Tesla Powerwall 3 changes the game for DNO

When you install a solar and/or battery system with an inverter output over 3.68 kW, you will need to apply for and gain permission from your local Distribution Network Operator (DNO).

If you’re installing your system with Spirit, this is handled by us. When we apply on our customers behalf, we always apply for the maximum they could need. That way, if they choose to increase the size of the installation, it’s already good to go, and we don’t need to waste any time gaining DNO approval again.

Once the DNO has been applied for, it can come back either approved, approved but with conditions imposed, or denied, which is very uncommon.

In the UK, you’ll always be able to install a minimum of 3.68 kW per phase without permission from the DNO.

With the increasing uptake of solar, it’s becoming more and more common for DNO applications to come back approved for a lower amount than what was applied for.

This is because your local grid infrastructure, which will be shared by your street, surrounding streets, or neighbourhood, has a limited capacity. As your neighbours install solar more and more with their own DNO applications, more of the capacity is consumed. This leaves less for future applications.

Before, if you applied for 10 kW of inverter output, it would be approved and eat into the possible capacity for future installs. For simplicity sake, let’s say your local grid infrastructure has 55 kW of capacity (it is usually a lot higher than this and less of a round number).

But now, lately, because the grid has not been upgraded at the same rate that new DNO applications have been made, the capacity has dwindled. As you can see below, if you applied for 10 kW now, you couldn’t get approved for it because there simply isn't 10 kW of spare grid capacity, only 5 kW.

This ordinarily would mean you would have to either downgrade your system or pay out of pocket for the grid to be upgraded in your area. This is typically in the thousands of pounds; however, it depends on what needs upgrading. If a 1-kilometre cable needs to be replaced, that’s going to be costly. If a 5-metre cable needs replacing, then it may be worth doing.

As mentioned, this has become an increasingly substantial problem. However, with Tesla Powerwall 3, this is dramatically mitigated. The hybrid inverter integrated into Powerwall 3 has a wide range of approved inverter ratings. As seen here:

The benefit of this is that if you’re in the situation presented earlier, of only being about to install 5 kW of your desired capacity, not the full 10 kW, you could simply have your installer downrate the Powerwalls’ inverter to 5 kW, which is as easy as a simple toggle on the setup portal.

It’s very uncommon for an inverter, whether string, battery, or hybrid, to be rated at multiple outputs. The only other notable example is Powerwall 3’s predecessor, Powerwall 2, which has a battery inverter rated at both 5 kW, its maximum output, and 3.68 kW, to mitigate the necessity of a full DNO application.

The downsides are usually minimal. It will mean that you won’t be able to sell electricity back to the grid at the same speed; however, it would instead be put into the Powerwall’s battery, which charges at a rate of 5 kW per unit. It can then be used or sold back to the grid later. This is all automated by Tesla’s algorithms, which integrate with your energy supplier (if you’re on Octopus) and understand your usage patterns, taking in all the data, minimising your energy costs, and maximising the money you make selling back to the grid.

Previously, with Powerwall 2, because it was AC-coupled, when you added it to a solar system, you always had to add an extra 3.68, or 5 kW, to the DNO application. This is because the battery inverter was separate from the solar inverter. Whereas, with Powerwall 3, the solar and battery inverters are combined into one. The advantage of this is that it separates the DC side and the AC side of your energy better, which is obviously vague and confusing. When a system has a DC-coupled inverter, i.e., a hybrid inverter, the solar panels and battery system are both on one ‘side’ of the inverter. This leads to improved efficiency through less inverting from AC to DC and vice versa. Additionally, it means that when sending energy back to the grid, they can combine and go through one route. This one route is lower in kW than if there were two routes, such as through two separate solar and battery inverters, but it is being used more efficiently.

The DNO only looks at what comes after your generation metre or distribution board, so having the solar panels and battery storage both behind it means that you can have more power running between your solar and battery, plus you can more efficiently and effectively output energy back to the grid.

An additional DNO benefit to Powerwall 3, over some of its competitors and predecessors, is that it is expandable down the line without having to do an additional DNO application. For example, if you had a Powerwall 2 and wanted a second one, you would need to apply for permission from the DNO because you’re adding either another 3.68 kW or 5 kW to your overall output. Powerwall 3 has ‘Expansion Packs’ (coming in 2025), which simply add another 13.5 kWh of capacity to the battery system while using the same hybrid inverter built into the main unit.

In fact, you wouldn’t need to apply for DNO permission again until you wanted more than 54 kWh of capacity. Powerwall 3 can stack up to 3 extra expansion packs on the main unit; therefore, 4x 13.5 kWh batteries, all off of the same inverter!