Home batteries are suddenly cheap and everywhere. Here’s why.
Home battery systems are becoming dramatically cheaper and more widespread in the US as competition intensifies between Tesla and fast-growing rivals such as Base Power, which has raised $2 billion in under a year. Tesla has responded by slashing its Powerwall leasing costs by more than two-thirds, a shift made possible by falling battery prices combined with the rise of "virtual power plants" (VPPs), which pool thousands of home batteries so they can act like a single large power station for the grid.
Home batteries typically cost over $10,000 installed, but in Texas customers can now lease 27 kilowatt-hours of Tesla Powerwalls for $35 a month, or 39.2 kilowatt-hours of Base Power batteries for $19. VPP operators buy electricity cheaply to charge batteries, then sell it back to the grid at a profit during peak demand, sharing savings with consumers through low bills or cheap backup power. The VPP market is currently worth $7.4 billion but is forecast to exceed $30 billion by 2033, driven by rising electricity demand from AI data centres and broader electrification, with VPPs able to be deployed in months rather than the years needed for traditional "peaker" power plants.
- Home battery leasing prices have plunged amid rising Tesla-Base Power competition
- Virtual power plants pool home batteries to mimic large power stations
- VPP market set to grow from $7.4bn to over $30bn by 2033
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Home batteries store electricity for use later, such as during a power cut or when grid electricity is expensive. They can be bought outright or leased, and their prices have fallen as battery technology and manufacturing have improved.
Tesla sells its Powerwall system, while Base Power is a newer US competitor. Both are part of a wider shift towards virtual power plants: networks that coordinate many household batteries so they can supply electricity when demand is high.
These networks can help balance the electricity grid by storing power when it is cheaper and returning it during busy periods. Their growth matters as electricity use rises, including from data centres and the shift to electric technologies; they can also be set up faster than conventional power stations.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Market competition between companies like Tesla and Base Power is driving dramatic cost reductions and rapid innovation in home batteries without requiring expensive government infrastructure investment. Private companies have strong profit incentives to improve efficiency and reduce costs quickly, making these technologies accessible to ordinary households faster than traditional regulation-driven approaches would achieve. Competitive pressure benefits consumers through lower prices and better service.
The case against
Grid infrastructure exhibits natural monopoly characteristics where competitive advantages concentrate market power over time, and once competition diminishes, companies may raise prices without meaningful constraint. Private companies prioritise profitable markets, potentially excluding rural and lower-income households from access to these technologies. Critical infrastructure affecting everyone's energy security deserves public investment and democratic oversight rather than being driven primarily by private profit motives.