The Powerwall stores electricity for solar self-consumption, time of use load shifting, and backup power.

[3] In November 2013, Tesla announced that it would build Giga Nevada, a factory to produce lithium-ion batteries.

[4][5] On April 30, 2015, the company announced that it would apply its battery technology to a home energy storage system: the Powerwall.

[9][10][11][12] By March 2016, however, Tesla had removed all references to its 10 kWh battery from the Powerwall website, as well as the company's press kit.

On April 26, during the First Quarter 2021 Financial Results call with investors, the company announced that it had been quietly shipping upgraded versions of the Powerwall 2 since November 2020, which could deliver higher amounts of power, and that the functionality would be enabled via an over-the-air software update.

Like the earlier Powerwall+ it includes an integrated solar inverter, but instead of separate solar and battery assemblies, the two are integrated into a single device, with more functional rectangular packaging that requires less wall space, aimed at easier installation and more capability in a single cabinet on the customer premises.

For Powerwall 1, Tesla used proprietary technology for packaging and cooling the cells in packs with liquid coolant.

[31][32] The Powerwall has a 92.5% round-trip efficiency when charged or discharged by a 400–450 V system at 2 kW with a temperature of 77 °F (25 °C) when the product is brand new.

[16][49][50] The National Fire Protection Association conducted two worst-case scenario tests in 2016, igniting Powerpacks to initiate thermal runaway.

[51] A May 2015 article in Forbes magazine calculated that using a Tesla Powerwall 1 model combined with solar panels in a home would cost 30 cents/kWh for electricity if a home remains connected to the grid (the article acknowledges that the Tesla battery could make economic sense in applications that are entirely off-grid).

"[52] Bloomberg[53] and Catalytic Engineering[54] also agreed that the Tesla system was most useful in places where electricity prices are high.

The Swiss bank UBS said that the Powerwall makes sense in Australia and Germany where electricity is very costly but solar panels are well distributed.