Their product is intended to be a solar roof, indistinguishable from a typical roof from street level. Costs look to be in the $50,000+ range. The marketing is that homeowners will not only drive electric vehicles, but go completely off grid by storing the energy collected into Tesla batteries.
In order for this to make financial sense, there needs to be an ROI for the homeowner. So... how long will it take the homeowner to recoup that, say, $75,000 investment?
I am currently spending about $125/month on electricity. That's $1,500 per year. Two Tesla's would run through about $1,000  of electricity in the same year. That's $2,500 per year I'd spend on electricity to my grid operator.
That's 30 years to break even.
I could probably buy an equivalent roof-mounted system for half that, and the batteries, and see a return in 15 years. Is the aesthetic worth the longer term payoff?
Or would Tesla see more uptake in new home construction where the cost of the roof can be amortized into the construction cost?
I understand that Solar City has a different financing biz model, are they going to continue with that.
But lets pretend they don't. How quickly does a normal roof recoup its costs? For at least the beginnings of a fair comparison, you should look at recouping the surplus over the normal cost of a roof.
Also, how are you spending $25k on batteries?
This sort of comment seems to attempt to try to take the most negative reasonable possible look on the situation, then throw in a bunch of exaggeration and unreasonable suppositions.
If your point is that normal roof-mounted solar is going to be cheaper, then yes, they pay for themselves in much less than 15 in many locales. But your solar panels plus new traditional roof are not going to pay for themselves in 15 years unless it's an amazing market for solar.
The complicated financing deals with some solar can also be a problem when you sell if you don't actually own the panels.
The quote from the article is: "The average home in the United States is 2,467 square feet. According to Tesla’s handy solar calculator, the new system will set an average homeowner back $51,200 for a 70% solar roof. The company also recommends purchasing the additional, but optional, Powerwall battery to store all that new energy at $7,000, bringing the grand total of installation to $58,200."
My roof is much larger than the average (2,750 livable + roof over garage) because mine is a ranch and the average includes 2-story homes which will have much smaller roof area for the same home square footage. So it's quite reasonable to get from an average cost of $58,200 to $75,000 for my specific home.
In my area (same latitude as Anchorage, ~ 65% of the incoming solar energy as in San Francisco), they calculated that solar roof panels on a typical house doesn't break even over a 25 year period, you're still thousands of dollars in the red.
Only the "cheap" air-to-air heat pumps (AC in reverse) and solar heating of your hot water give good ROI. What both these have in common is that the purchase and installation cost is much lower than e.g. rooftop solar.
When you sell that house in the future, it's STILL worth $2500 a year off the electricity bill. The house buyer will be willing to pay more for the house for that; if they keep the house for five years, they will have spent $12500 less on electricity, and they'll still have an electric roof to sell to the next buyer. So you should be able to recoup a chunk of that investment when you sell, because a house that can fuel cars using sunlight is worth more than one that can't.
Obviously probably solar but it would last long enough to break even.
But you aren't making the sort of "profit" you would if you just put that money into the market.
Still, I'll gladly swap the asphalt roof on my garage when the early adopters drive the price down enough... As an early adopter of everything from CDs to minidiscs I think I'm sitting this one out for a while longer. I don't need the solar roof equivalent of $5 blank CD-R media or Jaz drives; one is a few cents each now and the other was a failure.
I could be wrong but it seems like the better payoff is in waiting a little longer, like 2-5 years.
I got 30 year shingles on my roof last year. About 2000 square feet (I know roofs are measured in squares but I forgot the square number). Cost like $6500 installed. Solar city roof is like 45k.
Sure it looks better. And if you compare it to a 25k nice looking roof, the math is way better. But tons of us do not have 25k roofs, we have 5-10k roofs..
Also, I think math for new houses should include the fact that property is usually mortgaged. So, you take part of the cost that's over 25k and it's mortgaged for 25-30 years. You don't pay $30k at once, you pay $100 a month for it, and it saves you $150 in electricity. So it works right from the start. Now there's plenty of roof space for the beginning and let's see where tech will be in 10 years.
If the market isn't big enough the company isn't viable.
Personally I think the long run place of private cars in a TaaS world is questionable.
