A brand-new Tesla may be coming soon to your neighborhood. But it could be on top of your neighbors’ home, not parked in their driveway.
Chief Executive Elon Musk on Friday unveiled the electric-car company’s new solar-paneled roofs and said he expects to be fitting more than 1,000 a week within short order.
Typical pricing: Around $35,000, the company said.
It’s another bold promise from the controversial technology entrepreneur, whose company stunned skeptics on Wall Street last week by breaking into profit in the third quarter.
“I think within the next several months we should be well past 1,000 roofs a week,” he said Friday. “That’s our goal.” Sales, he said, “will grow like kelp on steroids. Long term, obviously we want to do 10,000 roofs a week. “
About 5 million new roofs are installed a year in America, Tesla said. Musk believes that in the future effectively all roofs will generate solar power. “The addressable market is 100 million roofs,” he said.
Tesla’s new solar roofs are not to be confused with the company’s standard solar paneling, which can be added to an existing roof and competes with multiple similar products. Tesla’s solar roofs are an entire new roof for your home, an integrated power-generating structure.
They are more expensive than panels, though Tesla argues they are cheaper than the combined cost of panels and a new roof. The current version is the third iteration.
The costs of installing solar power are falling. They cost approximately $2.99 per watt, according to some industry estimates. The average size of a solar-panel system size in the U.S is 6 kilowatts, equivalent to around $12,558 per roof after tax credits, down 2% on the year, according to Energy Sage, a solar-panel company.
“The average price per watt for solar panels ranges from $2.58 to $3.38, and solar panel costs for an average-sized installation in the U.S. usually range from $10,836 to $14,196 after solar tax credits, it says.
Tesla, meanwhile, is working on aesthetics. Colors coming soon will include earth tones, clay tile and French slate as well as the current black, it said.
The economics of solar panels — not to mention roofs — are getting better and better for homeowners. Panels are getting cheaper and better. Meanwhile, the chances are the price of electricity from your local power company has either stayed steady or gone up.
“It’s kind of a no-brainer,” Musk said. “It’s really: Do you want something that prints money? And if it doesn’t print money, we’ll fix it or take it back.”
Musk said the economics are better if you buy than finance. “Most people do actually buy it, as opposed to rent it, which actually is technically better,” he told investors last week. “While you make money immediately if you rent it, it’s actually a better investment if you buy it.”
Financial advisers say consumers need to do their homework before taking the plunge on solar panels from any source. Multiple factors to take into account, they say, include not just any upfront costs, but also service agreements and warranties, financing costs, tax breaks and possible income from the power company if you produce more electricity than you use.
Homeowners should run the numbers on buying the panels or renting them. And, naturally, some homes are better for it than others. Those with big roofs that face south are best.
Some advisers admit that the first time they’ve really run the numbers on solar paneling has been when they’ve done it on their own home. But that’s now giving them more confidence to talk numbers with the clients.
Katherine Fibiger, an adviser at Stratos Wealth Partners in Westport, Conn., recently installed paneling — not from Tesla — on her own home, taking advantage of today’s cheap interest rates to finance the panels for 12 years at less than 1% annual interest. “It was positive cash-flow from day one,” she says. “So we weren’t out of pocket.”
But if you are going to buy panels, don’t just look at price, she warned. “It’s an expensive system, and it’s an expensive system to maintain, and it’s on your roof,” she said. Check the warranties, service agreements and the stability of the company, she said. “A key issue was the type of warranty that’s offered. If we have any issue with the roof, and the panels have to come off, they’ll do that for free.”
Solar panels, and now entire solar roofs, are long-term products that are typically expected to last for 20 or 30 years. So you want to have confidence that the company supplying them is going to last as well, advisers say. Your warranty may not be much use if the company that produced it has gone out of business, they note.
For that reason, last week’s pickup in Tesla’s fortunes may have come at an opportune time for its solar business. A few months ago, the markets were worrying about Tesla’s financial condition. It’s not just the stock that has rallied since. The company’s bonds, or IOUs, jumped sharply last week. The 2025 bonds now trade at 95 cents on the dollar, up from just 82 cents a few months ago.
In the eyes of Wall Street, the risks that the company might run out of money and default haven’t vanished completely — but they have certainly faded sharply.