Tesla enters battery market with technology tested with Jackson Family Wines

Tesla Motors announced on Thursday night that it would enter the market for large batteries to power homes and businesses, using a technology it tested with Santa Rosa-based Jackson Family Wines in its bid to revolutionize the energy sector like it did the automotive industry.

Tesla CEO Elon Musk said his company’s newest foray, Tesla Energy, has adapted the technology it uses for its $70,000 electric cars for use in the residential and commercial market. The battery packs are expected to be sold as part of a package with a solar power system by SolarCity, a solar installer founded by Musk’s cousins, Lyndon and Peter Rive. Musk is SolarCity’s chairman and largest shareholder.

As with Tesla’s electric cars, the battery will probably be too expensive for most residential consumers. The home systems are expected to cost several thousand dollars, discouraging widespread adoption, especially for a product that may only have limited use.

For now, the battery primarily serves as an expensive backup system during blackouts. The batteries are likely to become more useful if, as expected, more utilities and regulators allow power prices to change throughout the day based on market conditions. That way, the software that controls the solar and battery system will allow customers to use their home-generated power - and not expensive grid power - when grid prices spike.

Many commercial customers already buy power this way, and Tesla is planning battery systems designed for them, along with bigger battery packs that utilities can use to manage their grids. Analysts say these utility and commercial markets will probably be more promising for Tesla during the next few years than residential customers.

As part of the early development of the new business, Tesla partnered with companies to test out the products, including Amazon, Target and Jackson Family Wines. Twenty-one Tesla stationary storage systems were installed at Kendall-Jackson winery and several of the Santa Rosa company’s other California wineries, resulting in 4.2 megawatts of power output with a storage capacity of 8.4 MWh.

Katie Jackson, vice president of external affairs and sustainability, said in a statement that “innovation is integral to our value system and core to the success of our family business.”

The energy storage units allow the company’s wineries to smooth out spikes in energy use during periods of peak demand, when it needs electricity for refrigeration and cooling, lighting, water treatment and compressed air.

“It has been a great win for JFW, helping reduce peak demand at our wineries while stabilizing the local electric grid,” said Hugh Reimers, executive vice president and chief operations officer.

Besides contributing to the company’s strong investment sustainability, the energy storage systems will help save hundreds of thousands of dollars for the company on a yearly basis. It said the storage systems combined with its solar efforts should save it $2 million in the next year on electricity costs, reducing its electricity costs by almost 40 percent.

Such energy storage systems compliment Jackson Family Wines’ investment in solar energy. The company was recognized last year by the White House for its solar efforts, installing solar systems at its Kendall-Jackson, La Crema, Cambria, Stonestreet, Carmel Road, Murphy-Goode and Hartford wineries by next year. That is the equivalent of taking nearly 1,250 homes off the grid.

Other wineries are also moving toward the solar route, given that vineyard land is a prime location to capture sunlight and convert it into electricity. For example, the Dutcher Crossing Winery in Healdsburg has a ground and roof solar system that produces enough clean electricity to power 14 average homes on a daily basis. For Boisset Family Estates, solar panels provide all of the energy needs for its Raymond Vineyards in the Napa Valley and DeLoach Vineyards in the Russian River Valley.

The Associated Press ?contributed to this story. ?You can reach Staff Writer ?Bill Swindell at 521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.

EDITOR’S NOTE: The story has been updated to clarify the total power output from the storage systems.