California, boasting one of the world’s largest power grids, recently achieved a significant feat in battery storage, drawing the attention of none other than Tesla CEO Elon Musk.
What Happened: A Renew Economy report published on Thursday highlighted that battery storage became the largest single source of power for the California grid for the first time last Tuesday. The report also referenced a tweet from data analyst Joe Deely, who noted evening peak output of battery storage exceeded 6 gigawatts for the first time.
This allowed battery storage to surpass gas, hydro, nuclear, and renewables as the primary source of power for a roughly two-hour period during the evening peak, according to the report.
Tesla’s official Megapack Twitter account shared the Renew Economy story, prompting Musk’s response: “Major milestone.”
See Also: Best Renewable Energy Stocks
Deely followed up on Monday with a tweet indicating this scenario had repeated between 6:45 PM and 8:25 PM. “It looks like battery storage becoming the top supply source for early evening hours will be a common occurrence during shoulder months on the @California_ISO grid,” he stated.
Why It Matters: California’s achievement shouldn’t be surprising, given its pioneering role in advancing green energy and transitioning to a more sustainable future. For Tesla, this news is particularly positive, especially during a time when its core electric vehicle business faces headwinds due to slowing EV adoption and economic uncertainty.
Analysts have begun to shift their focus beyond Tesla’s struggling EV segment, looking towards its ancillary businesses. In an early March report, RBC analyst Tom Narayan emphasized the potential of Tesla’s Megapack utility-grade battery storage business. He stated, “Tesla’s Megapack business could be worth substantially more than its standalone car business,” estimating it could add $120 billion to Tesla’s valuation alone.
Piper Sandler analyst Alexander Potter shares a similar view. He believes Tesla’s energy business could generate ten times the revenue expected from Cybertrucks, adding that over half of Tesla’s net profit growth between 2023 and 2025 could come from stationary battery sales.
In premarket trading, Tesla’s stock rose 0.52% to $142.77, as per Benzinga Pro data.
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