Zenyatta Ventures Ltd

Forget Cars: Tesla Wants to Power Your House

If there’s one thing we’ve learned in recent years in the tech sector, it’s to never, ever underestimate Elon Musk.

This is a guy who took Wall Street by storm. His car company, Tesla (TSLA), has been a market darling. In October of 2012, you could have bought a share of Tesla stock for about $28. That share will cost you over $200 today.

Tesla has a market cap of nearly $28 billion despite never having had a year with positive earnings. EPS for the trailing 12 months is ($2.36). For comparison purposes, Tesla’s market cap is only a little less than half that of General Motors, which had net income of $2.8 billion last year.

Such is the genius of Elon Musk that he’s convinced investors he has a product whose sales will grow, essentially, to the moon.

Thus when we came across a story headlined Why Tesla’s Battery for Your Home Should Terrify Utilities, we had to take a look.

Seems that during a mostly disappointing Tesla earnings call last week, Musk casually dropped the news that his company is working on a full-house battery that could help you break up with your expensive utility company and propel you into off-grid self-sufficiency. You can listen to the call if you’re curious.

Interest in solar power is nothing new for Elon. He chairs a company called SolarCity, which has been installing panels on people’s roofs since 2006, now has 168,000 customers, and controls 39% of the residential solar market.

With solar power the big bugaboo is energy storage—when the sun is shining, you aren’t always using electricity, and vice versa. So your solar power always had to come with a regular utility hookup or a giant room full of expensive and toxic lead acid batteries (99% of people opted for the former, of course). Now along comes Musk, claiming that he has a battery on the way that’ll solve that problem. The design should be available to see within the next month or two, and production could begin in as little as six months.

Musk says that within 5-10 years, every set of solar panels that SolarCity installs will come with a battery pack. That dovetails nicely with last fall’s announcement that Tesla will build a vast “gigafactory” for producing lithium-ion batteries in Nevada. Not everyone is convinced, let it be said.

How successful these efforts will be remains to be seen. But as noted at the outset, this is one tough cookie to bet against.