Tesla has introduced the Heat Pump Optimization feature, which allows Powerwall 3 and three-phase Powerwall 3P compatible heat pumps to determine when to increase their operating intensity, thereby enabling households to store cheap or excess solar energy in the form of hot water.

This feature is currently only available in Europe. Tesla has not indicated whether it will bring it to the United States or Canada, and the hardware standards on which it relies are virtually non-existent on the other side of the Atlantic Ocean.

How does Tesla's Heat Pump Optimization work?

According to the instructions on Tesla's support page, Powerwall monitors electricity prices and solar power generation throughout the day, and sends one of two signals to the heat pump: normal operation, or enhanced operation.

When the system issues a command to enhance operation, the heat pump heats the water to a temperature higher than what is currently required by the household, usually to the domestic hot water tank or a buffer tank. Subsequently, this stored heat can support the household during periods when electricity prices are higher, allowing the heat pump to operate less frequently.

The conditions that trigger enhanced operation depend on the operating mode of Powerwall.

Tesla Energy summarized on X last week: “Heat Pump Optimization allows your Powerwall to increase heating when there is excess solar energy or when energy prices are lower.”

Restrictions on SG-Ready

There is no cloud integration with heat pump brands here; it relies on a single cable.

This feature is based on the SG-Ready ( Smart Grid Ready ) standard. This standard was jointly introduced in 2012 by the German Heat Pump Association BWP and 17 manufacturers. It communicates four operating states through two relay contacts on the heat pump, ranging from grid limitations to forced startup. Here at Tesla, only two recommendations are used: "Normal" and "Enhanced".

Tesla's requirements are quite specific:

• Powerwall 3 or Powerwall 3P with firmware version 26.26 or higher
• A heat pump that has been certified through SG-Ready, is equipped with accessible SG-2 contacts, and has been configured to receive external signals.
• The physical wiring between Powerwall and the heat pump is installed and debugged by Tesla-certified installers.
• Tesla App Version 4.59.1 or higher

Strangely enough, Tesla App does not have a switch button. Once the wiring is completed, this feature will be automatically enabled.

Why is the hot water tank a cheap “battery”?

What's really interesting is the calculation method of this scheme. A 300-liter hot water tank, if heated an additional 30 degrees Celsius, can store approximately 10.5 kilowatt-hours of thermal energy. With a heat pump COP of 3, only about 3.5 kilowatt-hours of electricity are needed to store this amount of heat.

Therefore, many European heat pump households, which already have hot water tanks, can absorb a large amount of solar energy during midday without having to use the lithium batteries in the garage. In this way, the 13.5 kilowatt-hour capacity of Powerwall can be reserved for those electrical needs that cannot be stored in the form of thermal energy.

The market scale is also considerable. According to the data from BWP, in 2025, Germany sold 299,000 heating heat pumps, a year-on-year increase of 55%, and for the first time, they accounted for nearly half of all new heating system sales in that country.

Tesla is not either early in this regard. In 2023, Tesla launched a software update that allowed its vehicles to use excess solar energy to power heat pumps. Initially, only certain models were supported, but over the years, heat pump control has become a standard feature of German photovoltaic energy managers.

Views of Electrek

This is a smart and low-cost feature, and it is also a design that can enhance the value of household batteries without adding any additional cells.

In cold climates, the largest energy consumption for most households is heating, while water is almost the cheapest medium for storing energy. It is more reasonable to use battery-controlled logic to operate heat pumps when solar energy and electricity prices are favorable, rather than discharging at 6 p.m. to power the compressor.

Household batteries are changing the economics of residential energy, and combining them with smart loads such as solar power and heat pumps is the best way to maximize their value. With electricity prices rising by nearly 10% last year and expected to continue to climb, installing solar power is one of the best ways to offset these increasing costs. Through leasing and PPA programs, you can even get started with zero down payment and start saving money immediately. If you want to find the most suitable option, you can check out EnergySage. This service is free, and hundreds of vetted installers will compete to provide you with quotes, so you can usually save 20% to 30% compared to searching on your own. There will be no sales calls before you choose an installer. Click here to get a free quote.

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