HAWTHORNE, Calif.—In the sleek warehouse of Tesla’s Design Studio, CEO and co-founder Elon Musk announced the company’s latest products—a line of stationary batteries for households and utilities meant to store energy so that it can be used when energy is scarce and/or expensive.

The home stationary battery will be called the Powerwall, and it will cost $3,500 for a 10kWh unit. That unit is optimized to deal with serving a house if the traditional power grid goes down. A cheaper, $3,000 version will have a 7kWh capacity, and it will be able to help a house with solar panels deal with the daily fluctuations in energy supply.

The prices don't include installation, and Tesla said it would be working with certified installers, including SolarCity and others. Musk said that leasing the battery would be an option, and that the price point was "without any incentives" from local, state, or federal governments.

The battery weighs 220 pounds and must be wall-mounted, but it can be located on an inside or outside wall.

In a Q&A before the event, Musk said that the batteries will have thermal management systems to allow them to power houses in hot and cold climates, too—the batteries have an operating temperature range of -20C (-4F) to 43C (110F).

"The key thing for the Powerwall on the consumer side is it’s beautiful, it fits on the wall, you can put it on the outside wall of your house," Musk told journalists. "It's only about 6 inches thick and a few feet across and a few feet tall."

The battery will come with a 10-year guarantee and come with integrated management software: "It will be connected to the Internet so we can create smart micro-grids," Musk said. A version of the Powerwall specs published after the event noted that the 10-year warranty can optionally be extended another 10 years after the first warranty is up.

The Powerwall includes a DC to DC converter, and "a DC to AC inverter may already be there if you have solar," he added. "The ideal solution is really to combine this with solar, [the price of installation] is going to vary on a house by house basis. Some houses are more complex than others."

Chief Technology Officer JB Straubel said that the Powerwall is a 400 volt battery that "doesn’t use heavy gauge wire, so that makes the installation easier."

"You could be totally free of the grid if you want," Musk said.

Megan Geuss

Megan Geuss

Megan Geuss

Megan Geuss

Megan Geuss

Megan Geuss

Megan Geuss

Megan Geuss

Megan Geuss

Megan Geuss

Megan Geuss

Musk and Straubel insisted that installation will not be complex; they estimated installation on an average house should take an hour and a half to an hour, with less time required for installation after every subsequent Powerwall a customer installs. Musk said customers can install up to nine Powerwalls for a 90kWh output.

Within the Powerwall, Tesla-designed software will provide thermal regulation, safety checks, and energy optimization. "All of the Powerwalls and power packs are connected to the Internet," Musk said. "We’re able to work with utilities to shift power around."

Without going into specifics, he also noted that the battery is different in cell chemistry and design from the Model S. "I wish it was that easy," he said of the engineering transferability, adding that the automotive version of the lithium-ion battery pack "has a much higher ability to cycle."

The Powerwall units are available for pre-order now and will start delivering later this summer. Musk and Straubel said that more batteries will be available as "phase one of the gigafactory" comes online next year.

Big power companies included

Musk also said that Tesla will be selling power packs to utilities. He said those batteries will be "infinitely scalable" utility class units starting at 100kWh, which could be scaled up to multi-gigawatt-hour class packs.

One of the key criticisms of Musk's battery business plan has been that home batteries are not as space-constrained as car batteries, and lithium-ion batteries are not as cost effective as, say, lead-acid batteries when space isn't an issue. Musk refuted that, however, saying, "there’s nothing remote in these price points. Energy density is extremely high, and even utilities are space-limited. They can’t always get some new piece of land for power packs."

"It matters quite a lot that these things are compact" to homeowners, businesses, and large utilities alike, Musk added.

Still, Tesla's move could ultimately scare traditional power utilities, who stand to lose revenue from homes that will not have to buy energy during peak periods. "Our goal here is to fundamentally change the way the world uses energy at the terawatt scale," Musk said. "The goal is complete transformation of the entire energy infrastructure of the world."

Move over Tesla Motors

With respect to how this new product line will affect Tesla's business, Musk said that all of these battery devices would be branded as "Tesla Energy" products, signaling a secondary division separate from the electric car company.

The plan for the Powerpack isn't totally untested—Tesla has a partner in SolarCity, a provider of solar panels. Musk is the chairman of the board of SolarCity, and Tesla and SolarCity recently joined forces to test adding a stationary battery to the solar power ecosystem, edging homes toward the kind of self-sufficiency that could get them off the grid entirely.

Musk also noted that the $5 billion gigafactory being built in Reno, Nevada, could be seen as a separate product in and of itself. Lithium-ion battery production is a bottleneck in increasing the supply of greener energy, he said, adding, "The way we think about the gigafactory is not like a factory with a bunch of off-the-shelf machinery, but we’re thinking of it as a machine itself—gigafactory version one."

Tesla's vision for a battery-powered future is a grand one that doesn't stop with Tesla. "We’ve been trying this product out in many iterations for over a year," Musk said. "If ultimately some other company offers something better than Tesla at a better price, that’s great, that’s better for the world... We’re just not aware of who would be really even second."

"This is not something Tesla will do alone," Musk told an audience of journalists and VIPs at the end of the night. "The open sourcing of patents will continue."

At the end of the night, the CEO showed that his vision was practical and realistic. "This entire night has been powered by batteries," Musk said to applause. "The batteries were charged by solar panels on the roof."