I don't really see the selling point, or value here.
Tesla's calculator estimates $40,500 for a roof that generates half our power needs, and should provide $20,400 worth of energy over 30-years.
Add in a PowerWall and federal tax credit, and I'm still losing $15,400 over 30-years.
If I put that same $40,000 in an index fund that got the stock market's historical 7% average, and waited 30 years, I'd have $308,000.
To put it in another perspective, the last estimates I got for a solar system that covered 100% of our average power needs came in at $32,000 installed, before the same $11K tax credit that Tesla includes in their calculations.
So, I could pay under $20,000 for a "traditional" solar system that covered 100% of our energy bills, or $40,000 for a Tesla solar roof that covered 50% of our energy bills.
That's quite literally half the value, at twice the price.
If I put in a traditional solar system tomorrow, it would pay for itself in year 9. If I put in a Tesla solar roof tomorrow, I'd still be out $15K at year 30.
>If I put that same $40,000 in an index fund that got the stock market's historical 7% average, and waited 30 years, I'd have $308,000.
Are you doing the math all in present dollars? Because the return is 7% after inflation but >10% before. So you'd have >500.000 in 2047 dollars. In this case it's important to do that adjustment because you're doing an investment upfront for payoffs over 30 years so the value of money adjustment is extremely important. It should only make your case stronger though if you haven't done that yet.
The case can be made even stronger if the consumer's efficiency gap is taken into account.
For example from "Market failures and barriers as a basis for clean energy policies by Marilyn A. Brown" we read:
"Meier and Whittier (1983) studied a case in which
consumers were given a choice in stores throughout the
United States of two refrigerators that were identical in
all respects except two: energy efficiency and price. The
energy-efficient model (which saved 410 kilowatt hours
per year, more than 25% of energy usage) cost $60 more
than the standard model. The energy-efficient model was
highly cost-effective in almost all locations of the
country. In most regions, it provided an annual return
on investment of about 50%. In spite of these favorable
economics, which were easily observed by the purchaser,
more than half of all purchasers chose the inefficient
model. The higher purchase price of the efficient model
was presumably the principal barrier to its purchase."
An annual ROI of 50% is left on the table because people have to pay something upfront for benefits later!
Tesla's pricing strategy here is quite blunt. They hope people don't care about the costs, only the looks and the sustainability.
Disclaimer: I don't know how sustainable the manufacturing process of this solution is.
I would assume (hopefully) that the following is true: my guess is that Tesla is currently executing a similar plan to produce solar products in the same format they produced the cars - expensive, high end up front. Roll your moderate price, high end products with the income, rinse and repeat.
I think if this is the case, they certainly don't want to hint at it incase they lose consumers who will sit back and wait for the cheaper option they ironically wouldn't arrive.
If you expect either 7% real returns or 10% nominal returns from the stock markets over the next few decades, you're gonna have a bad time - mostly because real interest rates in the 21st century are much lower than in the second half of the 20th.
Current expert thinking is that there is a 4% equity risk premium over cash interest rates. Current cash rates are 1% nominal or -1% real. If you are an optimist like the Fed, cash rates will rise to 3% over the long term - which gets you to 7% nominal/5% real at best.
I wasn't making a prediction on future returns just commenting on the historical returns used. For this case 5-7% should be more than enough as a comparison to the Tesla investment anyway. I'm curious about those risk premium estimates though. Any pointers or sources on where to read more about them?
Energy prices have been mostly flat relative to inflation for 40 years, and there's a reasonably good chance that they will start dropping appreciably (at least during peak daylight hours) as solar continues to make major inroads.
That's true in a lot of places but not really in California, where there's a lot of customers for solar. I don't need to go into the reasons why. It's California.
Solar can also reduce grid costs, by e.g. shaving the yearly peak power demand, which is usually a summer afternoon so it's not clear cut.
Probably the bigger impact is bad incentives for the people building the grid, who are often able to do what they like and get a guaranteed percentage return on top, which pushes them to spend more than they need to. This has been particularly pronounced in Australia I believe.
Solar leases use the 2% inflation rate too as a way to make them look more attractive (as does the solar roof calculator) but in reality electricity hasn't been getting more expensive at that rate.
Increasing renewable energy sources and an abundance of fossil fuels is going to increase energy prices at a rate higher than inflation? I don't think so.
> Tesla's calculator estimates $40,500 for a roof that generates half our power needs, and should provide $20,400 worth of energy over 30-years.
This depends quite strongly on where you are. Your numbers are very close to the ones I get if I use my correct address, which is in the Puget Sound area of Washington State.
If I keep everything the same except the address, changing that to one in Merced, California, then it says I'd get $75000 worth of energy over 30 years.
PS: it looks like they try to use the address for more than just finding the location in order to estimate how much sun is available. I tried an address that I had lived at in Pasadena, California, and it did not ask me for the house size and number of floors. Instead, it did the calculation using about 6000 sq ft, which is about the size of the apartment building that is at that address. For my Seattle-area and Merced addresses, it did ask me for the house information.
They are using Google's Project Sunroof[1] to do the modeling. The tool uses satellite images of your roof to create the estimates, and accounts for orientation, shading from trees, etc...
Sorry to be a pedant but Maps is not a 20% project, it was an acquisition of a company called Where 2 Technologies. Google Earth was also an acquisition (Keyhole).
My turn to be pedantic, I guess, but 80 and 443 are only two of many available ports. The internet is much bigger than just the web, even if lots of people never bother to look beyond their browser.
