3 ms·

While I think this announcement is great news, there are at least two caveats to keep in mind that can mine the long term value proposition: - If there are man

While I think this announcement is great news, there are at least two caveats to keep in mind that can mine the long term value proposition: - If there are many users, the peak/non-peak price differences (arbitrage) will disappear. This is because of supply/demand law. - If solar energy/battery storage takes off, it will be heavily taxed. There is an impending "Sun tax" being implemented in Spain, that aims to make more expensive running a home solar source than taking power from the grid. If necessary, they will tax Lithium. So the Tesla value proposition is in all cases short term.

omfg 11y ago
If Peak / Non-peak is smoothed out, one could argue prices may fall.
army 11y ago
Your analysis of the arbitrage is faulty - if there's a cost associated with time-shifting energy, then the gap will only narrow to the extent that it's still economically justifiable for people to invest the money in time-shifting energy. What you're describing (no peak/non-peak difference plus people still buying batteries to time-shift energy) isn't a steady state - why would people continue to buy the batteries when they're going to lose money on the deal? You'd actually expect the gap to be the price difference per watt plus some additional amount for the capital and inconvenience. Also, if there's significant arbitrage, it will also reduce peak prices - because of reduced demand, and also because of reduced costs of expensive additional capacity. I.e. it can reduce energy costs for people who don't use it.
- antaviana 11y ago
  Yes, what I meant is that each Tesla battery sold will contribute to reduce the peak price and to increase the non-peak price, effectively reducing the gap that is the basis for the value proposition. Because of this effect, the value proposition for existing Tesla battery owners will lower over time. Ironically, the ones that benefit at long term are the non-owners because their peak time price will be lower.

omfg 11y ago

If Peak / Non-peak is smoothed out, one could argue prices may fall.

army 11y ago

Your analysis of the arbitrage is faulty - if there's a cost associated with time-shifting energy, then the gap will only narrow to the extent that it's still economically justifiable for people to invest the money in time-shifting energy. What you're describing (no peak/non-peak difference plus people still buying batteries to time-shift energy) isn't a steady state - why would people continue to buy the batteries when they're going to lose money on the deal? You'd actually expect the gap to be the price difference per watt plus some additional amount for the capital and inconvenience. Also, if there's significant arbitrage, it will also reduce peak prices - because of reduced demand, and also because of reduced costs of expensive additional capacity. I.e. it can reduce energy costs for people who don't use it.

antaviana 11y ago
Yes, what I meant is that each Tesla battery sold will contribute to reduce the peak price and to increase the non-peak price, effectively reducing the gap that is the basis for the value proposition. Because of this effect, the value proposition for existing Tesla battery owners will lower over time. Ironically, the ones that benefit at long term are the non-owners because their peak time price will be lower.