solar roofs
Pacific Gas & Electric Co. is in the process of shutting off electricity to about 940,000 customers in Northern California — a trend that will continue as it fights wildfires and works to upgrade its network. But just as this effort gets underway, a new one is now beginning — one that capitalizes on the movement to use more onsite generation and distribution.
Specifically, Tesla Corp.’s Chairman Elon Musk said last week during an earnings call that he would introduce the next iteration of “solar roofs” and that such an idea would be the norm within two decades. Most immediately, he expects 1,000 new solar roofs a week: solar tiles are actually the roof, producing electricity and protecting houses at the same time. The underlying message is not just that homeowners can go green but that they can avoid rolling blackouts.
Musk first unveiled this idea in 2016. But it has been slow to gain ground, mainly because the visionary has been dedicating most of his resources to the electric car. According to Musk, the power density of the solar tiles is twice that of previous versions, enabling them to produce more electricity. At the same time, he says that solar roofs are a more economical proposition than solar panels placed on rooftops and that access battery storage.
After tax breaks, he would expect the all-in cost to be about $34,000 for a 2,000 square foot home. There is no money down, he adds, noting that solar panels are said to increase home values by 4%. It is offering a 25-year warranty.
“The goal is to have solar roofs that look better than a normal roof, generate electricity, last longer, have better insulation and have a lower installed cost than the price of a roof plus the price of electricity,” Musk said, during the earnings call. “The solar-glass roof is not going to make financial sense for somebody who has a relatively new roof, because this is itself a roof that has integrated solar power generation. We are doing installations as fast as we possibly can, starting in the next few weeks.”
Musk has made it clear that his overarching goal is to improve the conditions of the planet and specifically, to limit the levels of heat-trapping emissions. To that end, he needs solar roofs to win market acceptance, which will push down prices and produce a snowballing effect. No pun intended, but the roof is not the limit. The same thinking applies to electric vehicles and battery storage.
Hurdles Ahead
Just as the electric car has hit some potholes so too has the solar roof. But importantly, Tesla’s latest earnings tied to its electric car have exceeded expectations, generating revenue of $6.3 billion for the quarter while delivering 97,000 new cars. In other words, as more drivers buy into the electric car experience, prices are falling and the technologies are improving.
With that as context, the concept of solar roofs is just now emerging and they, too, will have hurdles to overcome: solar entities must first establish name for themselves in the roofing business while finding qualified installers and minimizing costs. Energy companies are not top-of-mind when it comes to roof installations, requiring Tesla to form partnerships to both sell the idea and to install the solar roofs.
Tesla, meantime, is not positioning itself as a competitor to traditional roofing; rather, it is marketing itself as a green alternative that is also a better deal than solar-plus-storage. It adds that the solar tiles can be installed in eight hours. And as previously stated, the success of the company’s electric car business has come at the expense of its solar panel business: Tesla installed just 6.3% of the U.S. residential solar market, says Wood Mackenzie Power & Renewables. Vivint Solar and Sunrun are the leaders.
“Tesla has essentially thrown in the towel on pursuing growth in the residential solar space because it has concluded that acquiring customers is simply too expensive, writes Wood Mackenzie Senior Solar Analyst Austin Perea in a recent report on Tesla’s store closures. “Rather, Tesla will rely on its brand power and low-cost referral methods to keep the solar business afloat until it stabilizes.”
Tesla would argue that its solar panel business is part-and-parcel to its battery storage enterprise. Those devices can be used in electric cars as well as both utility-scale grid storage and residential storage. Residential batteries are smaller systems that produce 5-10 kilowatts of electricity and often installed in garages. Grid-scale storage is 1 megawatt and sold to utilities by storage developers.
Musk may be spread thin. But he says that he remains committed to the solar panel and energy storage businesses — tools that need to scale up and to improve efficiencies. It is same recipe for Tesla’s solar roof endeavor. The sky is the limit. If the idea takes off, the rewards would spread, especially to those homeowners now at risk of rolling blackouts and wildfires.
