Dive Brief:

• Tesla Motors, in a regulatory filing, said it expects to see a nearly nine-fold increase in revenues in energy storage system sales to SolarCity this year compared with 2015.
• Tesla will sell 168.5 MWh of storage systems to SolarCity this year, more than six times the amount it sold to SolarCity in 2015, according to report from GTM Research based on the regulatory filing.
• If a 52 MWh solar+storage system for the Kauai Island Utility Cooperative in Hawaii is excluded, Tesla's expected 116.5 MWh of sales would be 60% larger than the entire 2015 U.S. behind-the-meter (BTM) market, GTM reports. The U.S. added just over 71 MWh of BTM storage last year.

Dive Insight:

If Tesla’s anticipated battery sales to SolarCity are any indication, the behind-the-meter market could growth substantially in 2016.

Focusing in on a 14A proxy statement that Tesla filed with the Securities and Exchange Commission, GTM Research estimates that Tesla’s sales to SolarCity will exceed the entire 2015 behind-the-meter market.

Tesla has strong ties to SolarCity. Tesla CEO Elon Musk is cousin to SolarCity founders Peter and Lyndon Rive and is chairman of the solar installation company. Two other members of Tesla’s board of directors have also had roles at SolarCity.

The two companies also do a significant amount of work together.

Tesla has agreements under which SolarCity integrates Tesla storage systems with its solar panel for residential and commercial customers. And, from time to time, SolarCity has issued individual purchase orders for Tesla storage devices. That resulted in $2.4 million in revenue in 2015.

Tesla has also entered into power purchase agreements, valued at $12.6 million, under which SolarCity will design, build, own and operate solar panel systems at three of Tesla’s facilities in California.

Tesla also entered a master supply agreement with SolarCity in December 2015 for the purchase of second generation storage systems that “creates a framework” under which SolarCity may purchase more storage systems from Tesla in 2016. That agreement reaped $4.9 million in revenue from SolarCity for Tesla in 2015. In 2016 Tesla anticipates recognizing about $44 million in revenue from that agreement.

Based on Tesla’ disclosures, GTM Research estimates Tesla will sell a total of 168.5 MWh of storage systems to SolarCity in 2016, including 116 MWh of behind-the-meter systems. 

While acknowledging those are just estimates based on projected revenue, GTM senior energy storage analyst Ravi Manghani says, “they indicate a behind-the-meter energy storage market poised for major growth in the U.S.”