Storage is at once the technology laggard and the key to the future for decentralized power. Tesla is translating its experience with small scale storage in its cars into larger lithium ion batteries for household and business use.
So as UBS is downgrading dinosaurs like FirstEnergy, here is what Morgan Stanley is saying about Tesla’s business prospects:
But aside from cars, the most plausible use case remains solar power storage, whereby a house could capture solar energy through a panel installed on its roof—perhaps even one made by Solar City, one of Musk’s other companies—and then store that energy in the basement using Tesla-made batteries.
Here’s an excerpt from Morgan Stanley’s latest note:
Given the relatively high cost of the power grid, we think that customers in parts of the US and Europe may seek to avoid utility grid fees by going “off-grid” through a combination of solar power and energy storage. We believe there is not sufficient appreciation of the magnitude of energy storage cost reduction that Tesla has already achieved, nor of the further cost reduction magnitude that Tesla might be able to achieve once the company has constructed its “Gigafactory,” targeted for completion later in the decade.
Morgan Stanley gets to the $2 billion number by forecasting that Tesla’s batteries could eventually store more than 10 gigawatt hours of energy per year.
No “bleak” here.