November 14th, 2016
A couple weeks ago, Tesla’s Elon Musk unveiled a couple of new products he’s been teasing for a while: A new kind of roof tile that also contains a photovoltaic solar cell, and the Powerwall 2 home solar battery.
We’ve already spent some time and pixels covering the Tesla Powerwall, so now it’s time to look at the solar roof tiles. And while Mr. Musk didn’t give too many details about them, they’ve already proven to be the newest thing out of his mouth to launch a thousand think pieces about how much they’ll cost, and whether they’ll be a good investment.
So let’s throw one more on top, shall we?
Why are these roof tiles revolutionary?
Not all people think solar panels are beautiful. While we don’t agree with that, we don’t begrudge anyone their aesthetic preferences. These tiles look, from the street, exactly like the clay or stone tiles you might already have on your home. And on top of that, they make electricity.
Still, there have been many attempts to create a solar roof tile, though not from a company with this much visibility in the market. The big deal here is that Tesla claims these tiles will contain some of the most efficient solar cells ever, and, from what they tell us, will “have a lower installed cost than the price of a roof plus the price of electricity.”
What are people saying about how much they’ll cost?
There are so many variables in there, it’s impossible to answer this question with any certainty. That said, we thrive on conjecture, so let’s dive in! The big things we don’t know about these tiles are: how much they’re going to cost, how much energy they’ll produce, and what kind of warranty we can expect. But we have ways of divining that information.
For example, we’ve got two very good sources who’ve done some of the homework for us. First, there’s Barry Cinnamon’s fine analysis of the numbers, based on his extensive experience as a solar installer. He comes up with the following guesses as to the particulars:
- Cost: $35,250 for retrofitting an existing home, $26,500 for new construction
- Energy per tile: 6 watts
- Lifespan: He doesn’t say (Elon Musk says 2-3 times longer than a traditional roof)
Next, we have Consumer Reports, who take a little different tack, choosing instead to compare the potential cost of the tiles to the types of tiles they’re meant to replace, and extending the amount of electricity they use to calculate the final cost to 30 years, which we’d say is a bit too long. Here’s what they came up with:
- Cost: $69,500 to $98,500, depending on tile type.
- Energy per tile: they don’t have an estimate, but they think the tiles will replace $2,000 in energy in one year
- Lifespan: They claim 30 years
What is Solar Power Rocks saying about how much they’ll cost?
There is no way a Tesla tile roof is going to cost $98,500, even if it is sold by the folks who bring you the $130,000 crossover SUV. The simple fact is that the $53,500 Consumer Reports adds on for the value of electricity is ludicrous. Usually for analyzing solar value, you’d look at the next 20 years of just the value of the energy the panels would replace. For that, you need to start with how much the roof is going to generate.
We think the final cost of a solar roof will be between $40,000 and $43,000 for clay or glass-style tiles. Maybe a little more for the slate tiles. So let’s call it $43,000. Here’s how we break that down:
- $25,500 for the solar portion of the roof (about $4.25 per watt, which is about 15% higher than the current national average installed price)
- $17,500 for the rest of the roof tiles that aren’t solar tiles
The reason we separate those out, is we’re not sure how much of the roof will qualify for the Federal 30% solar tax credit. We assume that only the solar portion will qualify.
How did we come up with these numbers? We’ll get into the nitty-gritty, but only if you want to.
Tesla is saying these solar cells will be about 23% efficient. Each tile holds a 6-inch cell, which Barry Cinnamon guesses will lead each to produce 6 watts of power, but we’d argue that because of the loss of efficiency with the increased temperature from the cells being inside the roof tiles, we could expect more like 5.35 watts per cell.
Consumer Reports states the average home has 3,000 square feet of roof space, and only half of that will likely be facing south (or southwest, or whichever direction the sun is in where you are). Furthermore, adhering to fire setback regulations leads us to reduce the available square footage for solar tiles on an average roof to 750. With 1.5 tiles in a square foot, we calculate that the average home can hold 6.02 kW of solar cells (5.35 watts * 1.5 tiles * 750 sq. ft. / 1000 watts).
The cost of those cells depends largely on the cost to manufacture them, and a little on the rest of what any solar installation would cost. Namely, transportation, installation, customer acquisition, and other small fractions of necessary costs.
Greentech Media pointed out in 2014 that the cost of manufacturing a solar cell in the U.S. was about $.68/watt, and we’d guess that’s gone down a bit since then. We decided on a per-watt price for the new, advanced cells about double that ($1.20/watt), and tacked on $.20/watt for all the rest of the stuff needed to make the cell work right.
Finally, given that materials cost is about 33% of the cost of the installation, we arrived at our final $4.25/watt cost (well, $4.24242424, but who’s counting?). From there we added the cost of a typical tile roof from the Consumer Reports article above, plus a 17% price premium based on the difficulty of installing the non-solar tiles around the solar tiles/tile modules. So the 75% of the roof that’s not solar costs about $17,500 on average ($20k for asphalt tiles on a 3,000 sq.ft. roof * 75% of roof * 1.17 price premium).
Finally, here’s what we need to know to see whether this thing is a good deal, and the numbers were using, based on a southern California installation:
- Installed cost per watt of solar: $7.15
- kWh produced per kW of solar panels: 2,000
- Panel degradation rate: 0.5% per year
- Initial cost of electricity, and whether a state has net metering: $.17/kWh, and yes
- Rate of increase in utility prices: 3.5%
- Total solar tax credit: $7,650 (30% of the $25,500 cost of the solar portion)
- Loan interest rate: 4%
- NPV opportunity cost: 6%
Just tell me: is this solar roof gonna pay its cost back, or is this just a swindle?
Take a look for yourself:
At around 6 kW of solar panels, this thing isn’t going to eliminate your power bill. What it will do is save you about $1,600 on electricity costs in the first year, and as the price of electricity goes up, you save more.
At the price we specified above, $43,000, minus a $7,650 Federal tax credit based only on the cost of the solar portion of the roof, this roof would be a screaming deal. The price could go up to $47,500, and it would still have a positive NPV over 30 years. If the Feds allow a tax credit on the whole cost of the roof, this thing would be an insane bargain even if it cost $60,000.
Elon Musk has long been accused of relying on government subsidies to make his products financially attractive. In this case, it may be true. You’d need to have significant income to be able to claim a Federal tax credit of $10,000-$18,000, but if you do, this roof is essentially free if you plan to stick around for 30 years. And with the value it would add to your home, especially looking like it does, it’s probably going to be a slam dunk.
For real, though: nobody but Tesla knows how much these things will cost, or how much they’ll produce. We’ll find out soon, and when we do, Solar Power Rocks will be on the case!
Last modified: October 23, 2018