Musk Says Tesla Energy Will Help World’s Poor Leapfrog the Grid

Bloombery, 1 May 2015,  Dana Hull  and Mark Chediak

Elon Musk said the new suite of batteries being offered by Tesla Motors Inc. can revolutionize electricity for the world’s poorest citizens the way mobile technology disrupted the telecommunications industry.

Coupled with solar panels or wind turbines, powerful lithium-ion batteries can store energy and provide electricity for people facing what’s called “energy poverty.”

“In a lot of places there are no utility lines,” Musk, Tesla’s chief executive officer, saidThursday night at the introduction of its Tesla Energy products. “This allows you to go completely off grid. It’s analogous to the way that mobile leapfrogged landlines.”

About 1.3 billion people worldwide don’t have access to electricity, according to the International Energy Agency. Almost 97 percent of those people live in sub-Saharan Africa and developing Asia, according to the agency. Those regions could be good locations for so-called microgrids — self-contained systems of solar panels and batteries.

“It’s a huge and promising opportunity,” said Peter Asmus, an analyst with Navigant Consulting Inc. If declining prices of solar panels and batteries continue as expected, “that’s the game changer,” he said in a telephone interview.

By 2020, solar-powered electricity won’t be more expensive than power supplied from the grid, according to Asmus. The market for microgrids is expected to grow from $4.3 billion worldwide in 2013 to almost $20 billion in 2020, according to Navigant.

Diesel Replacement

Asmus said solar and battery systems can be used to replace dirty and expensive diesel generation commonly used in developing countries.

Among the companies already involved in such efforts, SunEdison Inc., a solar-panel maker, is seeking to develop 5,000 solar and battery systems in rural India. The company said in March it is buying 1,000 batteries from closely held Imergy Power Systems Inc. to build the microgrids.

SolarCity Corp., where Musk serves as chairman, said yesterday it will use Tesla batteries to develop its own energy grids with solar panels for remote and island communities, hospitals and military bases.

Tesla’s unit for a typical U.S. home would cost about $3,000 — almost double the $1,686 per-capita gross national income of Sub-Saharan Africa, according to the World Bank. Whether a poor community would use smaller home batteries or a shared system isn’t yet clear. In some cases, people might pay for electricity using their mobile phones.

“The challenge is how do you get people to pay,” Asmus said