Considering a Tesla Powerwall? The Pros and Cons of the Powerwall 2 vs. Powerwall 3

The Tesla Powerwall 2 has been the most popular home battery on the market for years now. The release of the new Powerwall 3 battery means the Powerwall 2's reign of terror is coming to an end, but the Powerwall 2 hasn't become completely obsolete. 

Tesla hasn't made any announcements yet about the Powerwall 2's fate, but our guess is that it won't be discontinued anytime soon. Powerwall 3 and Powerwall 2 can't be installed together, so if you already have an existing Powerwall system and need a capacity upgrade, you'll have to purchase another Powerwall 2 battery. If you don't have an existing Powerwall system, the Powerwall 3 is the better option. 

Both batteries have the same 13.5 kWh capacity and come packaged with the same warranty. The Powerwall 3 has twice the power output of its predecessor and comes with an integrated inverter. It does cost a bit more than the Powerwall 2.

We matched these two generations of batteries against each other. Here are the key differences.

Capacity and modularity 

Both Powerwall models are pretty similar in this category. They both store up to 13.5 kWh, which is a common size among home batteries. These batteries don't feature a modular design either, meaning you're locked in at one capacity option per battery. If you need more than 13.5 kWh, you'll have to buy another Powerwall. 

The amount of batteries you install depends on the Powerwall model you're getting. You can install up to four Powerwall 3 batteries for a total energy storage capacity of 54 kWh. Or you can install up to 10 Powerwall 2 batteries for 135 kWh. That's a heck of a lot of capacity. And while the Tesla Powerwall 2 is technically more "stackable" in its capacity than the Powerwall 3, the odds of your home's energy storage needs exceeding even five of these batteries is highly unlikely. The average American home uses somewhere around 30 kWh per day. Your home might not be average though.

Performance and efficiency 

There are three specs we look at for this category: round-trip efficiency, depth of discharge and power output. One of the Powerwall 3's biggest improvements is in the power department. A battery's power output is the amount of power it's able to handle at a given moment. It directly correlates with the number and size of the appliances it can back up. The Powerwall 3 has a continuous power output of 11.5 kW. This is more than twice the continuous output of Powerwall 2 (5 kW), and Powerwall 3 is also more powerful than most of the home batteries we've seen on the market. 

Round-trip efficiency is a measure of how much energy moves in and out of storage without getting lost in the process, usually as heat. Both Powerwall models have typical round-trip efficiency ratings. Powerwall 3 is 89% and Powerwall 2 is only slightly higher at 90%. It's nothing to split hairs over. 

Lastly, we get to depth of discharge. Put simply, depth of discharge is the percentage of your battery's capacity that you're actually able to use relative to its maximum amount. Both Powerwall batteries have a 100% depth of discharge. You can't do better.

Warranty

There's not much competition in this category. Both batteries have the same warranty, so you're not missing out on better coverage with one or the other. Tesla offers one of the better warranties we've seen for home batteries. Here's what you get.

The 10-year coverage is nothing to get excited about. That's the industry standard. The capacity guarantee here is standard as well. Because your battery's overall capacity deteriorates over time, manufacturers will guarantee that your battery will still retain up to a certain amount of its original capacity by the time your warranty expires. In this case, Tesla guarantees that your Powerwall will retain up to 70% of its original capacity after 10 years. But again, this is very standard. 

What you should be excited about is the unlimited cycle coverage. Battery cycles are one of the ways manufacturers measure the lifespan of the battery. Every time your battery charges and discharges, it completes a cycle. The amount of cycles the manufacturer guarantees it will complete is its cycle life. In most cases, once you've cycled your battery beyond its designated cycle life, your warranty will end, even if you still have a few years of coverage left. Unlimited cycles means there's no limit on how much or how often you use your battery. 

Price

Both Powerwall models are actually on the cheaper side for what you're getting. The Powerwall 3 currently costs around $9,300. This includes the gateway and other accessories, but does not include the cost of installation. The Powerwall 2 goes for a bit cheaper, at around $8,100 to $8,400. Expect to pay between $2,000 and $3,000 for the installation.

Powerwall 2 is the budget pick here, but it's still not a bad battery. And even though the Powerwall 2 wins this category for its cheaper price, the Powerwall 3 is a pretty good deal too. You're getting the same 13.5 kWh capacity with both batteries, and Powerwall 3 has double the power output and a fully integrated solar inverter. You should also consider the fact that we don't know if or when Tesla will phase out the Powerwall 2. Keep in mind that these systems aren't compatible with one another. You can't mix and match.    

Which battery is better?

In the case of the Powerwalls, newer does indeed mean better. We found the Tesla Powerwall 3 to be the better deal, mainly due to its significantly higher power capabilities, integrated hybrid inverter and overall fair price. That doesn't make the Powerwall 2 a horrible battery. Like other home batteries on the market, it's just starting to show its age a bit. There's also the concern of if and when Tesla will discontinue Powerwall 2 production, which is inevitable with older battery models. Both batteries come with the same warranty too, so you're not missing out there. 

If price is a serious concern, you should be able to get the Powerwall 2 for around a thousand dollars cheaper than the Powerwall 3. Powerwall 2 is also a better option if your energy needs exceed 54 kWh. But again, this is pretty unlikely. 

Much like with any other battery, the best battery for your home is one that fits within your household's specific energy needs and budget. We recommend looking at a few other options besides the Powerwall and getting quotes from several installers in your area before making a final decision. This could end up saving you thousands in the long run.