Tesla Powerwall 3 Adds Heat Pump Optimization to Store Cheap Solar
The Europe-only feature uses SG-Ready wiring to boost hot water heating during surplus solar or low-price grid hours.
Tesla has launched Heat Pump Optimization, a software feature for the Powerwall 3 and three-phase Powerwall 3P that coordinates with compatible heat pumps to store surplus solar energy as hot water. The update is currently available only in Europe, leveraging physical wiring standards rather than cloud integration.
What Happened
The feature allows the Powerwall to send one of two signals to a connected heat pump: run normally or boost. When instructed to boost, the heat pump heats water beyond immediate household needs, typically storing it in a domestic hot water or buffer tank. This stored thermal energy is then used to power the home during expensive peak hours, reducing the need for the heat pump to run when grid electricity costs are high. In Self-Powered mode, boosting occurs only when surplus solar remains after covering other home loads. In Savings mode, it triggers when solar is available or when grid power prices hit their lowest point based on 24-hour tariff forecasts.
The system relies on SG-Ready (Smart Grid Ready) certification, a standard introduced by the German Heat Pump Association in 2012. This requires physical wiring between the Powerwall and the heat pump, installed by a Tesla-certified installer. Specific requirements include Powerwall 3 or 3P hardware on firmware 26.26 or later, an SG-Ready-certified heat pump with an accessible SG-2 contact, and Tesla app version 4.59.1 or later. Tesla notes that these signals are recommendations and can be overridden by the heat pump’s own thermostat settings. Additionally, the feature does not have an on/off toggle in the Tesla app; once wired, it is always active. During power outages, the system reverts to normal operation to prioritize backup loads.
Why It Matters
This feature effectively turns a home’s existing hot water tank into a low-cost thermal battery, preserving the Powerwall’s lithium capacity for non-thermal loads. A 300-liter tank heated by an extra 30°C can store approximately 10.5 kWh of thermal energy. With a heat pump operating at a Coefficient of Performance (COP) of 3, storing this heat requires only about 3.5 kWh of electricity. This allows the Powerwall’s 13.5 kWh capacity to remain available for other critical applications. The move follows a trend in the European market, where competitors like sonnen have offered similar software updates since 2023, and SG-Ready control has been a standard feature in German PV energy managers for years.
The European market context is significant for Tesla’s strategy. Germany sold 299,000 heating heat pumps in 2025, a 55% year-over-year increase according to the German Heat Pump Association (BWP), accounting for nearly half of all new heating systems sold. Tesla’s decision to launch this feature in Europe first aligns with its earlier introduction of the Powerwall 3P, which was targeted at Germany, Austria, and Switzerland. Tesla has not announced plans to bring Heat Pump Optimization to the US or Canada, partly because the SG-Ready hardware standard is not widely adopted in North America.
The Bottom Line
Tesla’s Heat Pump Optimization enhances the value of its European installed base by utilizing thermal storage to manage energy costs without adding hardware. The feature is restricted to Europe due to reliance on SG-Ready wiring standards and is currently unavailable in North America.
