Tesla is selling clean power to the island’s electric company
Islands in the Pacific Ocean are some of the most practical places to install solar panels. Since there’s no natural gas pipeline or rail line to haul in coal, islands like Kauai in Hawaii have traditionally generated electricity by shipping in many barrels of diesel fuel.
These days, because so many residences and businesses have installed solar power, there’s a greatly reduced need to burn fossil during the day — but at night, the generators kick in. Tesla wants to change all that, with a massive new solar farm and energy storage project on the island.
Much of renewable energy generation is intermittent: wind and solar power generation peaks are often around times of low demand. So Tesla (which changed its name from Tesla Motors last year largely because of projects like this) offers the Powerpack, a massive battery that can store electricity during the day when supply is abundant, and discharge it when demand goes up after the sun goes down.
The Kauai project consists of a 52 megawatt-hour battery installation plus a 13 megawatt SolarCity solar farm. Tesla and the Kauai Island Utility Cooperative, the power company that ordered the project, believe the project will reduce fossil fuel usage by 1.6 million gallons per year.
Like with the solar/battery microgrid installed on the island of Ta’u in American Samoa last year, the KIUC project uses Tesla’s Powerpack 2 battery system, built at Tesla’s Gigafactory in Nevada.
KIUC didn’t purchase the solar panels and battery system from Tesla outright. Instead, the utility contracted with Tesla to purchase electricity. There’s a 20-year contract in place to buy the solar-generated power for 13.9 cents per kilowatt hour — in effect, Tesla is now in the power generation business.
It’s the first major solar-plus-storage project for Tesla since its $2.6 billion acquisition of SolarCity last year, and Tesla said in a statement that it “will work with energy providers around the world seeking to overcome barriers in the way of building a sustainable, renewable energy grid of their own.”
Stationary storage is “something I think will probably be as big as the car business long term,” Tesla CEO Elon Musk said during a tour of the Gigafactory last year. “And will actually have a growth rate probably several times that of what the car business is per year. The growth in stationary storage is really under appreciated. That’s a super-exponential growth rate.”
Earlier this year, Tesla opened a massive energy storage facility in Ontario, California that was designed to reduce the need for “peaker plants,” or pricey electricity generators that only run when demand is particularly high. Use of Tesla’s Powerpacks both as replacements for peaker plants and to time-shift renewable power generation appears to be growing in popularity, and the company has a number of projects underway at the commercial, industrial, and utility levels.
Tesla also offers a residential power-storage solution called Powerwall that uses the same technology as Powerpack. In fact, a Powerpack is simply 16 Powerwall battery pods encased in a weatherproof box.