Tesla Solar Roof Pricing Expectations Update May 15th, 2017

Tesla, one of the world’s truly innovative companies, is at the forefront of making clean energy the new conventional choice for living with its trifecta of products including electric plug-in car, Powerwall battery, and the newly released solar roofing tiles. We’ve introduced Tesla Solar Roof here. Now, we drill down on costs and potential savings.

The Price of an Average Roof

Tesla CEO and product architect Elon Musk claims that Tesla roof will be comparable in cost, over its lifetime, to other common roofing types. Is he just blowing promotional smoke, or is his boast the truth?

Are we talking about a typical asphalt roof, or a typical high-end clay tile or natural slate roof here? The truth is that Musk is comparing his product to high-end residential roofs, and as our earlier analysis has shown, a new Tesla Solar Roof will probably cost in the range of $70,000 to $100,000 installed on a typical house.

And what about the energy cost savings? Is that a game-changer when considering a Tesla roof? Let’s get some answers, starting with average roof costs. All costs are per square foot and cover most roofs. You can always find exceptions on the high end of cost.

Material                                                       Material Cost            Installation Cost

Asphalt shingles                                          $0.80-$1.50                $1.50-$4.00

Wood shingles/shakes                              $2.50-$6.00                 $3.50-$5.50

Metal roofing (seam or shingle)              $4.00-$8.00                 $4.00-$6.50

Tiles, clay or concrete                               $12.00-$24.00             $5.50-$9.50

Standard PV panels                                   $32-$45                        $8.00-$15.00

Note on standard PV panels: The current cost of traditional photovoltaic panels installed is $40-$60 per square foot for those that produce the same amount of energy per square foot that Tesla solar tiles generate. Most are backed by 25-year power output warranties.

The Price of Tesla Solar Glass Roofing Tiles

Tesla is making two types of glass roofing tiles. The solar tiles are glass over a photovoltaic substrate. Non-solar tiles are all glass. Two styles, Textured and Smooth, are available now; Tuscan Tile, and Slate are scheduled for 2018.

The company recently announced that the cost of an average Tesla roof will be approximately $21.85 per square foot for the materials. Tesla created its pricing estimates on the assumption that the average roof will need to be 35% solar tiles to generate the home’s required electricity.

Based on the high cost of the Tesla glass solar tiles, it doesn’t make sense to create more electricity than your home can use. Making excess power, pushing it onto the grid and being paid for it by your utility company is not cost-effective with these numbers.

Factoring in the Installation Costs

A big likely variable is going to be the installation cost of Tesla solar roofing, and unless that expense has already been baked into the cost projections given to us by Tesla thus far, that installation expense is likely not going to be cheap. Few installers currently have the expertise, but demand for the tiles is light right now. As demand rises, the number of certified installers should rise with it.

Traditional roofing contractors, especially those with experience installing clay and concrete tiles, will likely want a piece of the solar tile market.

And as was mentioned earlier, unless the installation expense is already baked into the average price of $21.85 per sq. ft. for Tesla solar tiles, which at this point is still unclear, there could be an additional cost to install the system.

A rough estimate at this point is that Tesla Solar roof will cost $5.00 to $8.00 per square foot to install (in addition to the cost of materials, unless we hear explicitly otherwise from Tesla directly) and another $1,000 to $2,000 for the electric grid connection and battery hookup.

Making a Tesla Roof Cost-effective

What’s the bottom line? Given the numbers in the table above and the Tesla tile cost of $21.85 per square foot, there’s no way Tesla can compete on cost with an asphalt roof, right? It seems a ridiculous assumption. Elon Musk would remind us to take into consideration three crucial factors.

• Lifetime cost of the roof: Tesla guarantees its tempered glass roofing tiles for life and power generation for 30 years. That means you’d never have to pay for replacement non-solar tiles and would only be liable for replacing the 35% solar after 30 years.

  While wood shakes and shingles and tiles made from clay and concrete last longer than 30 years, they aren’t backed by a warranty matching Tesla’s “Infinite Tile Warranty” covering the material for “infinity or the life of your home.”

  Asphalt shingles need replacing every 15-25 years depending on climate and location factors. So, as a roofing material, the lifetime cost of a Tesla roof grows more competitive.

• Energy production: Studies done in states with large numbers of solar roof panels show that annual electricity costs are about $2,000 per home. If a Tesla roof generates all the power the home needs, then it is adding $2,000/year in value or $60,000 over its guaranteed 30 years of power production.

  Now, if you go with a Tesla solar roof, you’ll also need to get their Powerwall 2.0 to integrate the roof with your electrical system.

  The current cost of a Powerwall is $6,500, and it comes with a 10-year warranty.

  So, if you need three batteries during the 30-year span the tiles are guaranteed to work, you’d spend $19,500. That’s a hypothetical number, because the technology and cost will both change significantly in the first ten years. However, crunching the numbers in 2017 dollars, a Tesla roof will add about $40,000 to the operational costs of your home over time.

• Tax credit: Currently, the federal government offers a 30% tax credit on Solar Energy Systems including those using photovoltaics (PV). Tesla solar tiles meet the standard, so you’d receive a 30% tax credit on 35% of the roof. The credits are available on first and second homes, but not rentals, and on commercial properties.

  Remember that a tax credit comes right off the top of your tax liability. It is not merely a deduction in the amount of your Adjusted Gross Income (AGI).

Tesla has created a calculator to show how much energy your roof will generate over 30 years. Type in your home’s address where requested, and you’ll get near-instant results including:

• What percentage of your roof should be solar vs. non-solar
• Value of 30-year energy production
• Cost of the materials
• Cost of one Powerwall (but remember the 10-year warranty)
• Current tax credit value
• Net gain or loss over 30 years

Does a Tesla Solar Roof Make Sense for You?

Tearing off a roof in good condition to go Tesla might not add up, but if your roof needs replacing or you’re building a new home, then Tesla solar roofing is an intriguing option.

The longer you plan to live where you are, the more cost-effective your decision will be. Of course, if using green building materials is a conviction for you regardless of the cost, then Tesla solar roofing is an attractive, energy-efficient way to go.