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LAST_UPDATEThu, 21 Sep 2017 10am

Where A Solar Roof Works And Where It Doesn’t

Last week, Tesla and Tesla’s newly-purchased solar-panel company SolarCity announced that they’d be taking pre-orders at $1,000 a pop for installations of their new solar roof product. The solar roof is made up of tiles—some that produce solar power and some inert—that look just like regular roof tiles.

Tesla CEO Elon Musk announced the solar roof late last year, just before investors were about to vote on whether the electric-car company should buy SolarCity. At the reveal, Musk told the crowd that “the goal is to have a roof that's less than the installed cost of a roof plus electricity.” Later, in a conversation with reporters, Musk said “It's not gonna make sense for somebody to replace a brand-new roof with a solar roof.”

But after that announcement, the CEO got bolder with his claims on the cost of his company’s roof, saying at a shareholder meeting that “It’s looking quite promising that a solar roof actually [costs] less than normal roof before you even take the value of electricity into account.”

Perhaps Musk meant this as a long-term projection, because when pre-orders opened up last Wednesday, Tesla and SolarCity also rolled out a calculator to give prospective customers an estimate on how much a solar roof would cost them. For many, the projected cost was well above the cost of a basic asphalt roof with a 30-year warranty, but roughly in line with the cost of a normal roof plus solar panels. For others, the projected cost was much more than what they’d expect a new roof with any amount of solar panels to cost.

Right now, making the economics of a solar roof work out for you depends on the state you live in, how much electricity you use, and the size of your house.

Take Lee, for example

Take our senior editor Lee Hutchinson, for example. He’s got a 2600-square foot house outside of Houston. Using Tesla’s solar roof calculator, he found that a Tesla-brand roof would cost him... $99,100 to install (the calculator estimated solar tiling for 3700 square feet of roof, which Lee chose not to edit due to the fact that some of his roof has gables and angles that will add square footage to the total calculation).

That price was without adding a $7,000 Powerwall, which Tesla initially recommended. That’s expensive on its own, and with a $180-per-month-on-average electricity bill, Lee isn’t burning through enough electricity during the day to justify the cost. With a few exceptions (including Austin), most utilities in Texas don’t permit net metering, so he can’t sell any excess energy back to the grid. And while many households with smaller roofs or higher energy bills might expect to recoup the cost of a solar installation over 30 years, Tesla’s calculator says installing a roof on Lee's house would actually cost him $41,000 over 30 years.

Lee noted that his house only cost about $200,000 originally, so, on first impression, he was concerned that adding an extra $100,000 onto that cost would raise his property taxes—especially in Texas, where property taxes tend to be higher due to the fact that the state doesn’t collect income tax (Lee’s are around four percent). He was also concerned that an increased property value would raise insurance premiums as well.

Tesla’s calculator noted that Lee could expect a $23,500 federal investment tax credit, but that’s deducted from income tax at the end of the year. Without some special financing, it wouldn’t help soften that perceived initial outlay.

Elon replies

After Lee tweeted about how extraordinary that cost was, Elon Musk responded to him on Twitter, agreeing that “The economics are not yet compelling where housing and utility costs are low and property taxes are high.”

But Tesla’s calculator doesn't quite express the whole story. The trouble with selling roofs is that costs are very location-dependent. For example, Lee’s fears about property tax increases are unfounded because Texas offers a property tax exemption for renewable energy systems added on your property, including photovoltaics (as well as a host of other creative methods of renewable energy generation).

His fears about insurance premium increases might be sound, but it’s hard to tell. Tesla and SolarCity executives said last week that the durability of the roof and its claimed “infinity warranty” might reduce insurance costs for some people. But that’s highly dependent on the insurance company. The more expensive your installation is, the more insurance will have to shell out if your home suffers some kind of sinkhole-type calamity. But if an end-times-scale hailstorm damages your Tesla tiles, the insurance company won’t be the one replacing the tiles—Tesla will.

But even if insurance looks at Tesla’s warranty (which covers power production for 30 years and the tiles themselves for “infinity”) and decides to cut Lee a break, that doesn’t make the raw cost of the solar-roof installation any cheaper for him.

-Arstechnica