Tesla slashes price of the Powerpack system by another 10% with new generation

When we reported on Tesla reducing the price of its Powerpack system and introducing its cheaper in-house inverter in September, we speculated that it could be due to the release of the new second generation Powerpack 2.

Tesla has since confirmed that it started delivering the Powerpack 2 in September, but now it is reducing the price of the large-scale energy storage system again.

When it comes to energy storage, every percentage point counts. Bringing the price down even only by one percent can open up the technology to a new market and expand the use of renewable energies.

In September, Tesla reduced the price by roughly 5%.

Tesla updated its online Powerpack system configurator again over the weekend and this time, it slashed the price by roughly 10%.

The company changed its system and it is not breaking down the pricing per components anymore, but one can figure out an approximate price per kWh by playing with the capacity of the systems. It comes out to about $398 per kwh – down from $445 in September and $470/kWh before that.

Tesla is still limiting the size of the systems and it’s likely that the price per kWh would come down a lot with bigger installations.

They started delivering several very large projects lately, like the 80 MWh Southern California Edison’s Mira Loma substation and the 52 MWh Kauai Island Utility Cooperative, but even recently announced medium size projects are too big for the new configurator, like the 2.3MWh system at a substation in Glen Innes, New Zealand, or the 3 MWh Powerpack system for an off-grid solar and energy storage installation at Singita, a luxury safari lodge in the Kruger National Park in South Africa.

It indicates that Tesla still prefers to deal directly with developers for larger projects.

As we reported during Tesla’s last price reduction, the company also got rid of the Dynapower inverter for its commercial and utility-scale project in favor of its own inverter developed in-house:

As mentioned, Tesla is not breaking down the pricing per components anymore, but the inverter was being quoted at $52,500 in September.

Tesla says that the new Powerpack 2 combined with its own inverter brings down the price to “price points and with functionality previously unknown”:

“The Tesla inverter paired with the Powerpack 2 allows storage to be available to the utility industry at price points and with functionality previously unknown. The combined system is now a cost-competitive alternative to other traditional utility infrastructure solutions such as building larger substations, bigger wires and more power plants.”

Tesla and SolarCity are currently in talks for ‘a number of large’ utility scale energy storage installations. Tesla CEO Elon Musk said that the complicated validation process between the two companies to bid on the projects was slowing them down.

The projects are likely to pick up after the SolarCity merger if it goes through following the vote later this week – the two companies will hold their special meetings of stockholders on November 17.