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Comment by 11thEarlOfMar | Hacker News Reader

Let's talk about Solar City.

Their product is intended to be a solar roof, indistinguishable from a typical roof from street level. Costs look to be in the $50,000+ range. The marketing is that homeowners will not only drive electric vehicles, but go completely off grid by storing the energy collected into Tesla batteries.

In order for this to make financial sense, there needs to be an ROI for the homeowner. So... how long will it take the homeowner to recoup that, say, $75,000 investment?

I am currently spending about $125/month on electricity. That's $1,500 per year. Two Tesla's would run through about $1,000 [0] of electricity in the same year. That's $2,500 per year I'd spend on electricity to my grid operator.

That's 30 years to break even.

I could probably buy an equivalent roof-mounted system for half that, and the batteries, and see a return in 15 years. Is the aesthetic worth the longer term payoff?

Or would Tesla see more uptake in new home construction where the cost of the roof can be amortized into the construction cost?

I understand that Solar City has a different financing biz model, are they going to continue with that.

[0] http://www.greencarreports.com/news/1090685_life-with-tesla-...

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Homeowners often pay extra for aesthetics that appeal to them.

But lets pretend they don't. How quickly does a normal roof recoup its costs? For at least the beginnings of a fair comparison, you should look at recouping the surplus over the normal cost of a roof.

Also, how are you spending $25k on batteries?

This sort of comment seems to attempt to try to take the most negative reasonable possible look on the situation, then throw in a bunch of exaggeration and unreasonable suppositions.

If your point is that normal roof-mounted solar is going to be cheaper, then yes, they pay for themselves in much less than 15 in many locales. But your solar panels plus new traditional roof are not going to pay for themselves in 15 years unless it's an amazing market for solar.

My home's roof has another 20 years on it. So I'll be tossing half of it's lifetime if I replaced it now. That's partly why I mentioned new home construction would likely be an easier market. Moreover, it's a 3000 sq ft ranch, with larger than the average roof area. The Tesla roof is likely going to start at $50,000, (I said "$50,000+") so I'm thinking $65,000 for my house. Batteries are probably in the range of $10,000 for enough to hold charge for the cars and run the house.

They have a calculator. Check it out instead of guessing wildly

FWIW, I have some colleagues who are researching how to reduce energy usage in buildings. It's a lot harder than you would assume just based on pure math, since you have to take Jevon's paradox [1] and other "psychological" effects into account. I.e. when energy gets cheaper, you use more of it.

In my area (same latitude as Anchorage, ~ 65% of the incoming solar energy as in San Francisco), they calculated that solar roof panels on a typical house doesn't break even over a 25 year period, you're still thousands of dollars in the red.

Only the "cheap" air-to-air heat pumps (AC in reverse) and solar heating of your hot water give good ROI. What both these have in common is that the purchase and installation cost is much lower than e.g. rooftop solar.

[1] https://en.wikipedia.org/wiki/Jevons_paradox

Why would you take those into account? Using more energy doesn't mean it "takes longer to recoup", because now you're getting value in the form of additional energy to use.

Are you really getting value? Or are you just not bothering anymore to conserve a resource when it's less expensive to waste it?

Well, you could argue the same if I double your income, but you spend the increase. Like it or not, demand through consumption is the root source of value in capitalism.

Reminds me of this 2010 New Yorker story about Saul Griffith:

http://www.newyorker.com/magazine/2010/05/17/the-inventors-d...

Saul did a more recent long now talk on some of the rough numbers for homes: http://longnow.org/seminars/02015/sep/21/infrastructure-and-...

Ah, thanks -- hadn't seen that before.

I did the calculation back in May when this article [0] came out and recalled the rough numbers correctly for my home (they changed the calculator on their web site, now only talks about the value of electricity the roof would produce).

The quote from the article is: "The average home in the United States is 2,467 square feet. According to Tesla’s handy solar calculator, the new system will set an average homeowner back $51,200 for a 70% solar roof. The company also recommends purchasing the additional, but optional, Powerwall battery to store all that new energy at $7,000, bringing the grand total of installation to $58,200."

My roof is much larger than the average (2,750 livable + roof over garage) because mine is a ranch and the average includes 2-story homes which will have much smaller roof area for the same home square footage. So it's quite reasonable to get from an average cost of $58,200 to $75,000 for my specific home.

