This article was written by Oilprice.com, the leading provider of energy news in the world. Check out these other articles.

Elon Musk and his company Tesla Motors (NASDAQ:TSLA) will revolutionize the way you drive, and while they're at it, the way electricity is priced and consumed. At least, that's the plan. Thus far under Musk, such plans have sold quite well, even if only based on future promise. Is it all hype or can Tesla change the energy game?

Musk's latest – and perhaps greatest – venture doesn't involve cars at all. Instead, Tesla has its eyes set on the home. The company plans to unveil a home battery in the next month or two with production beginning in around six months. The stationary lithium-ion batteries will operate much like those in Tesla's cars, but will instead allow homeowners and businesses to capture and store excess energy – from rooftop solar panels for example. The stored energy can then be saved for a rainy day – quite literally – or sold back to the grid to reduce electricity bills. Commercial end customers can expect savings of up to 30 percent.

Like electric vehicles, it's a niche market, but one that is rapidly expanding. As we discussed on Feb. 18th, the rapid drop in the cost of photovoltaics is leading to solar deployment beyond the means of, and in detriment to, the grid and utilities providers. Stationary batteries provide a way out and Tesla, along with Elon and family's Solar City (NASDAQ:SCTY), plan to work with utilities, putting the storage in their hands. "In this scenario, grid operators are suddenly empowered to store and discharge solar energy where and when it's needed most, smoothing out peaks and ramps,"said Solar City Chief Technology Officer (CTO) Peter Rive.

According to GTM research, the US solar-plus-storage market will surpass $1 billion by 2018 – nearly 25 times higher than its current market value. The broader, global battery storage market is expected to reach $400 billion by 2030. Price, of course, still remains a barrier to such success, but the market and Tesla are trending in the right direction. 

PriceDeclinesInLithiumIonBatteries

Source: Citi

Citi research expects the cost of lithium-ion storage will decline at roughly a 10 percent clip annually. For its part, Tesla plans to outdo that – specifically, via its $5 billion so-called Gigafactory. The factory – currently under construction in Nevada – aims to be operational in 2017 at which point production will begin. And produce it will.

The Gigafactory will cover 1,000 acres, employ 6,500 people, and, when running at full capacity, could consume up to 17 percent of the global supply of lithium. By 2020, Tesla expects to produce more lithium-ion batteries annually than were produced globally in 2013. 30 percent of the factory will be dedicated to stationary batteries, which Tesla CTO JB Straubel believes "can scale faster than automotive."

Economy of scale is the goal and Tesla hopes it can essentially halve its per-kilowatt-hour cost. It's an ambitious plan, and one with real risks – which Tesla is well on its way to addressing.

Upon its announcement, exposure to lithium markets and a lack of experience were targeted as the Gigafactory's Achilles' heel. A fairly stable market, lithium has been growing in cost on average 5 to 10 percent per annum. Lithium is still plentiful and relatively cheap to extract, but buyers – primarily in Asia – are increasingly demanding more. With delicate math and bold price targets, Tesla can ill afford strong volatility or significant competition in the lithium market. And so, as it did with its Model S, Tesla has secured a partnership with Panasonic, who will manufacture and supply lithium-ion battery cells at the Gigafactory.

The hype is real and economically competitive and widespread energy storage is on pace to change the game. Renewables suddenly become a viable substitute for baseload generation, currently dominated by coal; oil leaves the power sector; and storable electricity, on a large scale, transforms power markets into something resembling oil and gas markets. Of course, it's a transformation that will take some time, but Tesla, with a little leap of faith, has the jump.

By Colin Chilcoat of Oilprice.com. Oilprice has no position in any stocks mentioned. The Motley Fool recommends SolarCity and Tesla Motors. The Motley Fool owns shares of SolarCity and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.