People buy Teslas because they are fun to drive/nice cars and they get environmentalism bragging rights. There is nothing special about a solar roof compared to paying the utility for the renewable source.
If you don't understand the Tesla roof, you're probably just not part of its target demographic. Is there enough of this demographic to make it worthwhile? I dunno, but Elon and his neighbors have a lot of money.
In 10 years, it's feasible that middle class homeowners will have 1-2 electric cars. So if Tesla can offer self sufficiency in energy, which is really what their play is, for a cost that is similar or less than $6,500/year, they have a market.
What it all turns on, which wasn't immediately obvious to me, is that the electric cars are appealing both in performance and style. If not, mass adoption languishes, and Tesla's $1.8 Billion ROI may languish as both the gigafactory and solar shingle manufacturing sit idle.
It's somewhat heartening that Model 3 has such a great initial reception in the press. But what a gamble...
For people who were going to pay for a regular roof anyway, the tesla solar roof is still very expensive compared to a regular roof + regular panels
This was my take on it when pricing things in Austin, Texas.
For people who don't need a new roof at all, tesla solar roof is nonsensical.
That right there is not the market they're targeting. You'll also see very few solar panel pitches in Washington and Oregon, as the hydropower costs are so low, the solar system will take a while to recoup.
Think sunny but AC-dependent homes of Southern California, Arizona, Nevada, Nevada, New Mexico, Texas, Florida or Georgia. I live in Southern California and from our local NextDoor many residential electricity bills are running at $600-700 a month pre-solar. Granted, the houses are in 3,500 sq ft and above, but frequent A/C needs combined with SC Edison's high rates are driving many to rooftop solar and powerpacks.
Throw in an electric vehicle or two that you prefer to recharge at home on a nightly basis and those kWh add up.
They think they can anyway. You have solar salesmen all over you in Massachusetts and I'm in exactly the same situation. I have basically no AC--I may pop in a small window unit in a heat wave--and pay <$1500/year in electricity. And I don't drive a huge amount (and when I do it's often weekend trips) so I'm not seeing an electric vehicle in my near future.
Hard to see the payoff with solar.
Solar is heavily subsidized in MA, one of the best markets to have it installed if you're a homeowner.
Add your local transportation bill to your electricity bill and now tell me how many years it is.
I've got a house with a roof approaching it's end of life. I use 4MWh/month. My electricity bill goes between $1.2k and 2.4k. A Solar City roof is about equivalent in long term (20-30 yrs) cost with a much better warranty.
To me, that isn't really a technology thing. It's a financing thing. Banks and insurance deal with smoothing out costs all the time, and I think that's all you really need to make it work. All you really need to do is mortgage the solar panels and the panels will pay for their own premium.
On the other hand, under most circumstances, if something doesn't make sense for someone with cash in the bank who is willing to put that cash down on the barrelhead, it still doesn't make sense because someone obfuscates costs through financing.
I guess I should add that, as best I recall, they have not yet actually launched consumer sales, although I believe they did/do have a working product.
(Good, and properly installed) Metal roofs (non-solar) are... I seem to recall from 5 or 6 years ago, about twice the price of an asphalt shingle roof. But, good quality and properly installed, they can last 50 years. If this Tesla substitute were to have a similar lifespan and electrical output comparable to Tesla's or at least enough for self-sufficiency, I could see paying for it.
Perhaps a principal problem/consideration being how far technology will advance during that time and will it be desperately obsolete long before then. The other being, will the company be around to provide needed support for anything like that timeframe?
Solar doesn't make sense for me in other ways too... when I average my electricity usage over the year, it is around $98 per month for a family of 4, 2300 sqft home, in Arizona. If I go with solar city my bill would be $120 and I would be in a lease for 20 years. Nah...
Forget about buying the equipment myself as well due to the reasons above. The time that would be required to recoup the "investment" just isn't worth the hassle.
Which is the bigger market? Solar or cars? They might both be similar sized, but demand for solar sure would have been helped by having the Model 3 on the road. Hope the acquisition doesn't hold Tesla back, like most of the market thought at the time.
Either you forgot the cost of externalities from the nonrenewable power generation that is likely supplying your electricity today, or you believe it's zero.
