Tesla’s solar roofs cost less than its cars
Tesla Inc.’s solar roof is cheaper than many expected.
The technology company began taking orders yesterday for its new product, which is part of a broader plan to be a one-stop shop for solar power, storage and clean cars (Greenwire, May 10). For months, analysts speculated whether the solar roof was a transformational concept or a gimmick, depending largely on costs.
Now, Tesla says the cost of its solar roof is $21.85 per square foot, or about $3 less than what Consumer Reports said was required for it to be cost-competitive with a regular roof.
According to Hugh Bromley, an analyst at Bloomberg New Energy Finance, an average U.S. home with a 2,300-square-foot roof could expect to pay about $50,000 for the company’s new solar roof. Before pricing information was released, Bromley had questioned whether the plan might be an “architectural gimmick.”
Instead, the cost of Tesla’s tiles producing electricity is about $20 less per square foot than expected, he said. Tesla released a calculator on its website allowing users to estimate upfront costs and how those are offset by tax credits and energy prices. It said estimated costs for the product includes materials, installation and the removal of an old roof.
“Solar Roof is more affordable than conventional roofs because in most cases, it ultimately pays for itself by reducing or eliminating a home’s electricity bill,” the company said. Because the product is made with tempered glass, it is three times stronger than standard roofing tiles, according to Tesla.
Tesla plans an initial rollout of “black glass smooth” and “textured” roofs, with two additional models available in six months. It said it plans to start pilot manufacturing of solar roof tiles in the second quarter of 2017 at its factory in Fremont, Calif. Later production will occur at Tesla’s “Gigafactory 2” in Buffalo, N.Y., in partnership with Panasonic Corp.
It remains to be seen whether Tesla will succeed in a space where other companies failed. Dow Chemical Co., for example, abandoned plans earlier this year to sell a solar shingle line, although it used a very different technology.
Bromley said he still had doubts about Tesla’s claims.
“The solar roof is cheaper than most analysts anticipated but is a long way from delivering on Musk’s claims that it would ‘cost less than a normal roof before you even take the value of electricity into account,'” he said.
It is sure to find a customer base among affluent households who are accustomed to paying a premium for aesthetics, he said.
The fact Tesla released capital costs also indicates it is pivoting away from the idea of third-party leases that created challenges for SolarCity Corp., which Tesla recently acquired, according to Bromley. Outright system sales using cash or loans are a much higher percent of SolarCity’s residential business than they were a year ago, he said.