Tesla Powerwall 2 - Review

The Powerwall lithium battery system from Tesla Energy has made a big impact in the solar world and pushed home energy storage into the mainstream. Tesla took the energy storage world by surprise with the release of the first generation Powerwall almost 6 years ago. This unique DC-coupled battery had a much smaller 6.4kWh capacity and was the first high-voltage battery for home use. In comparison, the second generation Powerwall 2, which we review in this article, has over double the storage capacity and includes an integrated battery inverter/charger giving it much more power and flexibility.

The Powerwall had a price increase in late 2018 bringing it up to $10,000 (US$7400). Surprisingly, another two price increases occurred during 2020 increasing the price to roughly $11,000. This is possibly due to the original price being at break-even point to get sales traction and fill the capacity of the Tesla Gigafactory. With the first Powerwall selling for $7200 for 6.4kWh of storage capacity, the new Powerwall 2 still offers a 20% price reduction per kWh and is still competitive when compared to other AC coupled battery systems.

Powerwall 2 main features and specifications

  • 13.5kWh usable capacity and 100% depth of discharge

  • AC coupled battery with integrated inverter/charger

  • 5kW continuous power output with 7kW peak output rating

  • Advanced liquid cooling system

  • 10-year warranty to 70% retained capacity*

  • Listed price AU$11,000 plus $1800 for the backup gateway 2 **

* Based on information available at time of writing - subject to change ** Plus installation costs. Does not include a solar inverter, panels or BOS.

Battery cost comparison

See the complete battery storage comparison - The Tesla Powerwall compared to leading lithium-based batteries including LG Chem and SimpliPhi, plus proven lead-acid and advanced lead-carbon batteries.

Click to see the full battery comparison article including efficiency and rate of capacity loss over time.

Click to see the full battery comparison article including efficiency and rate of capacity loss over time.

Tesla Lithium NMC Battery Cells

The lithium cells used in the Powerwall are produced in the enormous Tesla manufacturing facility known as the Gigafactory in Nevada. The Powerwall uses lithium NMC (Nickel-Manganese-Cobalt) battery cells developed in collaboration with Panasonic which are similar to the Lithium NCA cells used in the Tesla electric vehicles.

Compared to the first Powerwall, the Powerwall was designed to be more compact, easier to handle and simpler to install. Gone are the sleek curves of the first Powerwall, giving way to a more practical rectangular shape with venting either side for cooling and a bright green LED strip. Interestingly it also has a simple on/off switch on one side. Still weighing in at 120kg it is definitely not light, although thankfully it can now be ground-mounted as well as wall-mounted. The IP rating (weather rating) remains high at IP56, although it still should be installed in a sheltered location, such as carport or garage, and out of direct sunlight if possible. Heat and batteries just don't go well together.

Solar Battery Savings Simulator

Try the Clean Energy Reviews solar simulator to determine if the Tesla powerwall is the right battery for your home.

Battery Inverter Included

The Powerwall is an AC battery, meaning it has an integrated AC-DC inverter/charger, which has several advantages and disadvantages that we discuss in detail later. However, one main advantage is the ability to be easily retrofitted to homes with an existing solar installation.

The Inverter power rating is moderately high with a continuous output of 5kW and a peak output of 7kW. The power output is generally well suited to meet the requirements of an average home, which often has several high powered appliances running simultaneously. The 7kW peak power rating is reasonable, but it can only maintain the peak output for 10 seconds; this means it's only suited for brief power (startup) surges and not well suited for off-grid installations. However, for greater power requirements, multiple Powerwalls can be installed in parallel, enabling much higher power output. A recent announcement from Tesla gave approval for the Powerwall to be used for off-grid systems, providing two Powerwalls are installed together at the site. See more about off-grid solar power systems here.

Tesla Powerwall battery specifications - Image credit Tesla - Click to enlarge

Tesla Powerwall battery specifications - Image credit Tesla - Click to enlarge

See the full Tesla Powerwall specifications / datasheet here

Liquid Cooled

The Tesla Powerwall is still the only battery system on the market to incorporate a liquid thermal management system which enables it to operate in a wide range of temperatures from -20 to +50°C. Although, like most lithium battery systems it is likely to derate or reduce its output at temperatures above 40°C. Power derating is common for most lithium-ion based batteries, but Tesla's liquid cooling enables the Powrewall to expel more heat under high loads and during rapid charging which should result in a longer life span and better performance at higher temperatures.

Low-temperature performance

The thermal management system also enables the battery to charge at temperatures below freezing which is when many other lithium batteries suffer from severely reduced charge rates. Lithium battery cells cannot charge properly below 5 °C due to reduced diffusion rates on the anode - learn more here. However, the Powerwall can preheat the cells at low temperatures which it calls preconditioning - “When temperatures are below freezing, preconditioning turns on and heats the Powerwall to improve charging performance”.

