Tesla is launching the home battery business partly because it’s already making vehicle batteries—and as a result it can benefit from the economies of scale that come from making both. Another reason is that the market for storage is expected to grow in concert with the use of solar power. Tesla needs both electric vehicles and solar power to boom if it hopes to fulfill the projected output from a vast $5 billion battery “gigafactory” it’s building in Nevada.The ABC also has a good explainer from earlier this year on the economics of the Powerwall in Australia - Explained: The Tesla Powerwall and what it means for Australia's energy market (drawing from this analysis by Choice - Powerwall payback).
Tesla is apparently looking to launch a new version of the Powerwall mid-year - in the meantime RenewEconomy reports that they have stopped selling the 10kwh model of the original version - Tesla quietly removes 10kWh Powerwall back-up battery storage option.
The primary use case for home storage is daily cycling, also known as peak shaving, which can be applied a few different ways. The primary reason for the product existing is to store up solar energy made from customer panels during the day, which can then be used at night. In markets with net metering, there is no financial incentive for doing this. In markets with no net metering regulation, Powerwalls — and residential battery storage in general — could be game changers.
GreenTech Media has a report on Tesla's efforts to drive storage costs lower as the Gigafactory nears completion - How Soon Can Tesla Get Battery Cell Costs Below $100 per Kilowatt-Hour?
Ben Kallo at equity analyst firm RW Baird believes that Tesla's current battery costs are ~$150 to ~$200 per kilowatt-hour, well below the industry average pack costs of ~$350 per kilowatt-hour. ... Kallo suggests that the Chevy Bolt's battery costs "are significantly higher" than those of Tesla. Kallo suggests that Tesla "could reach its <$100 per kilowatt-hour target in the intermediate term as Gigafactory production ramps." ... GM sees its battery cell cost hitting $100 per kilowatt-hour in 2022. (GM is quoting cell cost, while Kallo is talking about battery packs. A complete battery pack "typically adds 20 percent above the cost of cells," according to David Snydacker, a battery expert at Dosima Research.)