Tesla Set to Create the Largest Virtual Power Plant in the World

Tesla and the Australian government are furthering their partnership with 50,000 new installations of the company's Powerwall system and solar roofing tiles.

The Tesla partnership with the South Australian government has been a headline-making one, and both groups now have a new idea to use solar energy. Tesla recently announced that it would help the government install solar arrays and the Tesla Powerwall systems on 50,000 homes. 

This would make the new project the largest virtual power plant in the entire world.

"When the South Australian Government invited submissions for innovation in renewables and storage, Tesla’s proposal to create a virtual power plant with 250 megawatts of solar energy and 650 megawatt hours of battery storage was successful," the company said in a statement. "A virtual power plant utilises Tesla Powerwall batteries to store energy collectively from thousands of homes with solar panels. At key moments, the virtual power plant could provide as much capacity as a large gas turbine or coal power plant."

Energy & Environment

Tesla's Powerwall Met Huge Success in Vermont Neighborhoods

The project is being financed through power sales with a $2 million grant from the government. There's also an additional $30 million loan from the Renewable Technology Fund. In total, the project is expected to cost $800 million and have six times more energy storage capacity than the Powerpack farm at the windfarm near Jamestown. 

State premier Jay Weatherill said he was excited to see how the project would compare to the Jamestown initiative. 

"My government has already delivered the world’s biggest battery, and now we will deliver the world’s largest virtual power plant. We will use people’s homes as a way to generate energy for the South Australian grid, with participating households benefiting with significant savings in their energy bills. Our energy plan means that we are leading the world in renewable energy and now we are making it easier for more homes to become self-sufficient," he said in an interview with Renew Economy. 

Ultimately, Tesla said it plans to have all 50,000 systems up and running by 2022. First stop? Finishing up the trial installations in 1,100 Housing Trust properties. Housing Trust is a program for lower-income households. 

Tesla to Test Out Major U.S. Retailers

Tesla's solar energy systems also made more headlines earlier this week when the company announced it would sell its solar gear in 800 Home Depots. This could be one of the biggest tests for solar energy to become mainstream, especially in the United States. Lowe's, which is the second largest home-improvement chain in the U.S., also announced it was talking with Tesla about putting its products in the iconic blue and white stores. 

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Despite the recent contraction of the U.S. solar market, the interest put forth by Home Depot, Lowe's and Tesla could finally bring more life into the U.S. solar market seen in other nations around the world. One of the biggest potential challenges for Tesla, however, remains initial cost and "sticker shock." Currently, the average cost of a solar panel system is between $10,000 to $25,000 with people paying $7,000 for the battery. And the Tesla Solar Roof averages $52,000 for the average home. 

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