Chips & Hardware
Home batteries get cheap as Tesla, Base Power race for share
A wave of competition — led by upstart Base Power, which has raised $2 billion in less than a year — is driving down the price of home battery systems as virtual power plants make them commercially viable.
Competition is heating up in the race to install home battery systems, with heavy hitters and nimble startups all vying for a piece of the market. Tesla may have led the pack for years, but it’s now feeling the heat from upstarts like Base Power, which has raised $2 billion in less than a year. Tesla recently introduced a new Powerwall battery leasing plan that cuts the monthly price by more than two-thirds — an apparent response to that competition.
The price cut is steep: home batteries typically cost more than $10,000 installed, making them attractive mainly to people with deep pockets who already have solar panels generating more power than they use. Now, homeowners in Texas can lease 27 kilowatt-hours of Tesla Powerwalls for $35 a month, or 39.2 kilowatt-hours of Base Power batteries for $19.
That pricing is possible because of two things: declining battery costs, and a technology called the virtual power plant (VPP). A VPP aggregates and coordinates distributed energy resources like batteries — and in some cases water heaters — so thousands of individual devices behave on the grid like a single large power plant, one a utility can call on during periods of high demand. The VPP market is still small, at $7.4 billion today, but it’s expected to top $30 billion by 2033, according to Grandview Research.
Traditionally, utilities handling demand spikes had two options: build expensive “peaker plants” that run only during high demand, or pay large energy users to disconnect for a few hours. Now they can pay a VPP instead. VPP operators charge batteries when electricity rates are low, then sell that stored power back to the grid at a profit when demand pushes prices up, passing some of that profit to consumers through low electricity prices, cheap backup batteries, or both.
VPPs also move faster: building a peaker plant can take years, while VPPs can be built in months since installing home batteries sidesteps land, permitting, and interconnection headaches. Base Power has a deal with North Texas cooperative CoServ to build a 100-megawatt VPP — a scale that would take a traditional power plant two to four years, according to Tim Pianta, Base Power’s head of utility partnerships. “We’re on pace to install that in under 12 months,” he told TechCrunch.
Tesla operated a VPP using its Powerwall fleet for years without marketing it that way, instead encouraging homeowners to use batteries for arbitrage — charging on cheap solar power by day, drawing down at night. That approach got more than 6.7 gigawatts of Powerwalls installed, but competitors like Base Power, which is installing 8 megawatt-hours of batteries daily and hopes to double that by year-end, are pushing Tesla to change tack.
Why it matters
As AI data centers and broader electrification push electricity demand higher, VPPs give utilities a way to add grid capacity in months rather than years — a speed advantage that is pulling major energy companies and venture-backed startups alike into the category.