Japanese carmaker Nissan will begin manufacturing batteries for home energy storage, putting the company directly in competition rival carmaker Tesla. They will offer new batteries, as well as a more affordable option made from used electric car batteries. The battery cells will be produced in Sunderland in the UK, where the company makes its Leaf electric car. They will be sold in a partnership with Eaton, a US power firm. The batteries are considered the first British made household batteries targeting the UK home energy storage market.

While they will be produced in Sunderland, the batteries will be assembled in Morocco.

Increasingly affordable, home energy storage is on the rise in the UK, where 850,000 homes have solar panels installed. Batteries allow solar power uses to store the energy for later use, which Eaton and Nissan estimate will save customers about £43 each month. Storing energy also allows homeowners to benefit from “time of day” energy deals, which saves money for customers who avoid times with peak energy demand, such as 4-7pm on weekdays. Such deals are likely to become more common, with plans to install a smart meter in every UK home by 2020.

The batteries will start at £5,000 or more, with installations available by a nationwide network starting in July. New batteries will come with a 10-year warranty, while those manufactured from used car batteries will come with a 5-year warranty.

Cyrille Brisson, a vice president at Eaton, explained:

“We’re clearly going into this market with a view to becoming the leader of the market, with the weight of Nissan and its factory in Sunderland, and with Eaton’s very strong base of installers. We believe we have the knowledge and capacity.”

The new venture will be competing with Tesla’s Powerwall energy storage options, already installed throughout the UK after a high profile launch by Elon Musk. The next generation of Powerwall systems is set to launch in the UK later this month after an initial delay. The Powerwall 2 will cost £5,400.

Though Tesla has a head start and greater name recognition, Nissan and Eaton hope to compete by touting the benefits of reusing older batteries and producing the units in Britain.

A report published Thursday, from renewable power buyer SmartestEnergy said entrepreneurs were moving into the commercial battery sector as a reaction to cuts in government subsidies. They found there were 20 MW of commercial batteries operating in 2016, and predicted a 27 fold increase by 2020.

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