He didn't actually say "off the charts" demand, unfortunately, but he implied it. Here is my transcription of what he said in the quarterly call with regards to the power wall:
"As many of you know, we announced new versions of our solar battery systems in all of our business units: commercial and government, microgrids, and residential. We're seeing great growth in commercial and microgrid offerings and the new Tesla batteries are helping to widen the addressable markets where we can offer those systems. On the residential side, our fully installed solar battery system costs are about 1/3rd of what they were a year ago. We expect costs to decline further as manufacturing scales, and over the next 5 to 10 years, these cost reductions will make it feasible to deploy batteries by default with all of our solar power systems. Our solar back-up battery system will sell for $5000 as an add on to a lease or a PPA, which is comparable to other backup generator options. It is important to note that the Tesla price of $3500 doesn't include the inverter, permitting, installation, management software, and electrical equipment to wire the circuits that need to be backed up. All of those things are included in our turn-key service in our solar battery systems. Interestingly, the residential backup generator market is actually larger than solar, with over 3.5% of residential customers having back-up generators. The industry leader in this space had over a billion dollars in revenue last year, and had seen a 12% compound annual growth rate over the past 10 years. Now extending the appeal of SolarCity to the traditional market is interesting, but it's a small part of the strategic interest we have in batteries. Batteries spread throughout the distribution system can lower the costs of maintaining the grid and new market structures designed to take full advantage of this benefit appear likely in several states. Our products, and by that I mean the contracts (?) as well as the management software is grid services ready and as these markets develop, there's a 50/50 revenue share model embedded in the contracts that we have with our customers. Now, we're not in the position to estimate what these revenues could be, but it's interesting to note that in California, its currently estimated to cost $190 per kW per year to meet new peak loads. The other strategic options that batteries make available to us are hedges against bad policy outcomes, with examples being changes in net metering and solar penalties like high fixed (?) charges. As always, Hawaii is a postcard from the future, the high electric rates there make economic now what will be affordable in other markets with further cost reductions. As a result, we will be offering a 0 down lease in Hawaii next year that will give customers the ability to go completely off grid. With that said, I want to reinforce that customers removing themselves from the grid is a bad policy outcome. There's so much value in distributed energy resources, so we're hopeful that utility business models will adapt to embrace solar with batteries rather than penalize adoptions, which in turn will encourage good defections (???)."
The question marks are me second guessing myself over what word he actually said.
EDIT: Foghat is correct, I'm quoting the CTO, Peter Rive, and he's quoting the CFO at a later time in the conference call (I can't seem to find where he said that without re-listening to the whole thing). Oh well, I guess I'll wait for the Seeking Alpha transcript.
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Don't tell anyone though!
