What To Know About Tesla And PG&E's 'Landmark' Battery Energy Storage System

When it comes to Tesla Inc TSLA, most people's first thought is cars or self-driving technology. But the company is working on many other things, including solar energy production, and battery technology. These batteries are used in the company's cars, but they're also put to use for home and grid energy storage.

What Happened: PG&E Corporation PCG and Tesla announced on Wednesday they have begun work on a world record 182.5MW, 730MWh battery storage facility. For reference, the average U.S. home uses 10.9MWh per year.

The system will be designed, constructed, and maintained by PG&E and Tesla, and will be owned and operated by PG&E. The controversy-plagued PG&E is planning to have the system fully operational by the end of 2021.

Why It's Important: The system includes 256 Tesla Megapack battery units. The system can run at maximum capacity for up to four hours, and PG&E’s agreement with Tesla allows a system size upgrade that would increase the capacity of the system up to six continuous hours or 1.1-Gigawatt hour.

Over 10,000 PG&E customers currently have installed battery energy storage systems.

Benzinga's Take: A large part of Tesla's valuation will eventually come from energy. It's often said Tesla is a battery manufacturer using cars to sell the company's battery tech.

Energy is one of the biggest industries, and if Tesla wants to use electricity generated by sun and wind, it will need a way to store that energy, as the sun isn't always shining, and the wind isn't always blowing.