Tesla powerwall
  • Tesla CEO Elon Musk introduces Powerwall
  • Tesla CEO Elon Musk introduces the Powerwall home energy storage unit at an event in Hawthorne, CA on April 30, 2015.
  • Image Credit: Tesla Motors
Tesla Powerwall and Model S
  • Tesla Powerwall and Model S
  • Tesla Powerwall and Model S
  • Image Credit: Tesla Motors
Tesla Powerwall
  • Tesla Powerwall
  • Tesla Powerwall stock photo.
  • Image Credit: Tesla Motors
Tesla powerwall
  • Elon Musk introduces Tesla powerwall
  • Tesla CEO Elon Musk introduces the Powerwall home energy storage unit at an event in Hawthorne, CA on April 30, 2015.
  • Image Credit: Tesla Motors
Tesla powerwall
  • Tesla powerwall introduction event.
  • Tesla powerwall introduction event.
  • Image Credit: Tesla Motors
Tesla home battery system prototype
  • Tesla Powerwall home battery system prototype
  • In this April 20, 2015 photo, David Cunnigham shows a prototype Tesla battery system that powers his Foster City, Calif. home. Cunnigham installed the battery late last year to pair with his solar panels as part of a pilot program run by the California Public Utilities Commission to test home battery performance. Tesla is expected to unveil a stationary battery for homeowners and businesses on Thursday, April 30, 2015. (AP Photo/Jeff Chiu)
  • Image Credit: Jeff Chiu / AP
Tesla home battery system prototype
  • Tesla Powerwall home battery system prototype
  • This April 20, 2015 photo shows a prototype Tesla battery system that powers the home of David Cunningham in Foster City, Calif. Cunnigham installed the battery late last year to pair with his solar panels as part of a pilot program run by the California Public Utilities Commission to test home battery performance. Tesla is expected to unveil a stationary battery for homeowners and businesses on Thursday, April 30, 2015. (AP Photo/Jeff Chiu)
  • Image Credit: Jeff Chiu / AP
Solar City energy management website
  • Solar City energy management website
  • In this April 20, 2015 photo, David Cunningham points toward his SolarCity Web page, which details his solar energy output at his home in Foster City, Calif. Cunnigham installed a Tesla battery late last year to pair with his solar panels as part of a pilot program run by the California Public Utilities Commission to test home battery performance. Tesla is expected to unveil a stationary battery for homeowners and businesses on Thursday, April 30, 2015. (AP Photo/Jeff Chiu)
  • Image Credit: Jeff Chiu / AP
Solar panels on house with Tesla home battery.
  • House with solar panels
  • In this April 20, 2015 photo, David Cunningham walks toward his solar panel-topped home, in Foster City, Calif. Cunnigham installed a Tesla battery late last year to pair with his solar panels as part of a pilot program run by the California Public Utilities Commission to test home battery performance. Tesla is expected to unveil a stationary battery for homeowners and businesses on Thursday, April 30, 2015. (AP Photo/Jeff Chiu)
  • Image Credit: Jeff Chiu / AP
Shinzo Abe and Elon Musk
  • Shinzo Abe and Elon Musk
  • Japanese Prime Minister Shinzo Abe stands with Tesla CEO Elon Musk after returning from a brief test ride at Tesla's headquarters in Palo Alto, Calif., Thursday, April 30, 2015. (AP Photo/Noah Berger)
  • Image Credit: Noah Berger / AP
Shinzo Abe and Elon Musk
  • Shinzo Abe and Elon Musk
  • Japanese Prime Minister Shinzo Abe walks with Tesla CEO Elon Musk at Tesla's headquarters in Palo Alto, Calif., Thursday, April 30, 2015. (AP Photo/Noah Berger)
  • Image Credit: Noah Berger / AP
The Institute for Energy Research (IER) has a history of attacking renewable energy. This isn't a surprise, because the IER is partially funded by the Koch brothers. The IER's latest target is the Tesla Powerwall, which this IER says will take 40 years to pay for itself. As you might suspect, if you attack Tesla, you're going to get push back.

First, let's go over what the IER found. A Powerwall system costs about $7,300 when installed by SolarCity (where Tesla CEO Elon Musk is also CEO). In the optimal case where utility systems have peak and off-peak rates that are often priced at about a 60-percent discount, the Powerwall system can save its user about $193 a year, meaning that it'd take about 38 years to pay for itself (a 2.6-percent annual return on investment). Install a solar-panel system, and the numbers get only a little better, as the costs savings rise to about $358 a year and the payoff period shrinks to about 31 years. For utilities that flatten their rate program so that the same rates are charged all day and night, there's a pretty good chance that the $7,300 Powerwall will never pay for itself.

Now, here's where Tesla responded. The automaker said a more accurate way to calculate Powerwall's payback period is to look at regions with renewable-energy policies like feed-in tariffs. That's where, "the consumer can utilize a Powerwall to consume more of their solar generation and the payback is less than 10 years, while providing the non-economic benefits as well," Tesla says. Tesla also sent Engadget this statement:

"The report done by the Institute for Energy Research is elementary, at best, and completely misses the value of the Powerwall. For one, IER assumes a fabricated rate structure without citing any source. Transparently, if a consumer were to have a rate structure defined in the article, then the payback calculation is indeed correct. However, very few people with this sort of rate structure are interested in Powerwall for financial reasons. They are interested for energy independence, backup security, environmental reasons and tech early adoption, none of which are taken into account."

To which, of course, the IER responded as well.

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