Tesla's mission isn't to make cheaper roofs; it's to accelerate the transition to sustainable energy. If you place any value on that mission, then you should be able to quantify it here.
That doesn't change the solar-city-versus-an-alternative question, but it makes the both more attractive.
For payback, you could also subtract the cost of a standard roof assuming your not ripping the old off simply to get solar. That takes $10 to $20k off for many people. Plus traffic feeding depending where you live. So for a new build it would drop the payback time quite a bit.
Tesla customers care about money as much as Apple customers do...they don't.
What they care about is being part of the future...today! Tesla customers look at ICE cars and grid dependence like Apple owners look at feature phones...pity full.
I have talked to enough tesla owners and fans to tell you that they haven't even heard of Renault Zoe or BYD ev300. And they would never consider Chevy bolt. Its all about the brand name, and not about futuristic electric cars. Tesla could start making ICE cars and they will still buy them
You don't know what you're talking about. Drive a Tesla before lecturing about how I'm looking for a status symbol.
IMO grid independence is not a laudable goal because it means no scalable energy storage and production systems. Particularly when someone still wants the option to use the grid at their convenience. The maintenance burden is now spread across fewer paying customers with the same number of lines to maintain.
And why is this bad?
Tesla peddles luxury good for price insensitive people.
You want a solar roof that looks good - tesla is the only game in town right now.
I personally haven't heard this promoted by Tesla/SolarCity, though I have heard them promote reducing loads on traditional energy sources.
I have however heard it promoted that people with installations like these roofs will be able to earn dividends on a microgrid. I haven't worked out the numbers yet myself (as it's kind of a mercurial interest, but something I keep my eye on), but I have heard a few good talks on the subject and noted a few experiments ongoing relating to just that model.
In the microgrid model, electricity contributors and low-energy users stand to earn for their habits and are paid by other users and excess users on the same microgrid -- I hope I'm summarizing this correctly.
In this last deck there is particular mention of excluding the utility service from the energy trade by utilizing blockchain tech to aid in the trade operations, so that the homeowner directly sees the benefit (at least, directly in some sense.) I recommend looking him and that centre up, there's a lot of interesting work being done -- it's just unfortunate it's not happening faster. It's hard to maintain the public's belief.
I guess I digress from the issue of the cost of the "invisible" roof vs. mounted panels. I wanted contribute to questions of the cost rebates, though.
(0) Brooklyn Microgrid - http://brooklynmicrogrid.com/, https://www.nytimes.com/2017/03/13/business/energy-environme...
(1) Ryerson University Toronto - http://www.ryerson.ca/cue/research/sponsored-projects/contro... (more info: http://www.ryerson.ca/ryersontoday/data/news/2015/03/2015030..., http://www.ryerson.ca/cue/ )
(2) I know of number (1) because I recently heard a talk by Dr McGillivray on microgrids -- he's the former executive director of the CUE at Ryerson and current "Distinguished Visiting Professor, Faculty of Engineering & Architectural Science" there. I didn't know this, but he has been promoting the idea since around 2010 and is still active in research and promotion of the system[1a,b]. Ontario (Canada) is running programs open to funding these systems for research and social benefit
 I couldn't get the file to link properly, sorry. Here's a download link: https://send.firefox.com/download/245d16f808/#tFZ6GdEh1l2B1v...
And the parts of the US that one would expect to dominate HN are overwhelmingly those that don't get hail.
To put it in a pool and swim in it, like Scrooge McDuck?
The amount of waste that is obviously happening there is maddening.
Chris Moore @ctmoore91 Aug 10
Quick math on $SNAP marketing numbers:
- $3.60 per existing user
- $89 per acquired user
to make revenue of $1.05 per user in... 3 months
because it's available.
I would dump that shit if I owned it.
I read this as Tesla took investment of $1.8B (presumably in return for shares), but in this case they have issued $1.8B of bonds, so they've effectively taken out a loan.
This adds $95 million in interest expense per year which is pretty substantial.
That's considered junk bond level today. Historically, it's not a bad interest rate. It's an OK deal for Tesla.
