A California real estate development company plans to install Tesla batteries in up to two dozen of its highest profile offices in the Los Angeles area.

The Irvine Company, a Newport Beach-based developer that is a dominant landlord in Orange County, said the deal with Advanced Microgrid Solutions (AMS), will save it as much as $1 million a year in energy expenses.

San Francisco-based AMS, a renewable energy company, will install Tesla's commercial-grade battery, called the Powerpack, which stores 100 kilowatt hours (kWh) of power and retails for $25,000 each.

Tesla The Tesla Powerpack battery.

In all, the batteries are expected to supplement power for about 7 million square feet of office space.

The first phase of the Irvine Company project, which will include up to 24 office buildings in Irvine, is expected to reduce peak demand in those buildings by 25% and provide Southern California Edison's (SCE's) with up to 10 megawatts of reserve capacity -- enough to supply power to 10,000 homes.

The 15-story Irvine Spectrum Tower at 20 Pacifica Ave. will be the first building to receive the batteries by the end of the year.

While financial terms of the agreement were not disclosed, a published report said that AMS will spend about $30 million installing batteries in buildings in the areas around the Irvine Spectrum and John Wayne Airport.

For the initial part of the Irvine Company project, AMS will team with renewable energy company SunEdison to finance, install and operate the Powerpack commercial battery systems, including seamlessly switching the buildings to battery power whenever SCE signals that demand on the grid is too high.

The Tesla Powerpack can be daisy-chained together with others to create any sized battery system. The Powerpack systems being installed in The Irvine Company commercial buildings will take up the equivalent of about five parking spaces; the batteries will be charged during nonpeak hours and used, when needed, at peak daytime hours or in the event of a power failure.

"As a long-term owner, the Irvine Company takes great pride in being on the cutting edge of building design, sustainability and energy efficiency," Rich Bluth, Irvine Company's vice president of Energy Management, said in a statement. "Energy storage is a game-changer. It will allow building owners to participate in grid support and reduce costs while causing no disruption or discomfort to our customers, residents or guests."

Stored energy initiatives are part of SCE's grid modernization plan, which is a model that encourages distributed solar power and energy storage with power plants acting as grid resources.

"SCE is tapping into the power of their own customers' building load to manage the grid," Susan Kennedy, chief executive officer of AMS, said in a statement. "This revolutionary partnership between a utility and its customers represents the future of the electric grid."