Tesla Energy (TSLA) has entered a significant agreement to supply its Megapack batteries to Intersect Power in a multi-billion dollar deal that will extend through 2030. Under this contract, Tesla will deliver 15.3 GWh of Megapacks over the next 6-7 years. These batteries will support large-scale solar and battery energy storage systems (BESS) in California and Texas.
Intersect Power’s projects in Oberon, California, have already benefitted from Tesla’s Megapacks, with completed or ongoing installations totaling 2.4 GWh. This new agreement cements Tesla Energy’s position as a leading battery supplier for energy storage systems in the U.S.
Sheldon Kimber, CEO of Intersect Power, emphasized the strategic value of the partnership: “No one in the market can match Tesla’s depth of experience in storage technology. This partnership is the foundation of one of the largest and fastest-growing storage portfolios in the country here at Intersect Power. This storage franchise is the perfect complement to our multi-billion dollar expansion of renewable generation that is expected to more than triple the size of our company over the next three years.”
Founded in 2016, Intersect Power develops, owns, and operates some of the world’s largest clean energy resources, providing domestic and international low-carbon electricity, fuels, and related products. Their portfolio includes 2.2 GW of operating solar PV and 2.4 GWh of storage, with plans to expand into grid-tied renewables, battery storage, data centers, and green hydrogen.
Committed to deep decarbonization, Intersect Power is key in driving the transition to a net-zero emissions economy. In 2022, they secured $3.1 billion in project financing for 2.2 GW of clean energy capacity and have procured 4.9 GW for delivery between 2025 and 2029
To meet the growing demand, Tesla established a Megapack production factory in Lathrop, California, in 2021. This factory is Tesla’s first dedicated large-scale battery energy storage manufacturing plant, a Megafactory. A second Megafactory is under construction in Shanghai, China. Each facility will have an annual production capacity of 40 GWh upon completion.
Recent data shows Tesla Energy’s battery storage deployment more than doubled in Q2 2024 compared to the previous quarter, delivering nearly 10 GWh. Official numbers will be announced during the Q2 2024 Earnings Call on July 23. Drone footage from the Lathrop Megafactory reveals a substantial number of Megapacks ready for distribution to BESS sites across the U.S.
Estimating the financial impact of the Intersect Power deal, the average cost of 1 MWh of lithium-ion battery pack is approximately $450,000. Multiplying this by 1,000 gives a cost of $450 million per GWh. Therefore, the 15.3 GWh contract is valued at around $7 billion over six years. This figure is subject to change based on battery pricing trends throughout the project.
