Tesla’s ( TSLA ) energy business is expanding into Texas, partnering with solar and home energy infrastructure provider Sunrun ( RUN ) to help homeowners build “virtual power plants” and make money in the process.
In a statement, Sunrun said it partnered with Tesla subsidiary Tesla Electric, a retail electricity provider in Texas, to support the Texas power grid through Tesla Powerwall battery owners.
Tesla Electric is the company’s retail electricity provider that gives owners of Tesla Powerwalls the option to let Tesla manage and regulate an owner’s power system, either at home or by distributing power back to the grid. With the Tesla Electric service, Powerwall owners can optimize their profits by selling back to the grid and sharing electricity with the community, in this case the Texas Power Grid.
Customers will be compensated in the form of annual payments, Sunrun said, currently calculated at $400 per Powerwall for 2024.
Sunrun shares jumped over 10% on news of the partnership.
Sunrun said the partnership with Tesla has enrolled more than 150 Sunrun customers in an “aggregated energy program” and will grow by using stored solar energy from home batteries to add electricity reserves to the grid during peak consumption. .
Sunrun also uses other energy storage providers, but the company noted that Tesla Electric is a preferred provider for the service because of its customer rate structure and “virtual power plant” functionality, where Powerwall owner groups are collected virtually through software and batteries. to create a power source capable of adding to a larger electrical grid.
“The Texas grid has already experienced a traumatic spring and summer due to weather vulnerability, and we know the state also needs more power to meet increasing demand on a daily basis,” Sunrun CEO Mary Powell said in a statement, noting that Texans are now increasingly adding batteries to their solar installations, like the ones Sunrun is installing.
Texas was hit by Hurricane Beryl just weeks ago, knocking out power to millions of customers connected to Texas’ troubled power grid, managed by local regulator the Electric Reliability Council of Texas (ERCOT). Beryl’s destruction comes three years after a winter storm destroyed the Texas grid, knocking out power for weeks during a cold winter.
Since then, ERCOT has experimented with ways to increase the resiliency of its grid, and distributed energy strategies such as virtual power plants have been implemented.
Added Sunrun’s Powell, “On-site energy storage not only gives homeowners peace of mind with outage protection, but also enables them to participate in programs like these by contributing to solutions that improve the lives of those in their communities .”
Tesla did not comment on news of the deal, but the company has noted growth in its energy business. In its latest Q2 earnings report, the company said it set a record amount of battery storage, which was more than double Q1’s total.
Wall Street analysts, including Morgan Stanley’s Adam Jonas, are bullish on Tesla Energy, one of the company’s biggest growth drivers.
Jonas called Tesla’s Q2 energy storage figure a “show stealer” in a recent research report, noting that the 9.4 GWh deployed was double the firm’s forecast.
“We believe investors will begin to pay more attention to Tesla Energy, which we value at $36 per Tesla share ($130 billion) as a business uniquely positioned to benefit from investments in the electric grid of the US accelerated by the AI boom,” Jonas said.
Pras Subramanian is a reporter for Yahoo Finance covering the automotive industry. You can follow it X and so on Instagram.
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