Tesla’s Solar Roof Sets Musk’s Grand Unification Into Motion

“What is the future that we should have? What do we think the world should look like?”
From

Tesla's Solar Roof Is Cheaper Than Expected

Tesla has begun taking orders for its transformative new solar roof. The pricing is competitive, and it marks the final piece in Elon Musk’s vision for a grand unification of his clean-energy ambitions—combining solar power, home batteries, and electric cars. 

“These are really the three legs of the stool for a sustainable energy future,” Musk said. “Solar power going to a stationary battery pack so you have power at night, and then charging an electric vehicle … you can scale that to all the world’s demand.”

Tesla opened up its online store and began taking $1,000 deposits for two of four options unveiled in October: a smooth black glass and textured-glass roof tiles. From most viewing angles, the slick shingles look like standard roof materials, but they allow light to pass through from above onto a solar cell embedded beneath the tempered surface. The first installations will begin in the U.S. in June, though orders are being accepted from countries around the world for 2018. 

These things produce electricity

Source Tesla

The cost of Tesla’s solar roof is critical for determining whether it will be a niche product for the wealthy or the key to unlocking a residential solar market that has been slowing in the U.S. The pricing unveiled Wednesday was less than many analysts were expecting, including at Bloomberg New Energy Finance and Consumer Reports. When taking into account the energy savings and lifetime cost of ownership (Tesla guarantees it will outlast your home) it’s an affordable option in many areas of the country. 

“The pricing is better than I expected, better than everyone expected,” said Hugh Bromley, a solar analyst at Bloomberg New Energy Finance who had been skeptical about the potential market impact of the new product. Tesla’s all-in cost for active solar tiles is about $42 per square foot, “significantly below” BNEF’s prior estimate of $68 per square foot, Bromley said. Inactive tiles will cost $11 per square foot, and Tesla says to expect an overall average of roughly $22 per square foot. 1 Consumer Reports calculated that it would need to be less than $24.50 per square foot in order to be a "no brainer" for the high-end roofing market.   

About That Pricing

Tesla’s solar shingles may open doors to wealthy American suburbs, where a pleasant aesthetic is often mandated and visible solar panels are sometimes prohibited. But they’re not yet for everyone. The solar roof still comes with a considerable upfront price tag. Replacing the roof of a 2,000 square-foot home in New York state—with 40 percent coverage of active solar tiles and battery backup for night-time use—would cost about $50,000 after federal tax credits. 2 The 30 percent tax credits is applied only to the active solar shingles and will phase out for residential customers beginning in 2020.  It would pay for itself with $64,000 of energy produced over 30 years, according to Tesla’s website calculator, but that requires a bigger mortgage and some long-term planning. 

People in glass houses

Source: Tesla

In this case, a Tesla solar roof is not only more expensive upfront than a traditional roof—contradicting a claim Musk made last year 3 He said on at least two occasions that the solar roof may cost less up front than a traditional roof—even before the energy savings from solar power. That doesn't appear to be true, according to Tesla's online calculator.  —but it’s potentially more expensive upfront than a traditional roof with solar panels on top, too. That’s because a Tesla solar roof may require more square feet of active solar generation to satisfy the same energy needs as traditional solar panels. Even though the Panasonic solar cells Tesla uses are some of the best in the industry, they must be spaced further apart than on traditional panels to account for the edges of each shingle, BNEF’s Bromley said. 4 Typical solar installations are closer to 20 percent of the roof surface area. Tesla's tiles may require significantly more coverage area to achieve the same energy production. A 40 percent coverage area is used in the example above.  Tesla didn’t disclose the electricity output per square foot or the price per watt of power capacity. 

All told, Bromley figured, a traditional solar setup might be 30 percent cheaper than the Tesla roof. But Tesla’s will look better and come with a lifetime warranty, whereas normal roofs are typically replaced every few decades. “A 30 percent premium could well be acceptable,” Bromley said, especially for eager customers like Tesla’s car-buyers who are willing to pay $35,000 for a base version of its upcoming Model 3.

An Apple Store for Solar 

Tesla has been adopting an Apple Store strategy for solar power since acquiring SolarCity Corp. last year for $2 billion. The idea is to cut down on the high price associated with actively identifying new customers, and instead attract them passively through its upscale auto stores in shopping malls and other high-traffic locations. Initial trials found the new approach was 50 to 100 percent more effective than at the best non-Tesla locations selling SolarCity products. Tesla has already halted SolarCity’s door-to-door sales, and over the next six months more than 70 stores will be staffed for solar sales.

Tesla's first two solar shingles
Source: Tesla

Production of the tiles will begin at Tesla’s Fremont solar plant in California and then shift this summer to its new factory in Buffalo, New York, with additional investments from Tesla’s partner, Panasonic. Musk said initial sales will be limited by manufacturing capacity. As production ramps up into 2018, sales will begin in the UK, Australia, and other locations, along with the introduction of sculpted terracotta and slate versions of the solar roof. 

The tempered glass in Tesla’s tiles is designed to conform to the toughest durability standards for both roofs and solar products, according to Tesla. The roof itself is guaranteed to outlast your home, while the power production of the solar cells is covered under a 30 year warranty, according to the company’s website. Glass, as Musk likes to point out, has a “quasi-infinite” lifetime, though the underlying solar cell will degrade over time. 

Among other tests, the company shot the tiles with a hail cannon. The video below compares Tesla’s solar tile (left) with traditional commercial slate and terracotta tiles. Each 2-inch hailstone is traveling at 110 miles per hour at the time of impact. 

Shots Fired—From a Hail Cannon

Test video for the highest FM 4473 hail rating, filmed at 2,500 frames per second.

Tesla

Tesla’s basic premise is to make solar ownership more attractive and affordable by eliminating the need to install both a roof and solar panels. Tesla will manage the entire process of solar roof installation, including removal of existing roofs, design, permits, installation, and maintenance. The company estimates that each installation will take about a week.

“What is the future that we should have?” Musk asked on a call with reporters. “What do we think the world should look like?”

In the future, he declares, every rooftop should be beautiful, and they all should produce electricity. The pricing must come down further to make that vision a reality. But it’s not so far off, and the price of both batteries and solar cells continues to plummet as those industries scale up globally. If these new solar roof prices are simply Tesla’s opening bid to its early adopters, glass solar shingles may indeed be the asphalt of tomorrow.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE