First, Randy Ross bought a Chevrolet Volt. Faced with the need to charge his car and eager to cut his utility bill, he installed solar panels on the roof of his Pleasanton, Calif., home.
Now Ross, 61, has taken the next big step toward energy independence: his own battery storage system, which gives him a source of backup power and could ultimately let him tap solar electricity whenever he needs it, not just when the sun is shining.
Battery-based energy storage — for homes, businesses and the electric grid — is a hot new industry in Silicon Valley, driven by advances in battery chemistry and state policies designed to support the emerging technology.
"It's pretty amazing how much growth there will be in energy storage," JB Straubel, chief technology officer for Tesla Motors, said at a recent industry event. "We have to get to a 100 percent renewable grid, and storage becomes an absolute imperative to get there."
Ross' lithium-ion battery storage system, contained in a 4-foot-tall metal box mounted on the wall of his garage, is made by Tesla but offered by SolarCity of San Mateo, Calif., to its California solar customers as part of a small pilot project. SolarCity is currently offering what it calls the Home Energy Storage system for $1,500 down and $15 a month over a 10-year lease period.
For now, Ross' battery system, which can draw power from either his solar panels or the electric grid, simply provides backup power. But in the future, residential storage is expected to include a variety of features, such as cellphone apps to remotely control when energy is released from the battery.
"The Volt is like a gateway drug to getting solar panels," said Ross, an electrical engineer. "Then, if you get the energy storage system, you can turn the solar power into a battery that provides power even if (the utility company) goes down. When the next earthquake comes along, the battery can keep my refrigerator and television running. This is a no-brainer."
Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric are now required by state regulators to collectively buy 1.3 gigawatts of energy storage capacity by 2020, enough to supply roughly 1 million homes. Commercial businesses, from almond orchards in the Central Valley to hotels in San Francisco, are installing energy storage for backup power and to avoid costly charges for electricity during peak usage hours.
Tesla, best known for its all-electric Model S sedan, aims to be in the front ranks of the emerging energy storage market. Besides offering the residential energy storage units to customers through SolarCity, where Tesla CEO Elon Musk serves as chairman, Tesla is making much larger-scale energy storage systems for commercial businesses at its Fremont, Calif., factory and has installed an energy storage unit at its Tejon Ranch Supercharger station off I-5 in Southern California.
"Tesla is driving as fast as we can into this space," Straubel said during a keynote address at the recent Energy Storage Symposium sponsored by Joint Venture Silicon Valley. "I see us more as an energy innovation company at our core than even a car company."
Straubel, who also serves on the board of SolarCity, said lithium-ion battery technology, which powers Tesla's cars, has revolutionized both the electric vehicle and energy storage markets.
Tesla is ramping up manufacturing to reach the full capacity of its Fremont, Calif., factory, with the goal of making half a million cars a year by 2020. To drive down the cost of batteries, it plans to break ground this month on a massive "gigafactory" for battery production that is expected to produce more batteries than currently are being made globally. The batteries are not just for Tesla's cars but also for Tesla's product line for stationary storage.