Tesla Motors Inc. (NASDAQ:TSLA) is looking for more companies that show confidence in its recently-launched battery products. Advance Microgrid Solutions (AMS), a relatively newenergy storage and solution provider, is one of those companies. AMS recently signed a contract with Tesla to buy the Powerpack batteries.
The size of the battery purchase deal is impressive. The energy startup, which has been in the energy industry for three years, is buying 500 Megawatt hours (MWh) worth of utility-scale Tesla batteries. According to Fortune, most of these grid batteries will be installed in California over a five-year period. In the deal with Tesla, the new partnership will build a 10-megawatt project in Irvine, California, next year.
AMS is run by Jackalyne Pfannenstiel and Susan Kennedy, both of whom have a rich experience in the energy industry. In a press release, CEO Ms. Kennedy appreciated Tesla’s battery products. “Tesla’s focus on performance and design makes them the stand out technology choice for our projects,” she said.
While talking to Fortune, Ms. Kennedy said that the partnership with Tesla is “a big deal.” 500 MWh of battery energy capacity means that AMS will buy tens of thousands of home-powering Tesla Powerwall, which costs $3000 for the 7 kWh version, and $3,500 for 10 kWh.
This is the second big deal signed by AMS, after it secured a 50-megawatt energy storage deal with Southern California Edison, last fall.
Tesla launched its battery products at the Hawthorne facility on April 30, and hopes to revolutionize the way people use electricity. The company’s move into the battery business received a warm welcome from fans and analysts. Tesla was able to secure 38,000 orders for its residential energy solution, and 2,500 reservations for Powerpack. According to Bloomberg’s calculations, battery orders from just the first week of launch willgenerate $800 million revenue.
Before launching its battery products, Tesla supplied its Powerpack units to 11 Wal-Mart Stores, Inc. (NASDAQ:WMT) locations in California. It also powered 300 households in the Golden State, which were using solar panels supplied by SolarCity (the company chaired by Tesla CEO Elon Musk).
Tesla’s batteries are quite useful for utility companies that generate power from renewable sources, such as solar power and wind. These companies face fluctuations in producing energy, due to seasonal changes. In such circumstances, Tesla batteries are a stabilizing factor to support the constant grid energy supply.
Recently, Tesla has joined hands with several energy and solution providers, such as EnerNOC and LichtBlick, to explore other major markets. According to a note released by Bernstein this week, Tesla battery products have a major traction in Australia, and several European countries, especially Germany. Last month, the electric vehicle (EV) maker also partnered with Gaelectric; this partnership hopes to come up with a one megawatt energy project next year.
Tesla stock is trading up 0.79% at $247.87, as of 1:46 PM EDT. The stock has surged 11.08% since the start of the year, lagging the S&P 500 Index’s gain of 0.97% over the same period.