Tesla launches solar retail electricity in Texas
AUSTIN (KXAN)-- About a year after approval from the Texas Public Utility Commission, Tesla has launched Tesla Electric, its solar energy retail program.
The company made the announcement on Twitter on Thursday, calling it "the electricity plan that offers low-cost clean energy for homes with Powerwall-- starting in Texas."
It's the first Tesla program of its kind in the world, and it's part of a pilot program with the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) approved earlier this year.
PUCT approved Tesla Energy Ventures, LLC, as a provider last year, before launching this pilot.
"The intent is to develop more ways for ERCOT customers to manage their electricity use, to their benefit and to the benefit of the Texas grid," said Rich Parsons, PUCT spokesperson.
How would customers do that? Through a virtual power plant (VPP).
"Instead of a big new gas plant, you would have many different distributed energy resources, these small [houses]," explained David Tuttle, researcher and lecturer at the University of Texas at Austin. "Each one would be small, but combined together, they make a meaningful amount of electricity. And you could export it as a virtual power plant."
So, the idea is that homeowners, by power of number, could help reduce stress on ERCOT's grid by selling and sending their extra solar energy back to it.
ERCOT said no VPP currently exists in Texas that sells on the wholesale market.
The new pilot program with PUCT allows Tesla and other companies to try to do that.
It's called the Aggregate Distributed Energy Resource (ADER) Pilot Project.
"This pilot task force, I'm really proud to report, and in conjunction with ERCOT, is solving that in Texas for the first time," said Arushi Sharma Frank, a Tesla spokesperson, during a September 12th PUCT workshop.
She's been part of the task force behind the launch of this pilot.
"The concept is that specific, controllable devices in the home (specifically the Powerwalls in the case of Tesla) could be aggregated across customers in a geographic area and directly participate in the wholesale market, including dispatch through the ERCOT market and the provision of ancillary services," an ERCOT spokesperson wrote in an email to KXAN.
Tesla Electric requires a Tesla Powerwall, a rechargeable lithium battery that goes inside a home and stores solar electricity.
From there, according to Tesla's website, Tesla's algorithms monitor electricity prices in the customer's area and directs their Powerwall to sell their extra power to the grid when prices are high. That's done through its app.
Kind of like an electric stock market, Tuttle said.
The company states it's different than other solar buyback plans, which buy extra solar energy "when it is abundant and cheap."
All that will help Tesla Electric customers save money on their own bills.
Powerwall customers can sell energy "when it is in higher demand and more valuable," the website states. "Compared to other real-time solar buyback plans, Tesla Electric may help its customers unlock substantially more value from their energy exports than real-time solar buyback plans."
"This initiative is about tesla's customers, and it is also about the retail energy offer that Tesla can bring to this market," Sharma Frank said during public comment in an ERCOT board meeting in July.
Who can--and can't-- tap into Tesla Electric
"I think it's pro to have another retailer because that's adding to the number that compete in the competitive areas," Tuttle said.
That's they key; you have to live in a "competitive area" to be able to buy solar energy from a private retailer like Tesla.
That's why even though there are many Powerwall homeowners in Austin, they can't take advantage of Tesla Electric; their provider is likely municipal, like Austin Energy, or a cooperative.
Your provider would have to partner with Tesla, but you, as an individual homeowner, wouldn't be able to participate in Tesla Electric.
ERCOT said municipalities and co-ops represent about 25% of the state. The rest is fair game for solar electric retailers like Tesla.
ERCOT told KXAN that right now, Tesla and other companies are trying to gather customers. The VPP pilot program itself will launch next year.
The spokesperson said there will be a cap on the amount of energy bought and sold, so the agencies can analyze the costs and benefits of it, and resolve any issues before expanding the program.