To much fanfare, Tesla’s Elon Musk unveiled his company’s newest creation on Wednesday – the solar roof.
Tesla’s new solar roof has the appearance of a traditional roof, with individual shingles that are embedded with solar cells. The visually-impressive roof comes in four versions: smooth or textured glass, slate, and a Tuscan-style terra cotta. They are virtually indistinguishable from a normal roof. Musk’s logic is that by building solar generation units that resemble a traditional roof, Tesla could overcome one stubborn hurdle in solar adoption – one of perceived poor aesthetics.
But no matter how attractive the solar system is, it better be price-competitive. Tesla’s solar roof, to be sure, is still for the well-to-do. Bloomberg estimates that outfitting a 2,000 square foot house in New York with Tesla’s solar roof would cost about $50,000. And that only assumes covering 40 percent of the roof.
But that would include another pillar of Tesla’s growing energy portfolio – the home battery storage device called the Powerwall. The solar roof will charge up the battery during the day so that the house can run on the stored energy during nighttime. The Powerwall itself sells for $7,000 but is included in that $50,000 example.
While the figures seem large, Tesla argues that it can outcompete its peers on price. “The pricing is better than I expected, better than everyone expected,” said Hugh Bromley, a solar analyst at Bloomberg New Energy Finance. BNEF predicted that Tesla’s solar roof would cost $68 per square foot, but the company revealed that it will actually cost just $42 per square foot.
More importantly, the solar roof is cheaper than a conventional roof fitted out with more traditional solar panels, so the aesthetically-pleasing shingle part of the system apparently does not make Tesla’s product more expensive than regular solar panels.
Also, the solar shingles are much more durable than traditional shingles, and Tesla is raising some eyebrows with its lifetime warranty. That is quite an improvement over the average roof, which needs to be replaced over time.
Furthermore, combined with tax credits, the energy generated from the solar roof would save $64,000 over 30 years. So, Musk makes the case that you can have solar plus battery storage that is not only cheaper than conventional solar but actually cheaper than traditional electricity from the grid. The difference in upfront cost is still quite large, leaving it out of reach for those without high incomes, but over time Tesla’s energy package is more cost-effective.
The solar roof and the Powerwall will combine with Tesla’s electric vehicles to create what Musk argues is a complete package for everyone to shift to clean energy. “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.”
Reflecting its status as an increasingly vertically-integrated clean energy company, Bloomberg points out that Tesla is revamping its sales strategy. Instead of doing door-to-door sales for its solar roof, Tesla is moving its solar roofing sales into its EV car stores. Someone willing to plunk down $35,000 for an electric vehicle is also somebody that might be interested in a $50,000 solar roof. Predictably, the strategy is 50 to 100 percent more effective, based on the company’s early results.
And that is why Musk decided to spend $2 billion to acquire SolarCity, a controversial move that transformed Tesla into a clean energy force, but also loaded up the company with a lot of debt.
Musk’s confidence notwithstanding, 2017 will shape up to be a pivotal year for Tesla. The company’s mass maker electric vehicle, the Model 3, will begin rolling off the assembly line in a few months. When unveiling the solar roof on May 10, the company also began taking $1,000 deposits for the solar roof, and installations will also begin as soon as this summer.
Tesla will be under a lot of pressure if its Model 3 and the solar roof turn out to be highly-hyped flops. But, if everything goes according to (the master) plan, 2017 could be the year in which Tesla began upending not one, but two massive energy sectors – transportation and electricity.
Nick Cunningham is a Vermont-based writer on energy and environmental issues. You can follow him on twitter.