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You would not use a laptop-style lithium battery for battery backup for your home. You would use LFP. It does not have the burst-into-flame problem you are thinking of.

At some point I expect we will look back at the era when we used really flammable electrolytes and laugh about how wild that was. I bet we are not that far from it being just a memory.

PowerWalls use NMC cells. And the majority of "diy powerwall" builds are reclaimed 18650 cells.

There's been a rumor for a while that Powerwall 3 is LFP, but I don't think anyone has actual confirmation on that.

I've seen occasional 18650 builds for DIY powerwalls but the vast majority are using prismatic LFP cells. Way easier to wire up, cheaper (unless you have a secret source for surplus 18650s), and minimal fire risk.

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