Tesla Motors Inc. (TSLA) just won a massive contract that would allow the company to help power the grid in Southern California. The victory comes after the largest natural gas leak in the history of the U.S., which may lead to power outages in the state.
The rupture, which took place in Aliso Canyon, caused a major methane gas spill and forced 8,000 residents to flee their homes.
Tesla’s Powerpacks, which are worth tens of millions of dollars, will be fully operational by the end of the year.
The company will provide Southern California Edison with 20 megawatts of power storage – enough energy to power 2,500 homes for an entire day.
According to Tesla, the system will be the world’s largest lithium ion battery storage project.
While the project itself is impressive, the speed of completion is just as – if not more – impressive. In the company’s blog post announcing the system, it said the Gigafactory’s large-scale production ability will allow the system to be manufactured, installed and running in just three months.
The system will charge up during off-peak hours and delivery electricity during peak hours to prevent blackouts.
Last month, the state of California approved two other contracts for grid-energy storage equaling 37-megawatts.
The contract fits well into Tesla CEO Elon Musk’s long-term vision for his company, in which he sees the company transforming from an electric car maker to a clean energy company. Tesla also recently purchased SolarCity Corp. (SCTY), a rooftop solar company that was founded by his cousins.
While the value of the deal has not been disclosed, a 2-megawatt battery costs $2.9 million, according to Tesla’s website.
Is now the time to buy into Tesla? According to TheStreet, yes. Technical analysis shows the stock is getting ready for a rally, and news of the contract will likely get the ball rolling sooner than expected.