Those are the prevailing rates but I think the bond holders are getting a lousy deal considering tesla's actual risks
Shorts take note: Tesla has access to dumb capital that you haven't necessarily factored into your models.
What is the new goal to 2020? 2 years ago they were expecting delivery 500,000 cars in 2020. If they will do that this year, maybe their new goal is to finally put a foot in the top 20 group of world manufacturers?
Many evil/fraud companies game the system to access unjust benefits. But every now and then one is able to find some company rising among the other, deserves appreciation. It is only natural to think that such companies must have analyzed the system more than the ones they surpassed, otherwise they would go unnoticed among all the cheaters.
Back to metaphor; The system is like a blade: a killing device on a killer, a life saving device on a surgeon. It is true that there seems to exist more killers than savers.
Disclosure: I own quite a few shares in Tesla. They were only ~24.00 USD when I bought them. I admit my bias.
I don't own enough shares to pressure them into ethical sourcing and, honestly, hadn't even given it much thought until just now. I only have ~850 shares. Which, while a bunch, isn't going to influence much.
It does make me curious.
I'd love to see a really exhaustive study comparing the environmental effects of ICE and EV cars when taking into account the entire product lifecycle from mining, transport, manufacturing, power generation and distribution, refining, etc. I've seen studies comparing a few of these things but nothing that goes from the time some alloy is mined or oil is taken from the ground through the entire life of an automobile.
This is a bit older and more about energy consumption.
'....a Tesla representative said that Eberhard and other principals in the dispute have come to an agreement. The company did not reveal any details of the resolution, except to say that there are now five, rather than two, agreed-upon "founders" of Tesla.'
But also, it doesn't matter that much, few would disagree that JB and Elon has done a tremendous amount for Tesla and that it wouldn't exist without them).
I remember that there were quite a few EV startups back in the day - aside from Tesla next none of them exist today.
I'd like to hope a journalist would know, however. Well, at least research it. I'm pretty sure Wikipedia knows all about it.
Still, I think it's a mistake on my part, to think others would know - more so, given the pervasiveness of the misinformation.
I for myself only learnt this ~2010... Before I always thought he was the founder...
He does, I think, deserve lots of credit. Him not being one of the originals in no way detracts from his work and skill.
The mhacks.org site could use some work though:
- no password reset
- you lose your profile after saving it and re-navigating
And at any rate, Musk has argued, Tesla staff earn equity. That bags them as much as $100,000 more than the average auto worker over a four-year period."
On a vaguely related tangent, the sheer duplication of work I saw at Apple was impressive, their corporate culture has secrecy so ingrained that large chunks of the company are duplicating eachother's work needlessly, out of fear of communicating effectively.
This has benefits. I think it's the same with organisations. The secrecy and keeping to yourself, also means you are free to do your thing and there is less need to communicate, "build a shared view" and so on.
Storage is cheap. It's much more efficient overall to bundle apps with essentially everything they need to run--modulo the kernel although there's some debate about that last point.
If some other company is willing to pay them more, they can go there.
But this amount will only cover their loses for a few months and they probably want to demonstrate their ability to make future profits before diluting their stock significantly. If they sell equity too quickly, it'll look like the stock is crashing and encourage even more selling.
This is how Solar City floundered at the end - under crushing debt from junk bonds.
I'm the first to admit that I don't follow their specific financials to know how much runway they need to be profitable.
Debt has one big advantage over equity too, which is that if the company goes under, bond holders are repaid if possible. Equity holders only own whatever is leftover.
"The company burned through $1.16 billion in cash in the second quarter [...] a little more than $3 billion in cash on hand"
"Fund your business by issuing cryptocurrencies" is an idea that will likely end in defending yourself legally against the SEC. Bad idea. I don't recommend it.
Which they argueably are.
Currencies must be widely accepted in exchange for goods or services. Crypto is promising, but it's not there yet.
If Tesla can pump out 500K globally, that's respectable, but hardly a death knell to the 80 million unit industry.
electric will always be a victim of its own success unless it can actually become competitive with ice on cost and energy density.
remember that the baseline cost for an ice car is about $1000 (used) and $5000 (new). there is a world outside of california (shock) and it has billions of potential customers.
ice isnt going anywhere.