Tesla launches UK home energy plan in first step to British solar and battery VPP

Tesla has launched a residential energy offer in the UK, in partnership with local retailer Octopus Energy, that promises to be 75% cheaper than any other electricity market tariffs – as long as you have rooftop solar, a Powerwall 2 battery, and preferably a Tesla EV.

The new UK joint venture – which in true Tesla style appears to have had no formal launch or announcement but rather just, sort of, appeared (see below) – is available only to customers with rooftop solar and one or more of the US company’s Powerwall 2 batteries. A smart meter is also a must.

For those households with all of the above, the going rate – for both electricity imports and exports – is a set tariff of 11p/kWh (20c/kWh in Aussie dollars). For households that also happen to own a Tesla EV, an even lower rate of 8p/kWh (15c/kWh $A) is on offer.

A detailed FAQ page on Octopus Energy’s website answers most burning questions customers might have on the details, including that any electricity sourced from the grid via the package is guaranteed to be 100% renewables sourced.

But the really key detail is that those who sign up for the offer will also become part of the UK Tesla Virtual Power Plant, thus – as Tesla puts it, here – joining a network of homes that generate, store and return solar energy to the grid during peak times.

How will this happen? By Tesla controlling all of the Powerwalls! says Octopus. And on this point – perhaps anticipating some resistance to this part of the deal – it goes into a bit more detail.

“Tesla need to control your Powerwall to manage how and when you use your solar energy and what you’ve stored,” the FAQ page explains.

“This helps reduce the wholesale market cost of the electricity you consume, giving you the best rates available, as well as supporting the grid during peak periods.

“This import and export management is what allows us to be able to give you the most competitive import and export rates on the market,” it says.

How UK customers will respond to the idea of being part of a Tesla controlled virtual power plant remains to be seen. In Australia, Tesla has had considerable success with its South Australian VPP, albeit with the support of state government subsidies to encourage households to partake.

But early reports from the Australian Energy Market Operator suggest it hasn’t all been smooth sailing on the consumer engagement side of the equation.

“The nature of dealing with consumers has caused challenges to the onboarding process for many prospective participants,” AEMO noted in July, rather obliquely.

One of the key sticking points appears to have been around education – or perhaps communication – and questions around the ongoing willingness of consumers to “prescribe a level of control” of their batteries to VPP operators.

“Due to the minimum FCAS delivery requirements of the demonstration, prospective VPP participants are reliant on consumer uptake,” the report notes.

“AEMO will continue to work with Customer Services Benchmarking Australia… and prospective VPPs to understand how the consumer experience can be improved.”

For Octopus’ part of the UK deal, it will provide all the electricity retail services, including account management and “friendly customer support.”

As RenewEconomy reported here, Octopus has it’s own dreams of world energy market domination, including in Australia where it recently struck a $500 million deal with Origin Energy to “revolutionise” the gen-tailer’s customer experience as it shifts to a digital and distributed future.

As part of this deal, Origin will deploy the innovative ‘Kraken’ platform developed by Octopus, laying the foundations for a customer interfaced based increasingly around rooftop solar, battery storage and electric vehicle charging.