Tesla recently announced that they have started accepting reservations for their eagerly anticipated solar roof. Of the four designs that were revealed by Tesla in October of last year, two are now available for pre-orders with an additional two slated to be available in 2018.
So, how does the solar roof compare to the traditional approach of installing solar panels on an existing roof? Read on for an in-depth comparison!
To understand the cost differential between a Tesla Solar Roof and traditional solar panels, we ran the numbers on a typical three-bedroom single family home in California with an estimated 2,000 sq.ft of roof space and an average monthly electric bill of $150.
Cost of a Tesla Solar Roof:
When we used Tesla’s calculator, we got the following recommendation: cover 40% of the Tesla Roof with Solar Tiles to produce sufficient electricity to offset the $150 monthly electric bill. Tesla’s Solar Roof costs $46,800 and an estimated Income Tax Credit of $10,100 make the net upfront cost of the solar roof $36,700. The annual benefits from the solar roof would be an estimated $1,800 in electricity bill savings ($150 in monthly savings x 12). The payback period for a Tesla solar roof for this California home would be 20 years.
From Tesla’s Calculator:
Cost of solar panels on an existing roof:
Let’s contrast this with installing traditional solar panels on an existing roof. For the same home illustrated above, you would require about 19 solar panels with a system size of 5.23 kW (kilowatts) to offset the $150 monthly electric bill. Traditional solar panel systems cost between 3,000 per kW to $3,500 per kW. At an average price of $3,250 per kW, the cost of the solar panel system would be $17,000 with an estimated tax credit of $5,100, making the net cost $11,900. In this instance, the payback period for solar panels on an existing roof would be about 6 years.
Cost of solar panels with a new roof:
If the homeowner is also replacing the roof, there is an additional cost to installing a new roof. Let us assume that the new roof is an asphalt composite shingle roof, the most popular roof type. This roof type typically costs between $5 per sq.ft to $7 per sq.ft of roof space installed. Using an average rate of $6 per sq.ft, a 2,000 sq.ft new asphalt composite shingle roof would cost $ 12,000. So, the net cost of replacing the roof and installing solar panels would be $23,900 ($11,900 for the solar panels plus the $12,000 for the new roof). In this instance, the payback period for solar panels with a new roof would be 13 years.
Cost Comparison: Tesla Solar Roof versus Solar Panels for a California Home
|Solar Project Type||Roof||Panels||Tax Credit||Net Cost||Payback in Years||Discount to Tesla’s Price|
|Tesla Solar Roof||$46,800||$0||-$10,100||$36,700||20.4||Not Applicable|
|Solar Panels on Existing Roof||$0||$17,000||-$5,100||$11,900||6.6||68%|
|Solar Panels with New Roof*||$12,000||$17,000||-$5,100||$23,900||13.3||35%|
* Asphalt Composite Shingle at an average installed price of $6 per sq.ft.
It is no surprise that Tesla has priced their product at a premium compared to other alternatives. It is a similar strategy to how they have priced their cars. When homeowners are deciding between a Tesla Solar Roof and traditional solar panels, the first thing to consider is the age of the existing roof. If the existing roof is relatively new or you don’t need a new roof for many years, it is significantly cheaper (by 68%) to install solar panels on your existing roof than purchasing a Tesla Solar Roof.
For homeowners, that have a really old roof with limited lifetime left, a Tesla Solar Roof could be a real option. Getting a traditional roof with solar panels is still cheaper by about 35%. With the Tesla Solar Roof offering additional benefits such as better aesthetics, higher strength, longer roof warranties and the added convenience of dealing with only one company for roofing and solar, each homeowner can evaluate if the benefits are worth the additional price for a Tesla Solar Roof.
It is worth noting that the above calculations, including payback are a function of the size of the roof, how much sunshine a roof gets and prevailing electricity rates. Currently the Tesla solar panel system (Solar Roof) is available for pre-order only in California. As the Solar Roof becomes available in more states, we will offer additional illustrative examples for those regions.