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Tesla says they’ve lowered prices for home solar. Are they now the best deal?

Tesla solar panels on a roof

Last week, Tesla held its 2019 first-quarter earnings call, announcing a loss of over $700 million dollars, mostly because it sold fewer cars and home solar systems than it anticipated. Tucked in among the details of the earnings report was an interesting nugget of information for people interested in solar:

Tesla, long one of the highest-cost installers in the country, says it’s planning to lower its prices to about 15% lower than the national average.

To do this, the company says they’re “streamlining operations,” by selling systems in pre-determined sizes. Additionally, they’ll have their customers do some of the work that had been part of the normal after-sales design and engineering process.

Now we have some questions:

  • Are Tesla home solar panels the cheapest on the market?
  • How can you be sure?
  • Is all that extra work worth it for homeowners?

In case you don’t want to read the whole article below, here are the answers:

  • Tesla’s new system pricing is not the cheapest in every situation (though it may be in some).
  • In order to be sure they’re the best deal, compare multiple quotes from solar companies in your area.
  • Whether the extra work is worth it depends on the answer to the first question and your own feelings about doing it.

Let’s break it down.

Are Tesla’s solar panels the cheapest? How can you tell?

Looking at the whole residential solar industry, the cost of solar panels for your home depends on a few factors, like the state where you live, roof material and orientation, and how many panels you need. That last one is important, because generally the more solar you need, the cheaper your cost per watt of generating power.

All-in-all, the average cost of home solar panels in the US in 2019 is about $2.70 per watt for a 6.2-kW system, according to the National Renewable Energy Laboratory.

Live today on the Tesla website, you can get cost and savings estimates for their solar systems and plunk down a $99 refundable deposit to secure your place in line. Tesla has defined a “system” as a 4-kW bundle consisting of twelve 350-watt Panasonic/Tesla panels and the accompanying hardware. Helpfully, they also include a size guide that tells you how many “systems” you might need based on your average electricity bill.

Tesla solar system sizing guide

As you go through the purchase process, you can select whether you want up to four of these systems (16-kW), at a flat cost depending on your location. Here in Oregon (as of May 2, 2019), Tesla quotes a 4-kW system at $2.50 per watt, or $10,000 total, before incentives. That’s cheaper than our benchmark 6.2-kW system price above, but the thing is, it’s the same cost per watt as the 16-kW system. So if 4 kW of solar costs you $10,000, 16 kW costs $40,000.

That’s… kind of weird. If you need a larger solar system, you should get a lower price per watt, simply because adding panels to the installation doesn’t require a lot of additional labor. The same workers on the same truck just need to bring along a few extra panels and racks. If you’ve got the roof space and the electricity needs, you’ll probably get a better deal if you find a local solar installer and talk to their expert system designers.

Sub-question: can you live with less (or more) solar than you need?

Tesla’s commitment to sell solar systems in blocks of 4 kW ignores some logistical and regulatory truths. First, system sizing is generally personal to each home and homeowner, depending on usage and roof size. Second, many jurisdictions don’t allow systems sized much larger than is necessary to equal your past year’s usage.

One way to get around some of those system size requirements is to add an electric car to increase your usage of electricity… oh, we get it now! This is all part of a plan. Add the panels, add the car, heck, why not add some batteries, too! Pretty clever, Tesla.

Going back to the roof size thing: what if you have the ideal roof for a 6-kW system, or just need 50% more electricity than a 4-kW system can provide? It looks like you’re out of luck if you choose Tesla. In this case, it would probably be best to go with another installer or learn to live with two-thirds of your energy coming from solar.

Is the extra work worth it?

The New York Times reports that Tesla will ask homeowners to “photograph electric meters, circuit breaker boxes and other equipment and send the images to the company, reducing the need for site visits.” That doesn’t sound so bad. And the advantage of the process is that you can order the system in your own home, take the photos of your own home, and then just wait for the guys to show up and install the panels.

Or at least, Tesla is hoping it’s that easy. The problem is, no two homes are identical. Well… some are close.

Row Houses in Washington, DC

But we digress.

The reason for pre-installation solar site visits isn’t just to take pictures around your house. System engineers have to look at your current wiring, shingles or tiles, and roof supports, to get an exact layout for how the system will be installed to make sure there won’t be any problems with leaking or penetrations into un-supported surfaces.

Should you trust Tesla on this?

We’re concerned that with this new “book it and roll it” style of solar installation, Tesla’s customers without ideal (read: new) roofs will either have their installs delayed by unexpected issues that arise on the initial install date (because proper site visits weren’t conducted), or, worse, get systems installed improperly the first time, because of this one-size-fits-most mentality.

This is all speculation, of course, and without numerous stories of the process from a disparate group of homeowners, we can’t be sure exactly what will happen. But we also can’t be sure we can take Tesla at their word, here, because they have a history of not exactly delivering on promises.

Tesla’s history isn’t the brightest when it comes to low-cost claims

Not to kick them when they’re ($700 million) down, but years after the fact, there’s no $35k Model 3, very few actually installed Tesla solar roofs (which, by the way, will not be included in this new pricing model), and little to suggest an actual date-of-install for these new, lower-cost Tesla solar systems.

We’d love to see these systems get installed this summer without a hitch, but again, we have to caution people. To be sure you’re getting the best deal, get multiple quotes for solar, and check the math.

Furthermore, be ready to negotiate with your solar installer armed with Tesla’s pricing, and be aware that many local solar companies offer referral bonuses for existing customers that can earn you a little cash if you recommend new customers who get solar installed, too.

Finally, if Tesla can’t guarantee an install date in 2019, look elsewhere, because that 30% federal solar tax credit will be decreasing to 26% for installations starting after December 31st, 2019.

Last modified: May 2, 2019

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Justin BaileyRachel SmithKim ChristmanBen ZientaraDoris Jean Warwick Recent comment authors
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Justin Bailey
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Justin Bailey

Per Tesla rep (5/8/2019), Tesla no longer uses Panasonic panels, they’re using Hanwha panels and Delta stringer inverters. She did hesitantly suggest that a power optimizer setup may be used, but I haven’t been able to get her to respond as to what brand or if that could be guaranteed.

Rachel Smith
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Great article Ben! Tesla has overall struggled to compete effectively in panel installation in the last few quarters, and several industry trends aren’t moving in the company’s favor. Previous price cuts seem to be not working out too. If customers are required to provide measurements for their own homes, then then it would lead to bad customer experiences.

Doris Jean Warwick
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Doris Jean Warwick

Has the price of the power wall gone down? I will be needing a power storage unit soon. what can you tell me about those?

Kip C Anderson
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Kip C Anderson

I think the ‘book and roll’ model will simply more closely follow the satellite TV industry game plan, cutting bait far more quickly on projects requiring significant additional work. Not that it would stop the installation, but they would roll customers into more conventional installations that are not going to really provide the same cost advantage if any at all.

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