Should you get a Powerwall 3 as a UK homeowner?

Key features and specifications of the Powerwall 3

From a technical perspective, there are 4 key attributes to highlight for the Tesla Powerwall 3:

Capacity: It’s big

Powerwall 3 comes at a capacity of 13.5 kWh, expandable up to 40.5 kWh under one inverter.

Chemistry: It finally got LFP

Tesla’s Powerwall 2 still featured NMC (Nickel-Managenese-Cobalt-Oxide) chemistry, while the third generation is reported to consist of LFP (Lithium-ferrophosphate) chemistry. LFP is superior to NMC for the home battery use case due to several advantages: First, it offers a longer cycle life (~3,000 cycles vs. >6,000). Second, it is safer, as LFP is more chemically stable as a material than NMC. Third, it is more sustainable, because LFP does not feature any rare and topic metals such as cobalt. Note that you will be unable to find any mention of battery chemistry in Tesla’s tech sheet but a Tesla representative recently confirmed publicly that Powerwall 3 has LFP chemistry.

Inverter: It’s got a very powerful and clever inverter

The Powerwall 3 comes with a hybrid inverter capable of charging at 5 kW and discharging at 11.5 kW, with a 97.5% efficiency. These are absolute best-in-class numbers for any integrated inverter on the market. In addition, the inverter comes with 6 separate inputs. This can greatly enhance the efficiency for PV systems that are distributed across different roofs, with varying aspects or shading conditions. This feature is particularly useful when installing a Powerwall 3 as a new-build rather than a retrofit (where the existing string inverters are typically left in place).

Additional features: It comes with a backup gateway

Like many premium batteries, Powerwall 3 comes with a backup gateway. Such a piece of equipment is needed to decouple the battery from the grid in case of a power outage and therefore become fully self-sufficient.

So how does this compare to other state-of-the art batteries on the UK market, such as the InstaGen battery?

Comparison of the Tesla Powerwall 3 vs InstaGen Battery

On many dimensions, InstaGen and Powerwall 3 are surprisingly similar, as shown in Table 1. Both batteries feature LFP chemistry. Inverter efficiency is also in a similar range.

However, there are three differences to point out:

• System size: InstaGen follows a very different philosophy to Tesla in the sizing of their system. Powerwall 3 comes at a minimum of 13.5 kWh, expandable in 13.5 kWh units to 40.5 kWh. On the other hand, InstaGen comes in 5 kWh units, ranging from 5 kWh to 20 kWh.
• Inverter specs: Tesla’s inverter can deliver 11.5 kW when discharging and charge at 5 kW. InstaGen can charge at the same rate of 5 kW but discharge only at 5 kW. The Powerwall 3 furthermore has 6 inputs while the InstaGen inverter features 2.
• Backup feature: Both Tesla and InstaGen offer an optional backup gateway. However, InstaGen's backup gateway costs half the price of the Tesla Powerwall 3’s.

How to decide between the Powerwall 3 and other batteries?

It depends on a number of considerations whether you benefit from Powerwall 3’s added features:

• Scale of consumption: Tesla’s Powerwall 3 was originally made with the US market in mind, where households consume about 3 times as much electricity than in Europe and where rooftop solar systems tend to be much larger. This is reflected in the systems size, which starts at 13.5 kWh. If this is the right size for you depends on how your household compares to the UK average: For an average UK household with just around 4 kWp in solar panels, a 13.5 kWh battery might be oversized and a 5 kWh or 10 kWh system would likely suffice.
• Retrofit vs. new system: Some of you may have a roof for which the 6 solar inputs the Powerwall features can create added benefits over the 2 inputs the InstaGen system has. However, this is only the case if you are considering a new-build system. When retrofitting batteries in the UK, existing string inverters are typically left in place in order to retain Feed in Tariff (FiT) generation payments.
• Power outages in your area: If you live in an area where power outages are common, the Powerwall’s backup feature can create added benefits for you.

We have built an online tool to simplify this decision for you - find out in 30 seconds which battery is best for you:

Octopus Energy tariffs for Tesla Powerwall users

There are two major parts of Tesla’s collaboration with Octopus. First, Octopus’ installation arm will add Tesla Powerwalls to its portfolio. Second, Octopus has opened up their Intelligent Flux tariff to Powerwalls.

