Tesla’s Elon Musk has been saying for years that he wants to totally transform the way we generate, deliver and consume electricity. Though best known for its sexy electric vehicles, his company’s battery technology is now making its way into homes, businesses, and utilities.

The Irvine Company, a large California real estate developer, and San Francisco-based Advanced Microgrid Solutions announced that they plan to create a fleet of hybrid-electric buildings powered by Tesla’s energy storage systems.

The portfolio-wide program is aimed at reducing peak-energy consumption from local utilities while reducing electricity costs and providing back-up power during grid outages.

Large battery systems at each building — which take up the equivalent of about five parking spaces — will be charged during nonpeak hours and be used, when needed, for peak daytime use or in the event of a power failure.

Energy storage is a game-changer. It will allow building owners to participate in grid support and reduce costs while causing no disruption or discomfort to our customers, residents or guests.Click To TweetThe first phase of the project, which will include up to 24 office buildings in Irvine, is expected to reduce peak demand in those buildings by 25% and provide Southern California Edison with up to 10 megawatts of reserve capacity, enough to supply power to 10,000 homes. The first energy storage units are expected to be installed by the end of this year.

Rich Bluth, Irvine Company’s vice president of Energy Management, said: “Energy storage is a game-changer. It will allow building owners to participate in grid support and reduce costs while causing no disruption or discomfort to our customers, residents or guests.”

For the initial part of the project, Advanced Microgrid Solutions will team with renewable energy giant SunEdison to finance, install and operate Powerpack commercial battery systems including seamlessly switching the buildings to battery power whenever Edison signals that demand on the grid is too high.

Tesla’s has also started pilot programs with some of America’s biggest retailers including Amazon and Target. Amazon is using the Powerpacks at a Northern California facility and Target is using them at select stores to relieve stress on the electrical grid.