in the Powerwall to power your home when the rates for electricity are higher and when the solar panels are not active after sundown. This feature requires that you have solar panels installed and connected to your Powerwall, something a certified technician should do. This is a significant feature for maximizing the value you get from your solar panels and using it in the most efficient way available.
The other time-based option is Cost Saving. This option instructs the Powerwall to store energy while its cost is low and then consume that stored energy to power your home when it is expensive. This shifts when you are drawing energy from the grid to when the rate is lowest, and as mentioned earlier, the Powerwall learns how to optimize its storage and delivery of energy as time passes, leading to greater efficiency and savings in the long run.
Here are the steps for setting your Powerwall’s operating mode:
- Open your Tesla Mobile app on your smartphone or tablet.
- From the home view, select Customize.
- Select Advanced – Time-based control from the Customize menu.
- Choose either Balanced or Cost-Saving from the option displayed.
- (Optional) Set your Backup Reserve to the appropriate percentage using the + and – buttons. This percentage is how much you want Powerwall to set aside for a power outage.
- Select Edit Price Schedule and set the peak and off-peak hours according to your rate plan.
- Tap Done when finished.
After taking this initial step, you are ready to proceed to some of the more in-depth options for saving money with the Powerwall.
Set Your Backup Reserves to Prepare for a Power Outage
Your Powerwall really shines when your home experiences a power outage because it can deliver its stored energy to your home and keep it powered, hopefully, long enough that the power is restored before it has been exhausted. You can set the backup reserve that Powerwall keeps available for this contingency. This can be set in the same part of the app, where you set the mode under Customize. Select a percentage here that you want the Powerwall to keep as a reserve. For instance, if you set this to 25%, the Powerwall will keep a 25% reserve that it will only use in the event it detects a power outage, and 75% will be available for charging and discharging to supply power to your home in its normal cycle.
Selecting the right percentage is important since it represents the available energy for your home to draw from while the power is out. Of course, you will never know exactly how long an outage will last until it’s over. But you can draw from your prior experience around power outages in your area to get a sense of how often they occur and how long before they are resolved. If you are in an area beset with frequent outages and length outages, you probably want to set aside a larger percentage of your Powerwall storage for this contingency. But bear in mind that the percentage you set will not be available for the Powerwall to deliver during peak hours, which can affect its ability to offset consumption during high rate periods.
Setting Your Price Schedule
You should set your price schedule in your Tesla app to give Powerwall the times it needs to set its cycle. Selecting the Edit Price Schedule option will let you adjust the sliders to the start and stop times of your peak (yellow) hours and off-peak (blue) hours, as dictated by your rate plan. You can set a different schedule for weekends and weekdays using the week/weekend option. Be sure these match your rate schedule with your electrical utility, so you can leverage your rate plan properly. Powerwall will then use this schedule to learn about your energy usage and how to cycle itself to deliver power in the most cost-effective manner.
So far, we have covered many of the ways that the Powerwall alone can help you save money. These settings adjustments will help. But you’ll find your efforts to be far more fruitful when you combine other cost-saving tactics.
Combine the Powerwall with Solar Panels
Tesla has pointed out that the optimal use of a Powerwall is by combining it with a solar panel system. There are a few things to be aware of, however. One is that if your solar panels don’t produce enough power to fully charge the Powerwall on a day with mostly clear skies, you may not get the full value of the energy that it can deliver to your home to offset your electrical rates. Experts estimate that it requires 5 kilowatts of output from your solar panels to achieve this full charge.
The other factor in calculating the cost-benefits of a Powerwall paired with solar panels is that you would want to be normally using roughly 12 or more kilowatt-hours to take full advantage of the Powerwall’s capacity to meet your energy needs. If you’re using less than that, the cost of installing a Powerwall, potentially combined with that of the solar panels if you don’t already have them, may not save you enough to pay for the installation costs for quite some time.