Thus far, only GivEnergy owners have been eligible for Intelligent Flux. This has changed. With Intelligent Flux, Octopus basically aggregates customers’ batteries, solar panels, and EV chargers into a “virtual power plant” (VPP), participating in so called “flexibility markets”, where grid operators remunerate Octopus for helping balance supply and demand in the grid. Octopus then shares parts of these rewards with its Intelligent Flux customers through the cheaper tariff.

The “Intelligent” Flux tariff is very different from Flux (without the prefix “Intelligent”), which is accessible with any battery system.

The standard Flux tariff has three periods with different export and import tariffs. For example, you can import at 15 p/kWh during off-peak hours (2:00 - 5:00 am) and at 36 p/kWh during peak hours (4:00 - 7:00 pm), with export rates ranging from 6 p/kWh to 26 p/kWh (see Figure 1).

The Intelligent Flux tariff is different in two ways: First, it has only two periods: A peak period between 4:00 – 7:00 pm and an off-peak period for the rest of the day. Second, import rates equal export rates, at 23-31 p/kWh depending on the period (see Figure 2).

Note that with Intelligent Flux, you will need to hand over control of your battery to Octopus. This is needed, as Octopus’ virtual power plant (VPP) – of which your battery becomes part if you sign it up for Intelligent Flux – needs to respond to market signals in continuously and often at very short notice. Whether you are willing to hand over control or not is a matter of personal preference.

So the core question becomes: Does Intelligent Flux provide to sufficient economic benefit over Standard Flux – potentially even to make the premium Tesla Powerwall pay back as quickly as a battery like InstaGen? We will answer this question in the next section.

Economic viability of the Powerwall 3

Let’s calculate payback period for the Powerwall 3 compared to an InstaGen battery which we mentioned in the previous section. We assume a typical “large UK household” as a reference:

• Daily Consumption: 10 kWh
• Existing Solar PV System: 6 kWp without a battery
• Current Tariff: Standard Eco 7 with a 10 p/kWh export rate

Price of the Powerwall 3

The first important consideration is price, where the Powerwall is markedly more expensive than the InstaGen battery.

• Powerwall 3 - ~£7,800-9,500 for 13.5 kWh: Tesla quotes ~£5,500 for the Powerwall 3 + ~£800 for the backup gateway. However, this is excluding delivery, installation and VAT (which is currently zero in the UK for batteries). Few UK installers have already released prices for a Powerwall including installation – neither has Octopus. The first figures available are around ~£9,500 all-inclusive. This would imply about ~£3,200 for delivery and installation. We at Capture Energy believe this is too expensive and costs of about ~£1,500 for delivery and installation are more realistic, implying a price of ~£7,800. For a fair comparison, let us make two separate Powerwall cases for both price points.
• InstaGen - ~£6,100 for 15 kWh: A 15 kWh InstaGen system comes in at an all-inclusive price of ~£6,100, including inverter, delivery, installation etc, or ~£3,700 / ~£4,900 for 5 kWh/10 kWh respectively.

Savings on electricity costs with Powerwall 3

Tesla’s Powerwall enables slightly higher annual savings. We modelled both systems in 30min intervals across the entire year, including PV production, consumption, charge, and discharge of our “average large household”. The Powerwall 3 system produces annual savings of ~£1,020. Savings for the InstaGen system are lower at ~£950 despite being slightly larger (15 kWh vs. 13.5 kWh). These reduced savings reflect the difference in electricity tariffs – i.e., Intelligent Flux for the Powerwall and the standard Flux for the InstaGen system.

However, comparing annual savings to costs, the InstaGen systems pays back more quickly, after around 6.5 years, compared to 8-9 years for the Powerwall 3 (see Figure 3).

Conclusion

The Tesla x Octopus offer might be less of a game-changer than expected, purely from an economic perspective. However, the Powerwall 3 is a very powerful product, with several added benefits. Ultimately, the decision depends on your specific energy needs and whether the Powerwall 3’s backup feature justifies the additional cost.

To make the best choice, use our online tool to find the ideal battery solution for your home in less than a minute.