Tesla Powerwall: This Is the Real Cost of Going Off-Grid

The high-powered Tesla Powerwall battery is benefiting from the brand’s widespread automotive recognition and a boom in residential solar adoption. This surge has been further fueled by incentives, including a federal tax credit that lets you claim 30% of your storage system’s total cost on your tax return.

But even with the many credits, rebates and other incentives, batteries are often the most expensive single component of a residential solar system.

Fortunately, the Powerwall 3 is considerably cheaper than other batteries on the market. In fact, the Powerwall 3 is the cheapest its ever been, costing about $1,000 per kilowatt-hour of energy storage, according to a report from EnergySage. Since the Tesla Powerwall 3 is a 13.5-kWh battery, you’re looking at about $13,500.

In this quick guide, we’ll take a closer look at the Tesla Powerwall 3 to help you decide if it’s a worthwhile purchase. 

“The thing about batteries is they have a 10- to 15-year lifespan, and a lot of the time homeowners finance for 25 years,” Garrett Mendelsohn, founder of Solar Bootcamp, told CNET. “So you’re financing a product that’s not going to really be doing anything by the end of the 25 years and paying interest on it.”

Let’s dig into the details to help evaluate what makes sense for you.

What is the Tesla Powerwall?

Put simply, the Tesla Powerwall is a big battery that can be mounted inside or outside of your home. It can be hooked up to charge an electric vehicle in your garage, provide backup power, store excess solar energy from a connected solar array or all of the above. You can also connect multiple Powerwalls together for more capacity to do all these things at once. 

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A Tesla Powerwall solar battery, like any other solar energy storage system, can keep your essential systems online during grid outages, help maximize your net metering savings or even be your primary source of power if you have an off-grid setup. 

The Powerwall 3 is the latest model, offering a major upgrade over previous versions. However, it’s not compatible with older Powerwall systems.

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Those are the basics. Here are some of the more technical details:

How much does a Tesla Powerwall cost?

By home battery standards, Powerwall batteries are on the cheaper side. Tesla’s Powerwall 3 costs about $1,000 per kWh of storage. according to a recent report from EnergySage. The Powerwall 3 is a 13.5 kWh battey, so that’s about $13,500. But this doesn’t include the cost to install the battery. We were quoted $16,551 for the cost of installing a Powerwall 3 on a home in Fort Mill, South Carolina, via Tesla’s website. This price includes the battery, gateway device, accessories, installation and taxes — not too bad.

Older Powerwall models are a bit cheaper, in the $8,400 – $13,000 range. However, we suspect these are slowly being phased out by Tesla.

Other factors can impact the total cost of installing a Powerwall, such as labor and material expenses for placing it in a safe and convenient location. On the other side of the ledger, the federal tax credit, other incentives from state and local governments, utilities and even Tesla itself can drive down the net price. 

Tesla offers an energy design tool to help drive sales, but it’s also useful to get a sense of how much you might expect to spend on a solar system for your home that includes a Tesla Powerwall battery. Depending on your home’s energy needs, you might need multiple Powerwalls if you’re looking to create a whole-home backup.

And remember — don’t make any major decisions based solely on online research. Talk to multiple installers in your area to get more than one quote specific to your situation.

Pros and cons of the Tesla Powerwall

Pros:

• Unlimited cycle warranty 
• High power output 
• Well-rounded efficiency and performance 
• Cheaper than other batteries of similar size
• Compatible with and without solar panels

Cons: 

• Limited modularity
• Glitchy energy management app
• Poor customer service reputation
• Not compatible with other Powerwall models

Is the Tesla Powerwall worth it?

If you’re set on storing a significant amount of energy for your home, the Powerwall is a solid choice. It has a great warranty, strong performance, an extremely competitive price and the backing of a well-known brand. But some have reported the company’s customer service to be lacking. Tesla no longer operates a media office and didn’t provide comment for this story. 

For those with existing Powerwall 2 or Powerwall Plus models, you should know that you can’t install the Powerwall 3 within your existing system. That, of course, can be a dealbreaker. However, it’s clear Tesla wants you to switch to the Powerwall 3 and leave the older, less powerful models behind. Since one of these is much more powerful than previous models, it could be a savvy upgrade.

If you’re on the fence about getting a large battery, Mendelsohn advises it might be better to wait. Most components of a home solar system are warrantied for 25 years, but batteries are rarely guaranteed to last longer than a decade, he points out.

“If you don’t have blackouts, it’s not really worth it for the price. You spend $13,000 to $15,000 … for a battery that can’t even do the full house” Mendelsohn says. “So it doesn’t really make a lot of sense until the battery technology gets better, and they can be warrantied for 25 years.”

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