Morgan Stanley report suggests that energy storage, when combined with solar power, could disrupt utilities in the US and Europe.
The investment house believes “Tesla’s energy storage product will be economically viable in parts of the US and Europe, and at a fraction of the cost of current storage alternatives.”
Even with a likely reduction in solar Investment Tax Credits from 30% to 10%, Morgan Stanley expects rooftop solar economics to improve.
Utilities across the country are fighting tooth and nail against “distributed energy,” namely rooftop solar panels, and the investment house Morgan Stanley thinks it knows why: That the plummeting price of rooftop solar panels presents an “existential threat’ to existing power networks, and Tesla’s relentless work to develop advanced solar energy storage solutions provide a leg up over solar energy’s last hurdle.
Morgan Stanley’s report suggests:
Energy storage, specifically Tesla’s product, could be disruptive in the US and Europe…Given the relatively high cost of the power grid, we think that customers in parts of the US and Europe may seek to avoid utility grid fees by going “off-grid” through a combination of solar power and energy storage.
We believe there is not sufficient appreciation of the magnitude of energy storage cost reduction that Tesla has already achieved, nor of the further cost reduction magnitude that Tesla might be able to achieve once the company has constructed its “Gigafactory,” targeted for completion later in the decade.
The key is that Tesla’s Gigafactory is not only expected to produce batteries for its cars; It’s going to be producing batteries for home solar energy storage. The ability to store energy through the night and when the sun isn’t shining has always been solar’s Achille’s heel.
Motherboard’s Brent Merchant thinks something’s fishy about the report, though: “[T]he shadiness here is that Morgan Stanley released the report trumpeting Tesla’s crossover energy storage potential—causing Tesla’s stock to rise—right before it underwrote a fundraising round for… Tesla.”
However, Merchant points out the fact that — with the increased reliance on alternative energy — utility values have declined by $600 billion in Europe in just five years.