Multiple Powerwalls for greater storage needs

The Powerwall 2 can be stacked for more storage capacity - up to 3 modules per phase

The Powerwall 2 can be stacked for more storage capacity - up to 3 modules per phase

For larger capacity systems the Powerwall whas the ability to be setup in split or 3 phase installations with up to 9 battery modules able to be linked together in series. However, the additional Gateway unit is required in these more complex installations. Maximum capacity per phase is 3 Powerwalls.

Additional Solar Inverter Required

The Powerwall 2 is an AC battery (AC in / AC out), so in order to function together with a solar array the Powerwall system requires a separate solar inverter (Refer to the diagram below). One advantage of this is the solar inverter can be 'almost' any model since it operates independently of the Powerwall.

AC battery systems can be easily retrofitted to homes with an existing solar installation, but they are slightly less efficient compared to the common DC battery systems. This is due to losses in the conversion from DC to AC power - first the DC solar energy is converted to AC by the solar inverter, then back to DC to be stored in the battery, and finally back to AC when it is needed by the appliances (with typically 3-4% losses in each conversion). This adds up to approximately 90% round trip efficiency compared to around 95% efficiency with a common DC-coupled battery.

Basic layout diagram of an AC coupled Tesla Powerwall 2 with a solar inverter

Basic layout diagram of an AC coupled Tesla Powerwall 2 with a solar inverter

Tesla Solar Inverter

* New for 2021 *

Tesla Solar Inverter image.jpg

To complement the Powerwall battery system, Tesla recently released a solar inverter. The new (single-phase) string solar inverter will be available in two sizes, 3.8kW or 7.6kW, and appears to be designed for the US market by incorporating rapid shutdown, arc fault and ground fault protection. Note, the inverters are not currently available outside the US.

The full inverter specifications are not yet known but one of the interesting features is the 4 MPPT’s (maximum power point trackers) on the larger 7.6kW model which enables four individual string of solar panels to be connected and operate independently. This is important for rooftops with panels mounted on multiple orientations and would be well suited to rooftops using the Tesla solar tile roof system. Most solar inverters up to 6kW have 2 MPPT’s and can operate with 2 independent strings of panels. There are a few single-phase inverters up to 10kW with 3 MPPT’s but the Tesla inverter is one of only two on the market with 4 x MPPT’s, the other being the new Delta H8E and H10E inverters.

The Powerwall battery can be AC coupled with any brand solar inverter, although using the Tesla solar inverter allows full system monitoring and control through a common app interface. It also offers over-the-air updates much like other Tesla products. Another important note is the 12.5-year warranty which is 2.5 years longer than the industry-standard 10-year inverter warranty period.

Tesla Powerwall 3?

There is some speculation about the next Powerwall from Tesla but as yet there have not been any official announcements made. Considering that many alternative hybrid solar energy storage systems have both a solar inverter and battery inverter in one complete unit, I would guess Tesla might move in this direction and offer an all-in-one Powerwall with integrated solar inverter. All-in-one systems make installation much easier and requires less space to install. For example Redback Technologies, Solax and Alpha ESS supply all-in-one systems with back-up power and additional pass-through power as standard.

I would expect the next generation Powerwall 3 to move in the same direction and offer a complete solar/battery/back-up solution. Based on the previous development timing a new generation Powerwall 3 would likely be announced sometime in 2021.

Backup Gateway

The Powerwall 2 cannot function as a backup power supply or UPS without the additional Backup Gateway. The new Backup Gateway 2 is around $1800 and functions as the household energy management system and communications hub. In the event of a blackout it also isolates the backup circuits from the electricity grid and enables the system to function in ‘off-grid’ mode. The gateway also provides advanced monitoring options and time-based controls.

For those who were hoping to purchase a Powewall and go off-grid, it is only designed to operate in off-grid (back-up) mode for short durations (until the battery is depleted) However, is not designed to function as an dedicated off-grid power system. If anyone is planning to take there home off-grid using a Powerwall or something similar I would recommend reading this first before considering disconnecting from the electricity grid.

Typical system layout with the Powerwall and solar inverter feeding power the home - Image credit Tesla

Typical system layout with the Powerwall and solar inverter feeding power the home - Image credit Tesla

New gateway 2

Tesla announced a new backup gateway 2 in November 2018 which among the many new features is also much more aesthetically pleasing than the old grey backup gateway box. The new gateway’s improvements include higher speed 4G communication, three phase operation with greater control, and more accurate CT monitoring. All in a package that is about 30% smaller and lighter than the old gateway. See the full backup gateway 2 specifications here.

Tesla Powerwall 2 and the new backup gateway 2

Tesla Powerwall 2 and the new backup gateway 2


Tesla is a disruptive and innovative company which has had several last minute changes to its products before release. This may be due to a number of reasons including raising public interest through its clever PR strategies, but there is also likely to be unforeseen technical and engineering difficulties which need to be ironed out before release. This has caused some issues, especially in the case of the Powerwall 2 as some solar installers have installed DC Powerwall compatible systems only to be told the DC coupled version will not be released.

Tesla Energy’s aim is to focus on safety, quality and customer service. A business model that has enabled Tesla to become one of the largest companies in the world without actively promoting their products other than through product launches. The customers and press simply promote it for them. Quite clever!


