Tesla wins energy storage contract with California utility

A Tesla logo hangs on a building outside of a Tesla dealership in New York, U.S., April 29, 2016. REUTERS/Lucas Jackson/File Photo

(Reuters) - Tesla Motors Inc said on Thursday it won a contract to provide a 20-megawatt energy storage system at a substation owned by California utility Southern California Edison Co SCE_pe.A.

The deal is part of Tesla’s effort to expand its business beyond electric vehicles into supplying batteries to store energy for homes, businesses and utilities.

The system, which will be one of the largest lithium ion battery storage projects in the world when completed, will be able to hold enough electricity to power 2,500 homes, Tesla said in a blog post on its website.

The project will be located at the utility’s Mira Loma substation in Ontario, California. Southern California Edison is a unit of Edison International.

Southern California officials were not immediately available for comment.

Reporting by Nichola Groom in Los Angeles; Editing by Matthew Lewis