RENEE MONTAGNE, HOST:
And here's an inconvenient truth - solar power only works during the daytime. People who use it need to store electricity, which means a lot of batteries. Last night, the electric carmaker Tesla offered to sell some. The company announced it will start selling enormous packs of batteries designed to power homes and businesses. Steve Henn, from our Planet Money podcasts, asks if anyone will be buying.
STEVE HENN, BYLINE: When JB Straubel was 14, he scraped together 1,500 bucks and bought an old Porsche 944 with a blown out engine. And then he converted it into an electric car. That electric Porsche had a top speed of 110 miles an hour - just not for very long.
JB STRAUBEL: It had, like, 20 miles of range. It was totally impractical.
HENN: Today, Straubel is the co-founder and chief technology officer at Tesla.
STRAUBEL: So that kind of, you know, cemented it for me that OK, the focus here needs to be on energy storage and batteries to make, you know, this technology something that's useful to the world.
HENN: Today, Tesla's cars have a range of more than 260 miles. And JB Straubel's convinced if his company can make batteries cheap enough, it will be able to sell millions of electric cars. But Straubel says that's not the only thing a cheap battery could do. He thinks cheap batteries could revolutionize the electric grid.
STRAUBEL: It's amazing the electric grid can work as well as it does with no storage.
HENN: I mean, think about it. There is no way to store electricity on the grid. If there's a surge in demand and you run a power company, you have to fire up an extra power plant.
STRAUBEL: You know, it's an entire market for energy transaction that has no inventory and no buffer. So every single thing is delivered, you know, instantaneously just in time.
HENN: And that means there's an enormous amount of waste. So Tesla wants to sell its batteries to consumers, businesses, homeowners - even utilities.
ROBERT BRYCE: But the question is for the homeowner, like me - and I have solar panels on the roof of my house - the question, of course, is going to be what's the value proposition?
HENN: Robert Bryce is the author of "Smaller Faster Lighter Denser Cheaper," and he is a battery skeptic.
What would it take for you to buy a battery pack and stick it in your garage?
BRYCE: Well, it would have to be cheap. I mean, that's the first thing.
HENN: Before last night's announcement, one analyst I spoke with expected Tesla's new home batteries would cost in the neighborhood of $20,000. The real price was much lower.
(SOUNDBITE OF ARCHIVED RECORDING)
ELON MUSK: The cost of this is $3,500.
(APPLAUSE)
HENN: That's Tesla's co-founder CEO Elon Musk.
(SOUNDBITE OF ARCHIVED RECORDING)
MUSK: You can actually go - if you want - completely off-grid. You can take your solar panels, charge the battery packs and that's all you use.
HENN: These batteries mount to your wall and don't take up much space. But still figuring out if it makes financial sense to slap a Tesla battery pack up in your garage isn't simple. You know, most people are not going to go off the grid. And even though it costs electric companies a lot more money to deliver power to you in the middle of a hot summer day than in the middle of a cool night, utilities don't charge for power that way - usually. In most places, there's no financial incentive to buy power when it's cheap and store it. There's no financial incentive to buy a battery. Last night, Elon Musk talked about how batteries could save the world and stop global warming. But before any of that can happen, consumers are going to need an economic reason to buy one. Steve Henn, NPR News. Transcript provided by NPR, Copyright NPR.