Jim Jones 12-27-2020 - Stars 5/5
Elon Musk is developing heating ventilation and air conditioning or an HVAC product that Tesla will be making for homes—using the technology from his electric cars. This will have some bonus features and a large HEPA filter that removes toxins from the air; Tesla plans to take some of these elements and build its upcoming home HVAC system to benefit Concord, CA homes.
Let's look at the size and makeup of the current heating ventilation and air conditioning markets and how Tesla plans to disrupt the home energy space completely. According to the US energy information administration, the US average household spends about 12 percent of their entire home energy expenditures just on air conditioning. In warmer states, this number moves up to an astounding 27 percent of energy costs, that's about a third of all the energy used in a home for a year to try and keep it cool. In the US, about 60 percent of households use central AC, and 23 percent use individual AC units, so there's a huge market for both of these products. Also, five percent of households use both, for a total of just under 90 percent of the population using these types of air conditioning units.
It's estimated that the global air conditioner market size is about 78 billion dollars and is growing at around 10 percent per year in countries such as China; air conditioning hasn't been as prevalent as it is in the USA, not until the last 30 years. During that period, China has gone from nearly nothing to an astounding 60 percent of their massive population using some form of AC. China's energy needs have multiplied, with dirty coal being their primary energy source to power these electricity hogging machines.
Now consider India's population of 1.3 billion people, and it's beginning to ramp up air conditioning use. Only a meager five percent of the Indian population is currently using air conditioning. Imagine the electrical system's burden and the excess amount of power required as the number of air conditioners doubles a few times over the years. India generally has a warmer climate and will result in heavy use of air conditioners, which presents rampant challenges and opportunities to address the increased demand for a viable solution.
When Tesla develops new products, they usually have a series of goals in mind. The first and foremost is that they're looking to get rid of fossil fuels. This is in line with Tesla's mission to transition the world to clean, sustainable energy.
Secondly, Tesla strives to provide a great product that's easy to use, and sometimes if they're doing their job right, you won't even know that it's there. For example, the front airflow in the model 3 electric car is seamlessly hidden in the dash. For a home to be as integrated and hidden as possible, this concept will create a more livable space.
Third, there should be no sacrifices for going green. Eliminating the cost of fuel and reducing electricity costs has been a byproduct of Tesla's vehicles. The home will be the next frontier for which monthly operating costs will be reduced with Tesla's home products.
Fourth, better technology and higher efficiency products usually start at a higher price. When Tesla becomes more efficient in manufacturing such a product and scales up its production, which may take a couple of years, that's when even the one-time costs or the sticker prices start to come down. We're just beginning to see this for Tesla's vehicles. Not only is the cost of ownership extremely competitive with most cars, but now the sticker price is on par with most similar vehicles. Over time Tesla's other products will follow similar trends.
In addition to air conditioning, the HVAC market comprises heating systems. The Energy Information Administration estimates that 47 percent of US households use natural gas as their primary heating fuel.
The market for heating systems is gigantically estimated to be 170 billion dollars globally spent each year. At the same time, 36 percent of US households currently use electricity-based systems. In more moderate US climates, about 12 million households use electric heat pumps. Historically this approach has been used less in colder climates due to the high cost of electric heating. However, the (EIA) now states that due to recent advances in cold climate heat pump technology, it's become more practical in cold climate areas. This is precisely where Tesla's heat pump technology could come into play. Tesla has vast expertise and a large team of engineers working on efficient energy solutions for their vehicles.
Tesla's Model Y has a compact and efficient heat pump, which has allowed for increased vehicle range thanks to its high efficiency. Even in cold climates, Tesla's solution, known as the octave valve, is installed in a vehicle's central location, controlling heating and cooling for the passengers, the battery, and the motor. For example, the heat pump can pull heat from the motor and transfer it to the vehicle cabin; this is essentially what a heat pump does. It transfers heat from one place to another. Tesla's compact solution effectively ensures that heat sources efficiently distribute their energy to where it's needed. When they adopt this technology for homes, this will improve heating and cooling effectiveness while reducing costs and be extremely reliable.