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Tesla Motors, Inc.’s (TSLA - Analyst Report) batteries will be offered along with SolarCity Corporation’s (SCTY - Snapshot Report) commercial solar systems. Tesla’s batteries will be providing a backup power source to its customers and support in reducing the consumption of electricity and hence the electric bill.

Solar systems need to depend on sunlight. However, Tesla’s batteries will help the customers in times of solar blackout as well. In addition, Tesla’s batteries will provide an alternative source of energy during power cuts. The batteries will help the functioning of critical systems for several hours or for several days if it gets charged from the solar energy during the day time.

Moreover, commercial consumers have to pay charges for the entire amount of electricity they may need from the grid at any one time. This is known as demand charges in the electric industry. The solar panels and Tesla’s battery packs intend to reduce those demand charges. It is expected that the addition of Tesla’s batteries will reduce demand charges by 20%.

In today’s world, efficiency programs together with advanced appliances are helping the customers to decrease their energy consumption. Solar panels and other power sources like Tesla’s batteries are providing alternative energy sources. Eventually, this is reducing the demand charges and creating a softer market for electricity sales.

SolarCity will install Tesla’s batteries in the systems at no extra cost. Rather, the batteries will charge 20% less than the local utility's demand charges. At present, the batteries will only be available at places with high demand charges. The places include California, Massachusetts and Connecticut.

Tesla designs and manufactures electric vehicles and electric vehicle powertrain components. The company currently retains a Zacks Rank #3 (Hold). SolarCity is a provider of solar power service, monitoring and maintenance services to homeowners, businesses, schools, non-profits, and government organizations in the U.S. SolarCity presently retains a Zacks Rank #3. Elon Musk, the founder of Tesla, owns about 73% of SolarCity.

Other major automobile stocks worth considering are Daimler AG (DDAIF) and Ford Motor Co. (F - Analyst Report). Both carry a Zacks Rank #2 (Buy).

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