The Tesla Powerwall 2: How it Works

Solar Panels With Battery Backup
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Go Solar Group is a Certified Tesla Powerwall Installation partner

Although known for electric vehicles, the Tesla solar product line has gained significant traction. Many people have particular excitement over the company’s solar shingles and home battery.

Although solar shingles have struggled to take off, the Tesla home battery, the Powerwall, has become the best solar storage battery on the market. The Powerwall illustrates Tesla’s passion for progression as a forward-thinking company.

Basic Tesla Powerwall 2 Features and Specs

As a leader in battery backup technology, Tesla has updated its original design. The new model can store twice as much power, has a built-in inverter, connects seamlessly with the Tesla app, has updated liquid-cooling technology and can mount on the floor or the wall.

The following Powerwall 2 specs make it an optimal energy conservation method for homeowners. Tesla Powerwall 2 + Gateway Entails:

  • 5 kW Max Continuous Charge/Discharge
  • 13.5 kWh capacity
  • 7kW Max Peak for 10 seconds
  • Dimensions: 45.3in x 29.6 in x 5.75in
  • 30 amperes or less with 1 Powerwall
  • 2+ typically needed for whole-home backup.
  • Gateway = Brain of the Powerwall system
  • 10-year limited warranty.
  • Weight: 276 lbs.
  • Mounting Types: Floor and wall mount
  • AC Voltage (Nominal): 120/240 V
  • Internal Battery DC Voltage: 50 V
  • Grid Frequency: 60 Hz
  • Total Energy: 14 kWh
  • Usable Energy: 13.5 kWh
  • Max Continuous Power: 5 kWh
  • Peak Power: 7 kWh
  • Round-Trip Efficiency: 90%

How the Tesla Powerwall Works

While lots of energy storage options exist, home batteries typically use one of two battery technologies. These include lithium-ion and lead-acid.

Lead-acid batteries typically cost less. However, they also have a lower depth of discharge, a shorter lifespan, and weigh more than lithium-ion batteries. So, although the lead-acid battery doesn’t cost as much up-front, in the long run, it costs more, which contributed to Tesla’s decision to use lithium-ion technology when creating their home battery.

How Many Powerwalls Needed to Power a Home

How many Powerwalls a home needs depends on how much energy the house typically uses. It’s also dependent on whether the homeowner wants to power essential loads during an outage or the whole home.

Powering Essential Loads

If the customer determines they only want to power a couple of items in an outage, one Powerwall will do the trick. The homeowner’s combined essential power needs should equal less than the continuous power supply rating of the battery. If your needs aren’t greater than the battery can handle, it will allow the battery to charge all the appliances you want running simultaneously.

Power for the Whole Home

Whole-home power refers to the number of batteries needed to keep a home running normally during an outage. The home battery needs of a house for a couple of hours won’t cover the home’s continuous power needs. Battery needs for both whole-home and continuous power depend on the energy usage of the house.

Mounting Styles for the Powerwall 2

The Powerwall 2 can mount either side-by-side or front-to-back. The number of Powerwalls and the mounting area determines the best mounting method.

Side-by-side mounts install each Powerwall along a wall. For this mount to work, the Powerwall needs room for ventilation and on each side for electrical connections.

Front-to-back mounts attach to the floor and a wall. Each stack can hold up to three Powerwalls.

The Tesla Mobile App

Once installed, the customer can use the Tesla mobile app to monitor their Powerwall. This app keeps track of the Powerwall’s use and allows owners to control it.

Federal Incentives for Battery Backup

If a customer purchases a Powerwall 2 with their solar array, they can qualify for the Federal Investment Tax Credit. Businesses purchasing solar and battery backup can also qualify for the Modified Accelerated Cost Recovery System (MACRS).

These incentives cover a chunk of the cost. Customers will want to remember it when they file their taxes the following year.

While available for all energy storage systems, these incentives have a couple of stipulations.

Qualifying for the Solar ITC

To qualify for the ITC, customers need battery backup and solar, or another qualifying renewable energy source, on-site. The combination of battery backup with solar passes the battery as part of a renewable energy option. Since batteries can store electricity no matter how it’s generated, batteries don’t qualify as a renewable energy option on their own.

Customers also have to own their solar arrays and battery backup solutions to qualify for the ITC. This requirement is one reason why it’s better to own a solar array than lease one.

Photo Credit: NREL

Determining the Powerwall’s Tax Credit

How much charge the renewable source provides determines the incentive amount for the battery. To qualify for the tax credit, at least 75 percent of the battery needs to charge with a renewable source.

The battery will receive the same percentage of the ITC that it uses from renewable energy. For example, a home battery that pulls 75 percent of its charge from renewables will get 75 percent of the tax credit.

Battery Backup and MACRS

Only a private entity can qualify for the MACRS. Tax-paying businesses include one qualifying example.

Powerwall owners can have the MACRS regardless of whether they have solar. Those who only have battery backup can accept a 7-year MACRS, which equals 20 percent of the battery. Those who also qualify for the ITC can get a 5-year MACRS, equaling 21 percent of the battery costs.

The Downside of Waiting for Battery Backup

If an individual can qualify for solar, it’s in their best interest to install solar and battery backup sooner rather than later. The ITC phase-down is one reason why it’s better to purchase sooner.

In December 2020, the 27 percent ITC extended to 2022, but in 2023 it will decrease again to 22 percent. This phase-down could mean thousands of dollars of savings lost by not taking advantage of the opportunity sooner.

Cost Savings of the Tesla Powerwall

Consumers care about the cost, especially for large purchases such as a home battery. However, it’s also important to consider the price savings.

How the Powerwall Pays for Itself

Even with incentives, a Powerwall will require some investment. When homeowners purchase a Powerwall, they invest in solar storage and the freedom and future savings it will offer.

A solar power system can generate electricity all day. However, as soon as the sun goes down, it can no longer produce power. Often people make up for this by staying connected to the grid.

Unfortunately, those who stay connected to the grid without battery backup have net metering programs that don’t always benefit the customer. Utilities often pay less for customer solar generation than what they charge for power pulled from the grid.

When you install a Powerwall, excess power is stored for later use, meaning you don’t have to worry about losing money to the utility. In fact, over time, you will recoup the money you spent on the home battery through savings on electric bills.


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