If you ever get to go to Geneva, swing by the CERN exhibit. There's the original fileserver, complete with 'This machine is a server. DO NOT POWER DOWN!!' scrawled on tape stuck over the power button. There's also his paper describing the WWW with the feedback of his manager written across the top: "vague but interesting...".
It's kind of comforting to know that my academic and computing experiences thus far are shared both across the globe and across decades.
They have a link to sunroof below their estimate. Not sure what happens if you aren't covered by sunroof, but their are a ton of solar estimation tools out there that will give you a rough idea of your potential just based on lat/lon.
Your electricity is probably a lot cheaper in Washington also and I'm assuming they have local rate information to factor in. Electricity is very expensive in California especially if you use PG&E since they use a tiered rate structure that goes from .12 - .50 cents. And very little of your usage is actually in that 12 cent tier for most people. In states like that I would imagine your solar roof could potentially pay for itself.
Isn't the selling point aesthetics? It's very clearly not for everybody, not yet, anyways.
In Colorado it's against the laws for HOAs to ban solar systems, there are some tricks though because they can require certain roofs that you can't really put solar on. Certain tiles and 'presidential' grade roofing which typically cost more than normal shingles as it is. If you live in one of those types of places and want an energy system, then this is what you want. Honestly, I've not heard a lot of complaints about the aesthetics of a conventional solar system, in fact I think some people like it because it's really obvious looking; but if you have the funds and really value the look, then there is an option for you.
It's probably not that different from the market for a Model S vs a Honda Accord. The S is 3+x the cost of the Accord, has fewer fueling stations, can't be serviced nearly as easily, probably is less 'practical' in a handful of other ways but there are still people that buy and drive Model S Tesla cars.
Don't forget the tesla $40,500 includes a roof AND solar. To for a fair comparison you have to include the cost of roof and solar for the next year. Your mentioned other system for $20k that handles 100% of your need doesn't include the roof.
> Add in a PowerWall and federal tax credit, and I'm still losing $15,400 over 30-years.
Which you probably sink into a second layer of asphalt shingles 15-20 years in (at least up here in upstate NY where there's plenty of rain/snow). Hopefully it's not a tear-off, as that'll cost more.
It's always tearoff. A lay over is saving 2k and shortening the life of brand new roof. Always a bad idea. Unless maybe selling the house soon to a naive buyer.
And whats wrong with that? A bunch of rich early-adopter-for-the-status types will get a Telsa roof, Telsa will get better at developing the technology and the price will come down, meanwhile more people are moving to renewable energy sources to power their homes which is good for the environment. Whats the downside here?
In 30 years how many times will you have to redo your roof I think one of Tesla solar roofs points was that many houses in the US have to reshingle. Although I still don't think it might be worth it for you.
> Weatherization means that there will be no water leaks or other weather intrusions during the 30 year warranty period that result from our installation.
It will almost certainly require replacing and/or serious repair long before the "lifetime of the house" is up.
I live in a neighborhood full of slate tile roofs and tile replacement is a fairly routine occurrence. Are you positive that no tiles have been replaced in the past 100+ years?
> put that same $40,000 in an index fund that got the stock market's historical 7% average, and waited 30 years, I'd have $308,000.
stock market isn't a very safe investment (that is, risk is much higher than putting in a bank), you can't make a comparison against buying some equipment, which is zero risk. A closer comparison is putting the $40,000 in a bank that guarentees interest (or treasury bonds, which is also pretty much risk free like a bank) - you'd get $99,457, which is $59,457 over your initial investment.
> you can't make a comparison against buying some equipment, which is zero risk.
Equipment isn't zero risk. It could fail and need replacement, or need dramatic repairs. Or the price of electricity could drop dramatically and your investment won't be saving you as much in electricity bills...
There is always risk. Maybe the price of electricity changes, or the laws change, so you can't recover costs? (Look at what happened in Nevada.)
Maybe Tesla goes out of business or drops support for this product? Maybe they aren't as durable as planned? Also, a roof is part of a house which is a very illiquid investment, and there are a lot of other factors affecting the price of a house.
But, presumably people aren't buying this just as an investment. If you're going to put a lot of money into a house anyway, maybe a fancy roof isn't so bad.
Well investing in solar panels isn't either, 30 years is a lot of time for such (currently not very efficient) technology. Price of the electricity could go down significantly as current renewable or nuclear generators get improved over time, or perhaps someone will finally figure out how to do the fusion efficiently?
Wouldnt increasing the tag price of your home by 15k to absorb the loss when you sell compensate? Also, in 30 years, 15k will be worth less than 15k today.
Tesla's calculator estimates $40,500 for a roof that generates half our power needs, and should provide $20,400 worth of energy over 30-years.
Add in a PowerWall and federal tax credit, and I'm still losing $15,400 over 30-years.
If I put that same $40,000 in an index fund that got the stock market's historical 7% average, and waited 30 years, I'd have $308,000.
To put it in another perspective, the last estimates I got for a solar system that covered 100% of our average power needs came in at $32,000 installed, before the same $11K tax credit that Tesla includes in their calculations.
So, I could pay under $20,000 for a "traditional" solar system that covered 100% of our energy bills, or $40,000 for a Tesla solar roof that covered 50% of our energy bills.
That's quite literally half the value, at twice the price.
If I put in a traditional solar system tomorrow, it would pay for itself in year 9. If I put in a Tesla solar roof tomorrow, I'd still be out $15K at year 30.