Tesla Motors believes it has a solution for our energy needs that requires thinking outside the grid.

The California-based company recently announced a new line of commercial and residential batteries to store electricity onsite, that could either supplement power from the grid or, when used in combination with solar power, could free the households of their dependence on the power grid.

Elon Musk, Tesla’s CEO, introduced Tesla Powerwall, a 10 kWh battery costing $3,500 and a 7.5 kWh battery costing $3,000, for residential consumers. Households could use the stored power when the electricity from the grid is either not available or available at expensive rates.

The State’s response to power shortage in Pakistan has been focused on mega power generation projects based on coal, oil, hydel, and some solar. A combination of domestic solar power generation in combination with intelligent batteries, such as Tesla Powerwall, might provide a fast and inexpensive solution that is likely to save the additional grid expansion and maintenance costs.

Named after the legendary inventor, Nikola Tesla, Tesla Motors’ claim to fame has been the electric-powered vehicles who offered remarkable acceleration and a speed that is comparable to gasoline-powered vehicles. Tesla Motors’ innovative battery design has been behind the success of the company. With Powerwall, Tesla has broadened the use of its innovative batteries from cars to powering houses, businesses, and even cities.

The sleek-looking Tesla Powerwall is shipped in a self-contained, space-saving unit that can be mounted up on any wall, even in a closet. One can combine two or more batteries to get even more power.

“The fact that it is wall-mounted is vital, because it means you don’t have to have a battery room … filled with nasty batteries … It’s designed to work very well with solar systems right out of the box,” Mr Musk said, while unveiling the products.

Tesla also introduced the commercial version of their 100 kWh batteries called Powerpack, which is priced at $25,000. Mr Musk thinks these batteries could be chained together to offer a “gigawatt hour solution.”

Is Tesla the panacea for power-starved developing countries?

Developing countries are starving for electricity. Even where the willingness to pay exists in the middle-income urban economies, governments have failed to provide mechanisms for public and private sector companies to generate, transmit, and distribute electricity. More often than not, the response has been to embark on large-scale power projects that are too complex to design and build, and take a much longer time to bring the newly generated power on line.

See: Why Pakistan's power woes will get worse

Governments in developing countries have only recently recognised renewable energy sources, such as wind and solar, as viable components of the energy mix.

Adding onsite storage, powered by locally-generated solar power, can be part of the solution as it would reduce the immediate need to expand and maintain the national grid in Pakistan.

Pakistan’s electricity crisis faces a double whammy. The high fertility rate resulted in a rapid increase in population over the past five decades. This generated the excess energy demand that was not met by a proportionate increase in the infrastructure for power generation and distribution.

At the same time, the per capita consumption of electric power also increased significantly over the years. From about 100 kWh per capita consumption in the mid-'70s, the per capita electricity consumption increased to 450 kWh by 2011.

Source: Tradingeconomics

I recently visited the neighbourhood in Rawalpindi where I spent part of my childhood. While the streets and façades have aged and deteriorated, the insides of homes have been upgraded with additions to floor space and new amenities, such as computers, microwave ovens and air-conditioners. 40 years ago, when I played cricket with my friends in the same streets, air conditioners did not protrude from windows. It is not the same today. As we have opted for creature comforts, our energy consumption has increased manifold.

What is left unchanged is the quality of power infrastructure; a web of electrical wiring struggling to stretch from one utility pole to the next, where chronically ill transformers strive to keep up with the surge for power, is still the scene today as it was forty years ago.

Also read: Solar energy production fails to take off despite electricity crisis

As Pakistanis add more computers and appliances to their homes, the infrastructure connecting us to the grid becomes increasingly inadequate to meet our growing needs. Thinking outside the grid may be a partial answer to the complex power crisis.

Can their batteries manage the load?

Before hooking ourselves to Tesla’s batteries, we must ask if they are capable of being a viable alternative.

Consider a typical American household that consumes 10,900 kWh of power per year. Given that there are 365 days in a year and 24 hours in a day, 10,900 kWh roughly equal 1,240 watts (1.24 kW) of average power demand. Let’s assume that with the adoption of energy efficiency measures, the average demand declines to 1,000 watts.

Tesla’s 7.5 kWh battery is capable of providing 1000 watts for 7.5 hours. It implies that the battery can power a typical house for 7.5 hours. The rest of the time one would still need power from other sources, including the grid and solar.

Now let’s turn to Pakistan. Assuming that a typical middle-class household generates a constant demand for 500 watts, half that of the typical American household, a 7.5 kWh battery will provide power for roughly 15 hours.

This sounds great. But how would one charge the battery in the first place? Grid and solar are the two options. Given the advances in solar cells, it is possible to charge the battery with solar and power the house during the day. One can get residual power from the grid to meet any shortfall.

Tesla-nomics

The success of onsite storage with solar power rely largely on the total cost of power generation and storage. Even at $3,000, Tesla’s solutions are prohibitively expensive for low-income American households. In addition, the installation costs and the costs of an AC to DC inverter could add another two-to-three thousand dollars to the total costs.

Writing in the Forbes, Christopher Helman believes an all-Tesla solution of solar power and storage will cost 30 cents per kWh.

“I think 30 cents per kWh is bonkers. At my home in Texas I pay 10 cents per kWh to Reliant Energy for electricity that is mostly generated by natural gas burning power plants,” wrote Mr Helman.

In an earlier article for the Forbes, Mr Helman explained that despite the innovations in solar power generation, which have significantly lowered the generation costs, coal would continue to play an important role in power generation in the US. Since Pakistan has vast (unproven) reserves of low-grade coal in Thar, the potential for lower cost power generation with coal also exists here.

Given the willingness to pay among the lower middle-class, a storage-plus-solar solution should cost no more than seven to 10 Cents per kWh. Tesla may not be able to deliver at such low costs because its innovation supply chain is based in the US, where labour and other costs are very high.

At the same time, Tesla might be tempted to test the scalability of its solutions by picking up the challenge to power a mid-sized city in Pakistan. The scale of operations, even at lower tariff, could have the potential to be profitable.

Otherwise, Pakistan can always to turn to China or South Korea to explore interests in a large-scale implementation of onsite storage and solar power generation. Since a large number of urban households have already installed battery-powered UPS solutions, the willingness to adopt a similar, yet comprehensive, solution should exist in Pakistan.

Tesla or no Tesla, the onsite storage plus solar solution offers two distinct benefits. First, it adds renewable solar energy to the energy mix. Second, it allows for a non-grid based expansion to power generation.

It is perhaps time to think outside the grid to power Pakistan.