Understanding my Tesla Energy System

This is part two of five in a series of posts about my Tesla Energy system and my understanding of how the system works.

In this post, I share my understanding of the components of my system, what they do, and how they work together.

Before you read on, I suggest you read part one, Home Electricity Fundamentals, as I think it will be very helpful to understand some fundamentals about how electrical energy flows. I also refer here to an analogical pneumatic system that I establish there.

Also, I am not an electrician nor a solar/energy professional. Take my information with a grain of salt. Much of it is based on internet research, opening up electrical boxes and tracing wiring, and some experimentation. There are likely things that I’m wrong about (if you know better, please let me know)!

The Five Parts
  1. Home Electricity Fundamentals
  2. 👉 Understanding my Tesla Energy System
  3. FAQs about Tesla Energy systems
  4. A look at the production and finances of my Tesla Energy system
  5. More than one (or larger) battery?

Also, check out Our Electrification Journey for more about what we’ve electrified (which includes our heat pump water heater and range).

Major Components

Load Center

This is where everything comes together: PV, Battery, Home, and Grid (via the Tesla Gateway).

Using the pneumatic system analogy (of the previous post), this is simply a chamber where everything is connected so air moves freely and pressure is equal throughout the system.

Photovoltaics (PVs, or “solar panels”) and Inverters

The PVs produce electricity (DC). They are wired in “strings” that feed into an inverter that converts DC into AC, which connects to the Load Center (so the energy can disperse to the Battery, Load/Home, and/or Grid.

In the pneumatic system analogy, the energy that PVs “produce” is pushing air/pressure into the system. The inverter could be something that converts the PV’s heat into air pressure (the opposite of a heat pump).


Stores solar-produced energy for usage later. This can be used to reduce or eliminate grid usage when PV production doesn’t cover usage (for financial or environmental reasons), for backup (when the grid is down), and/or to optimize grid usage based on time-of-use rates.

In some cases, the battery may charge from the grid and/or push to the grid, which can allow you to prepare for an outage (e.g., charge battery from grid before a storm), or engage in arbitrage (e.g., charge the battery from the grid — buy electricity — when rates are low, and push from the battery to the grid — sell electricity — when compensation is higher) but this can be subject to policy complexities.

Main Service Panel, Grid

The Main Service Panel, “MSP” (aka Main Panel), is where your home is connected to your electric utility, or “grid,” and is where the meter is that measures how much energy is flowing into or out of your home.

In the simplest setups, the electricity flows from the grid, through the meter, and is then split to the various circuits of your home.

With a Tesla system, usually the only thing wired to the MSP is the Backup Gateway. If possible, all circuits are moved to the Backup Gateway or to the Load Center attached to the Backup Gateway. If circuits remain on the MSP, the Backup Gateway can’t see what energy is being consumed on it and thus won’t be able to power those with the battery even while the grid is on (more on this in “Non-Backup Load” below).

Load / Home

Consumes energy. The consumed energy can be from any combination of solar, battery, and grid (usually in that order).

In my case, most of my home’s loads are connected to a subpanel, which is connected to the Load Center.

Non-Backup Load

Loads can also be connected on the “outside” of the Tesla Gateway. When the Gateway disconnects the “inside” from the grid, the not-backed-up loads are still connected to the grid.

The Gateway automatically disconnects the “inside” from the “outside” when the grid is not providing energy (this prevents energy from flowing from the PVs and/or Battery to the grid, which can be dangerous). This means that the not-backed up loads do not have energy.

However, if the Gateway disconnects the inside from the outside while the grid is active (if the customer decides to do so; unusual), the not-backed-up loads can still receive energy from the grid.

Not-backed-up loads can be either wired to the Backup Gateway or to the Main Service Panel.

  • When attached to the Backup Gateway, its usage can be monitored/reported, and the Gateway can direct the Battery to push enough energy to power those loads.
    • That is, under nominal operation (grid is active and the “inside” and “outside” are connected), not-backed-up loads are treated identically to backed-up-loads.
      • The main benefit of this is to allow loads that are too much to be backed-up to still be provided battery-supplied energy when grid-connected (but there isn’t sufficient PV energy; namely, when the sun is down).
    • Using the pneumatic system analogy: as long as the PV and Battery are pushing the same amount of air into the network as are being consumed (by backed-up and not-backed-up loads), then no net air flows to/from the grid.
  • If attached to the main service panel, then the Gateway is unaware of its consumption.
    • If the PVs are producing a surplus (to the backed-up load and to the not-backed-up load attached to the gateway), the…
      • The surplus is first “consumed” (stored) by the battery. This means that the battery will be charged while the MSP-attached loads are powered by the grid!
      • If there’s still surplus (after the battery is full), then that can be consumed by the MSP-attached load. This usage is not seen in Tesla reporting or app!
      • Any surplus after that goes to the grid.
    • If the PVs are not producing a surplus, and the battery is providing energy, the battery will only provide enough to power the backed-up load and the not-backed-up load attached to the Gateway. So, the MSP-attached load will use grid energy!

