Tesla power packs to provide electricity to utility cooperative in Hawaii
09 Mar 2017
Tesla has installed 272 power packs for the Kauai Island Utility Cooperative (KIUC) in Hawaii to provide electricity after dark.
The power packs would allow KIUC to store the sun's power during day time and use it after dark.
Tesla's power packs are expected to save KIUC 1.6 million gallons of diesel fuel annually, which had been the way the utility generated power after dark.
According to Tesla, the power packs would cut KIUC costs per kilowatt hour from 15.5 cents down to 13.9 cents, a fixed price for the next 20 years.
The packs would give Kauai, the ability to cut the use and fluctuating costs of diesel fuel, but Wall Street remains unimpressed.
"At this time, we ascribe zero value to Tesla shares from this business," Morgan Stanley analyst Adam Jonas told investors. "We take this view due to the uncertain economic and regulatory forces facing the energy business, particularly the solar business."
Tesla chief technical officer, JB Straubel told CNBC in an interview yesterday that solar and energy storage formed a new market which accounted for lack of investor interest.
"I think it is a little difficult to see into the future sometimes and see how it is going to grow," Straubel told CNBC. "There are no immediate comparables that they can look to in the past and show how this growth happened."
Tesla had a 20-year contract with the KIUC to deliver electricity at 13.9 cents per kilowatt-hour, which was lower than the utility's cost for power from diesel plants of 15.48 cents, and about half the 27.68 cents that consumers paid in December for electricity in the state.
Hawaii, which had the highest electric rates in the US had set the goal of sourcing all the electricity it used through renewable sources by 2045.