The warranty for the Powerwall is 10 years with 70% minimum retained capacity (solar self-use and back-up use only). This is much better than the original Powerwall 1 warranty. However, if charged using solar plus low tariff (off-peak) energy, a feature which has just been enabled as of May 2018, then the number of 'daily' cycles could be greater than one and this can reduce capacity at a higher rate. This is where the warranty details come into effect in regards to 'Operation Limitation' - see image below. The ‘aggregate throughput’ is the total amount of energy measured at the battery AC output which is 37.80 MWh. This equates to roughly 80% of the battery capacity, or 10.5kWh, being discharged for every day of the year which is unlikely to happen under real-world operation.

Keep in mind all batteries reduce capacity over time as they are charged and discharged. This is part of the normal aging (degradation) of a lithium (NMC) battery and the min 70% retained capacity after 10 years is reasonable. A few lithium batteries specify a lower degradation rate but a higher upfront cost so it's a matter of balancing the cost/benefit. See the full Warranty details here.

First section of the Warranty - Powerwall 2 - Check with manufacturer for the latest warranty details

First section of the Warranty - Powerwall 2 - Check with manufacturer for the latest warranty details

Performance And Life Cycle

Like the Tesla Powerwall, most lithium battery systems have a 10-year warranty which guarantees the battery will retain at least 70% of its original capacity after the 10-year period, or after a certain amount of energy throughput - a specific amount of energy charged and then discharged.

Since most lithium batteries have only been on the market for 3 to 4 years the real-world performance and rate of cell degradation over time is very difficult to determine. It is also dependent on a number of factors including operating temperature, depth of discharge, total cycles, and rate of charge. Fortunately, the independent ITP renewables lithium battery test centre in Canberra, Australia has been conduction accelerated testing on a wide range of batteries including the Tesla Powerwall with some very interesting results.

The latest Powerwall battery performance results from the ITP renewables  Battery test centre .

The latest Powerwall battery performance results from the ITP renewables Battery test centre.

Under accelerated testing, the Powerwall's rate of degradation is 12% after 1,250 cycles which is roughly in line with what is expected. At this rate, total degradation after 10-years would be approximately 35% and is outside the warranty limit of 30%. However, the accelerated testing regime is extreme and well beyond the typical battery cycling rates expected under real-world conditions. The test also operates the battery outside the warranty conditions specified by Tesla (see above). Also, this is a single test, and I would be confident the Powerwall would satisfy the warranty requirements after 10-years.

Wrap Up

Powerwall 2 monitoring app

Powerwall 2 monitoring app

The Tesla Powerwall is an impressive piece of engineering, and there's no surprise it's one of the most popular battery systems on the market. By designing the Powerwall as an AC battery, it can operate independently of the solar inverter and is compatible with most new or existing solar systems. However, unlike many hybrid inverters, the Powerwall's built-in inverter does not have the ability to isolate or ‘island’ itself from the grid during a blackout and requires the additional Tesla' gateway' to provide back-up power. In regards to off-grid use, the Powerwall was not specifically designed for off-grid installations, but a recent announcement from Tesla has given approval for off-grid use providing two Powerwalls are installed together at the site.

In our complete solar battery review, the Powerwall 2 came out as the best value AC battery systems on the market, with a large 13.5kWh storage capacity, it is well sized for most large modern homes. It’s also the only battery to incorporate liquid cooling which means it may outlast some other batteries, especially in extreme climates.

With a 10-year warranty and building on experience from the durable Tesla electric vehicle batteries, the Powerwall appears to be very a well-engineered battery system and has so far proven to be a high performing battery. Although with the current supply issues you might have to wait 3-6 months to get one.

Alternative Battery Options

There are many other 'hybrid energy storage systems' available which include batteries and are also very good value for money, plus many include a solar inverter with back-up function in one complete unit. For off-grid installations, it is recommended to use one of the well known, dedicated DC or AC coupled off-grid inverter systems which incorporate a number of features designed specifically for off-grid installations.

See some of the many alternative battery systems available here. Click image to continue

See some of the many alternative battery systems available here. Click image to continue

Commercial Size Tesla Powerpack

Large Tesla 100kWh Powerpack module

Large Tesla 100kWh Powerpack module

Tesla Energy also has large scale Powerpack modules available for utility scale and commercial energy storage. The 100kWh Powerpack (ref image) is simply made up of multiple smaller battery units and available in a modular system which can be easily linked together to create several MWh of energy storage. With each Powerpack costing around AU$50K this is a breakthrough price for large scale storage.



Recycling the complex Lithium based batteries used in the Powerwall poses several challenges compared to common lead-acid batteries which are easily recycled. However, much research and development is underway. A recent breakthrough by American Manganese Inc or “AMI” has shown very good results in extracting the raw materials from Lithium NMC batteries for re-use. The Lithium NMC batteries used in the Powerwall are more difficult to recycle, but Tesla claims it will be feasible once the volume increases. Since most Tesla lithium batteries are still in use and are expected to last 10+ years, there are simply not enough used batteries available yet to refine the recycling process.

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