June 2024 Update: I’ve learned that Tesla can install CTs installed between the utility meter and main switch

This would allow the Tesla system to be aware of loads on the main panel so that they can be powered by our Powerwalls during normal (connected to active grid) operation and show up in monitoring/reporting.

I’ve reached out to them to get such CTs installed. This would make it substantially easier to add new non-backed-up loads (because they could be attached to the existing main service panel; otherwise I’d have to get a sub-panel installed, dedicated to not-backed-up loads, off of the Backup Gateway).

Tesla Backup Gateway

The Tesla Gateway has two major active abilities/roles:

1. Disconnect from the grid

It can sever the connection between the Load Center (PV, Battery, and Load/Home) and the Grid.

It generally does this when the power (grid) is out, preventing your electricity (from PV or battery) from flowing into the grid, which could be dangerous (technicians handling wires and components that should not be live because the grid is off).

If you don’t have a battery, this is the only active role it has.

2. Controlling the battery

If you have a battery, the gateway also tells the battery whether — and how much — to charge or discharge, or sit idle.

It generally (varies depending on settings) tells the battery to:

  • Charge (energy in) when the PVs are producing more power than is being used (by the Load/Home). This usually results in no energy flowing to/from the grid (unless the PV is providing more than the load and more than the battery is capable of accepting for charge rate).
  • Provide energy (energy out) when PVs are not producing enough power (for the Load/Home).
    • If the battery is able to output enough to meet the needs of the load, it provides just enough and there’s no energy flowing to/from the grid.
    • If the load is higher than PV and the battery are capable of providing, then energy will also be used from the grid.
  • Be idle. This is when…
    • …the battery is full and the PVs are producing more power than is being used (by the Load/Home). The PVs surplus energy is pushed to the grid.
    • …the battery level is below the reserve setting and the PVs are not producing enough power (for the Load/Home), then energy is taken from the grid.

The Tesla Gateway also reports data to Tesla, which is available through the Tesla app.

Energy Flow States

So, there are generally six common states, and about a half dozen less common states:

  1. PV ⇒ Home + Battery: PV producing more than home usage, so surplus goes to battery
  2. PV ⇒ Home + Grid: PV producing more than home usage, and battery is full, so surplus goes to grid
  3. PV + Battery ⇒ Home: PV not producing enough for home, so battery helps
  4. PV + Grid ⇒ Home: PV not producing enough for home, and battery is below reserve level, so grid helps
  5. Battery ⇒ Home: PV not producing (e.g., night), so battery (above reserve) powers home.
  6. Grid ⇒ Home: PV not producing (e.g., night), and battery is below reserve, so grid provides energy.

Less common states

  1. Battery + Grid (and optionally + Solar) ⇒ Home: Home using more than the battery (and possibly with solar) can provide, so grid is used to help. How common this is depends on usage (e.g., how much high-draw is occuring) and how much energy the battery(ies) can provide (how many Powerwalls you have).
  2. PV + Grid ⇒ Battery + Home: Battery is below reserve, so it’s being charged. PV production isn’t enough to meet the needs of the home and charge the battery, so grid is used to help (or fully) power the home. The only time battery should be below reserve is after an outage, or changing the reserve level to higher than the currently amount of stored energy.
    1. If the battery were at or above reserve, then PV would only charge it if there’s excess PV after home usage (#1), or battery would help power the home if there wasn’t enough PV (#3).
  3. PV ⇒ Home: Since PV production and Home consumption are always varying, production and consumption will only ever be equal for moments at a time.
    1. The only time PV production is only going to the Home, and the Home is only powered by PV for a sustained period of time is when off-grid and the battery is full (i.e., there’s nowhere for the surplus energy to go).
  4. PV ⇒ Battery only: Rare for most homes to have zero consumption.
  5. PV ⇒ Grid only: Battery is full, and home has zero consumption.
  6. PV ⇒ Battery + Grid (with or without home consumption): PV would have to produce more than Battery is capable of accepting for charging.
  7. Battery ⇒ Grid (with or without home consumption): If compensation rates vary and you configure to maximize compensation, including during special events; “Tesla virtual power plant”
  8. Grid ⇒ Battery: “Grid charging may have tax implications or may be restricted by your utility. Confirm with a tax professional and your installer before enabling.”
  9. PV + Battery ⇒ Grid: There’s no reason for the battery to be pushing if it means pushing more than is needed by the Home, and thus to the grid (except in situations such as Virtual Power Plant).


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