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Tesla's Energy Storage Can Power All of California in 4 Years

Updated: Aug 3, 2023

Tesla recently announced that their energy storage development increased by a whopping 360% from a year ago. They built a total of 3.9 GWh in just the first three months of 2023. Tesla Energy, a branch of Tesla, obtained a revenue of $1.53 billion in the first quarter, up 148%. So far, they have deployed 5 GWh of Megapacks.

Tesla's red logo
Tesla logo

Let’s put this into perspective. California needs a total of 49,000 megawatts, or 49 gigawatts, of battery storage to achieve its goal of 100% carbon-free electricity by 2045. At Tesla’s current rate, they build 11,700 megawatts of battery storage a year. That means that California can reach its goal in four short years if they were to receive all of Tesla’s new Megapacks. Michigan could reach its battery storage goal in just a year.


Tesla is widely known for increasing the manufacturing of their products, like their battery vehicles, exponentially for years. The same has been happening for Tesla Energy and will continue to happen for at least a few years. They could be powering entire countries soon.


According to the United States Environmental Protection Agency, 25% of greenhouse gases come from electric power and 28% from transportation. Tesla is speeding up the decarbonization of the United States in sectors that account for the majority of greenhouse gas emissions.


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As we talked about in our blog of the top 13 companies saving the Earth, Tesla has built the world’s largest lithium-ion battery, with a storage capacity of 129 megawatt-hours; that is enough to power 30,000 homes. It will be easy to beat this record because they build 30 times more battery storage every three months.

A dense suburban neighborhood with very identical houses
From IDuke on Wikimedia. https://creativecommons.org/licenses/by-sa/2.5/deed.en No changes were made.

Other than battery storage contributing significantly to decarbonization, it can stabilize the grid and prevent blackouts. The 2021 Texas Power Crisis could have been much less severe had Texas had significant amounts of battery storage. Much of ERCOT’s (the organization that operates Texas’s electrical grid) power generation went offline during a series of winter storms. Many power lines and power plants were not built to withstand extreme cold like this, so there was not much to be done. But having lots of batteries would have filled much of the gap that offline power plants created. Hundreds of lives would have been saved, and billions of dollars would have been saved.


Batteries can also indirectly promote renewable energy development. Because the sun only shines during the day, solar panels only generate electricity during the day. With battery storage, electricity can constantly be fed into the grid making electricity cleaner overall. Some states, like California, produce massive amounts of excess electricity from renewable energy. Batteries can spread this power throughout the day, and therefore keep fossil fuel power plants offline.

A coal power plant with steam rising from the facilities
From Lodo27 on Wikimedia. https://creativecommons.org/licenses/by-sa/3.0/deed.en No changes were made.

Democrats on the city, state, and federal levels have passed bills and funding that continue to have a significant impact on renewable energy and battery storage development, which we talked about in one of our other blogs. We talk mainly about how Democrats have had a major positive impact on the environment since Joe Biden became President of the United States. After passing over half a trillion dollars for climate-related initiatives, the United States is on track to cut emissions in half by 2030 when compared to 2005 levels.


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Demand for Tesla Megapacks is still strong as there is a 2-year waitlist. Batteries that have a capacity of tens of thousands of megawatts are already ordered and will be installed soon. Only time will tell if Tesla will have a demand issue for this kind of product. I believe that demand will increase for a few years as the world recovers from the pandemic, and as power companies and countries see that Megapacks can bring so much benefit.


Tesla will likely make tens of billions of dollars of profit over the years as their production increases. There is little competition in this market, and Tesla has a rapidly growing manufacturing rate. They are planning to open a new factory in Shanghai that could build up to 10,000 Megapacks a year. Since each Megapack can store up to four megawatt-hours of power, that’s over 40 GWh of storage being built a year - more than doubling their current rate of production. 36 million homes could be powered for one hour. That is also close to $25 billion in extra revenue every year. To put that into perspective, they make $100 billion every year.

Thousands of solar panels on top of a Tesla building
From Jakob Harter on Wikimedia. https://creativecommons.org/licenses/by-sa/2.0/deed.en No changes were made.

Tesla is a pioneer in electric vehicles, renewable energy, and battery storage. Their environmental impact on the world will continue to grow as time goes on, even as more competition arises.

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