One important thing to note is that Tesla offers a 10-year warranty on the Powerwall, which guarantees unlimited charge-discharge cycles if the unit is charged only through solar panels. The warranty shifts to either the first ten years or 37,800 kilowatt-hours stored if you charge the unit any other way. While these different conditions for the warranty may not ultimately result in a loss in the long-term, having your warranty limited would seem to be less desirable, so many Powerwall owners seek to avoid this by using solar only to charge the unit.
The Powerwall’s Other Modes
The Powerwall has some additional modes of operation that can save you money and provide useful features. Let’s take a closer look at some of those modes so that you can take full advantage of your Powerwall.
Self-Powered Mode
In Self-Powered mode, the Tesla Powerwall will work to store the power your solar panels generate throughout the day and then discharge overnight to power your home. The idea here is to optimize the power you’re using from your solar panels (Tesla has calculated the energy benefits of your solar panels are roughly doubled through this feature).
Backup Only Mode
We covered how you can set the backup reserve percentage for your Powerwall earlier. The Backup-Only mode is a feature you can enable that will cause your Powerwall to use 100% of its storage capacity for backup in the event of a power outage. Essentially, what this means is that the Powerwall will charge from your solar panel or the grid (if you don’t have solar), but it will only discharge if there is a loss of power to the home through the grid.
The advantage of using this mode is that you will have the full capacity of the Powerwall at your service if your power grid goes out. So while your neighbors are without power, perhaps for days, you can still use your Powerwall to keep your home powered, and if you have solar panels in your system, recharge it during the day for multi-day cycling. The downside is that you lose the cost-saving benefits of the Powerwall delivering power during high rate periods or overnight when you have power through the grid. On the plus side, it could be a cost-saver if you operate a business out of your home and can keep working through the outage.
Take Advantage of Incentives for Powerwall Owners
So far, we have talked about how you can save money by using less power from the grid which you pay for, and more power stored in your Powerwall, potentially from solar panels. If you have solar panels, you can tap into an additional cost-saving measure, known as Net Energy Metering. Net energy metering (or NEM for short) is a system of energy credits that you can earn by delivering electricity to your utility’s power grid from the excess power your solar energy system produces.
How Net Energy Metering works is that when your solar panels produce more electricity than your home needs, that extra energy is transferred to your utility’s power grid. In exchange for this electricity, your utility gives you credits. These credits are available to you to pay for the use of the power grid when your solar panels are not producing enough power, such as during the night. Net energy metering can be a great way to offset your energy costs, and in a lot of cases, homeowners can zero out their electrical bills.
There are some caveats, however. It’s important to note that the most dramatic benefits from net energy metering will be experienced by those with a sufficiently sized solar energy system. You also need to know that energy credits do not take the form of cash. Rather, your power company will apply those credits to your bill. You should also understand how credit carryovers work in your state. Some states allow you to carry over leftover credits from one year to the next, but in other states, they will expire at the end of the year.
Solar Subscriptions Are One Way to Add Solar
As you can see, while you can get benefits from just having a Powerwall in terms of cost-savings, the most dramatic savings occur when you pair your Powerwall with a solar system. Although the cost of solar panels has fallen over time, it remains a very expensive feature to add to your home. Fortunately, Tesla offers a solar subscription plan that allows you to install solar panels at no upfront cost to you. Tesla owns and maintains the solar system, and you can then power your home and charge your Powerwall using solar panels. Although your savings from energy consumption will be offset by your solar subscription costs, you should still come out well ahead.
Conclusion
In this article, we looked at a variety of ways you can save money using a Powerwall when combined with a time-of-use plan and how solar panels can play an additional role in saving energy costs. Hopefully, you will leave with a sense of how you can leverage the Powerwall to save you money in the long run. The Tesla Powerwall is a powerful tool for managing your home’s energy systems and adjusting electrical usage from the grid during high rate periods. And if you live in a state offering net energy metering, you can save even more. You can learn more about the Tesla Powerwall from their website and discover additional ways you can manage your energy consumption and costs.