This week, Tesla invited journalists to an announcement at the company's base in Hawthorne, California, in which Elon Musk is expected to give details about a new product unrelated to his line of electric cars. Tesla’s next big thing is widely believed to be a stationary battery, which will power homes, offices, and industrial spaces with stored energy.

Reports from The Wall Street Journal suggest that Tesla will devote as much as 25 percent of the capacity of its new $5 billion gigafactory, currently being built in Reno, Nevada, to the production of large battery packs for homes and businesses.

One of the most difficult things about energy distribution is that demand fluctuates dramatically during the day as households use more electricity in the morning and evening and hardly use any during the day while most people are at work. That problem can be multiplied with renewable energy sources, which suffer from supply fluctuations as well—energy is in abundant supply when the sun is shining or the wind is blowing, but production drops off as the weather changes. Cost-effective heavy-duty batteries could help store excess energy and smooth out the issues caused by resource inefficiency.

Still, just because Tesla has had success building car batteries doesn't guarantee it will have success in the stationary battery industry. Venkat Viswanathan, an assistant professor for mechanical engineering at Carnegie Mellon University, told Ars over the phone today that cost effectiveness has to be at the forefront for a company trying to sell energy storage units.

"A car battery needs to be compact, it has to be light, so it can be more expensive than a battery for a stationary market, [where] space is not a constraint and weight is not a constraint," Viswanathan said. Especially for businesses looking for economies of scale, alternatives like compressed air energy storage will compete with stationary batteries in cost.

For individual homes, however, it might make more sense to invest in a battery, but again, cost will be a major issue when space isn't a factor. Tesla's lithium-ion batteries, which will be produced in partnership with Panasonic at its gigafactory, will have to compete intensely with products using cheaper electrodes and electrolytes. (Lead-acid batteries are one example, but several companies and research centers are also experimenting with materials that have advantages over the tried-and-true).

Tesla has already built stationary batteries for homes in partnership with SolarCity, a solar panel company that has Tesla CEO Elon Musk as a chairman. SolarCity says it has installed 300 Tesla-branded energy storage units in homes so far. Traditionally, people with solar panels on their roofs sell the excess electricity made during the day back to power companies and then buy power from power companies at night. With a battery pack, a house equipped with solar panels can be more self-sufficient.

"Tesla's long history of research and development has enabled a cost-effective, wall-mounted storage appliance that is small, powerful and covered by a long lasting full 10 year warranty,” SolarCity’s website says of the Tesla battery unit being used in the pilot program. "The actual battery unit is about the size of a solar power inverter, and will be mounted on the wall in your garage or near your electrical panel.”

Viswanathan told Ars that buying a battery for energy storage won't make sense in all markets, but in some places, like Hawaii or Scandinavia, where solar and wind energy penetration is high, it could make economic sense for a household to buy a stationary battery. "There’s lots of people who are far removed from the grid, and the stability of the grid is not guaranteed," Viswanathan told Ars. "I would imagine even places like Japan and South Korea might benefit from something like this. In those places such a product makes perfect sense, especially if you’ve already gone halfway there by installing solar panels."

The WSJ says that SolarCity told California regulators last year that it cost $23,429 to install a stationary battery in a home. The solar power company is letting its pilot participants pay the battery off in monthly installations over 10 years. In leveraging the economies of scale that come with operating its gigafactory, Tesla may be able to reduce the cost of stationary batteries.

Still, stationary batteries haven't become widespread yet, in part because there's been little demand for them from households, and in part because developing deploying units to store energy is expensive. Thus far, governments have largely stepped in to spur further research. In March, the Los Angeles Times reported that the California Public Utilities Commission will require three of the state’s largest electricity providers to install 1,300 megawatts of storage capacity by 2024. It also noted that PG&E has received several million dollars in grants from the state to conduct experiments to further energy storage.

The stationary battery market is also not a sector that Tesla will go into unchallenged—LG Chem, Samsung SMI, and AES Corp all make stationary batteries too, according to Bloomberg.

Despite what we know about what Tesla may announce tomorrow at 8pm PST, there are still many unknowns. What will this next run of batteries cost? How much energy will they be able to store? Will Tesla announce any partnerships that will help sell stationary batteries to homeowners satisfied with their service on the traditional power grid?

Viswanathan told Ars he'll be watching to see what Musk announces regarding the battery's warranty—"If I'm a homeowner... I would expect a much bigger warranty" than Tesla gives on its vehicle batteries, he said. Also, he said, he'll be curious about the battery's projected cost: "the costs are going to come down substantially year after year," Viswanathan told Ars. "The number I would be interested in is what the target number is three years down."

Ars will look for answers to all these questions and more tomorrow night at Tesla’s event, so stay tuned!