[0] https://www.forbes.com/sites/sleasca/2017/05/16/tesla-solar-...

I doubt you would need all 3000 sq ft of roof to be solar.

Normal roof mounted solar doesn't pay for itself unless you plan on staying in the same home for a longggg time.

It pays for itself when you sell the house.

How so? Unless you assume the buyer is too stupid to do the same math? Then you might as well go full-blown McMansion.

You can be guaranteed that most buyers don't do the same math. You see this all the time where e.g. things like extensions or other work adds substantially more value than they cost to carry out.

Unclear. It may be a negative if it looks ugly or if it's an old system.

The complicated financing deals with some solar can also be a problem when you sell if you don't actually own the panels.

That used to be "common" knowledge with pools in my area as well... now they are a liability/nice-to-have based on one's perspective and don't add a dime to value.

Pools create costs, solar removes costs

I've always heard that pools decrease the home value.

Let's take my use case into account. Home built in 1974. Currently needs about 40-50k in "greenifying" it. I just put a metal roof and radiant barrier on it. Total spend on this was 70k. My inefficient home in the Houston area costs between 200(winter) and 600(august) to heat/air condition. It's not a mansion but large enough for my family (7) to live in. If the option for a solar city roof existed when I did this I would have jumped at the chance to use their panels. Even if it only subsidized my electric bill I would feel like that is a win. Its easy to get caught up with numbers/profits when it comes to electric tech But I think that people aren't as unforgiving with traditional building materials as they are with new/green tech. I'm not a Tesla apologist but having an option for electric roofing is a win in my humble opinion.

It can take 30 years to break even. It's attached to a house, which will be around at least that long.

When you sell that house in the future, it's STILL worth $2500 a year off the electricity bill. The house buyer will be willing to pay more for the house for that; if they keep the house for five years, they will have spent $12500 less on electricity, and they'll still have an electric roof to sell to the next buyer. So you should be able to recoup a chunk of that investment when you sell, because a house that can fuel cars using sunlight is worth more than one that can't.

What will the power generation capacity of that roof be after so much time? Don't solar panels wear out?

yes they do and its a very valid question as to when you need to replace the tiles.

Realistically, Tesla's solar roofs will probably be usable for 30 years before needing to be replaced.

https://solarpowerrocks.com/solar-basics/how-long-solar-pane...

Obviously probably solar but it would last long enough to break even.

And, of course, you've got a free roof included with the purchase.

If it works perfectly and you never have to replace anything, yes.

But you aren't making the sort of "profit" you would if you just put that money into the market.

Actually the solar roofs are made to be about the same cost or cheaper than conventional rooftops WITHOUT factoring in the money saved from the electrcity. So anyone that needs a roof replacement (5 million households/yr is the market size iir) might as well get solar roofs. In that sense their ROI is immediate and they have nothing to lose. It only doesn't make sense financially if they weren't planning on roof replacement and they are doing it solely for solar roofs, but Tesla is not marketing it to those folks and even admit that that won't make sense finacially. Those people can get Tesla's regular solar panels and their soon to be released high efficiency(~22%) solar panels.

My roof is slate and nearly 100 years old. It'll last another 100 with minor maintenance so removing it would be negative ROI because of increased maintenance costs vs what I have today.

Still, I'll gladly swap the asphalt roof on my garage when the early adopters drive the price down enough... As an early adopter of everything from CDs to minidiscs I think I'm sitting this one out for a while longer. I don't need the solar roof equivalent of $5 blank CD-R media or Jaz drives; one is a few cents each now and the other was a failure.

I could be wrong but it seems like the better payoff is in waiting a little longer, like 2-5 years.

Assuming your garage roof is flat, unfortunately it won't generate too much electricity. The panels need to be at right angles to the sun for some of the time (even better if they rotate), and except in some parts of the world near the equator the sun is never directly overhead.

They don't needs to, they're just more cost-effective if they do. For now, anway — sufficiently cheap future photovoltaics could well be cheaper than the cost of adding a tilt (already cheaper than adding a sun tracker, which is why grid-scale solar plants don't track the sun)

Only true if you look at designer roofs.

I got 30 year shingles on my roof last year. About 2000 square feet (I know roofs are measured in squares but I forgot the square number). Cost like $6500 installed. Solar city roof is like 45k.

Sure it looks better. And if you compare it to a 25k nice looking roof, the math is way better. But tons of us do not have 25k roofs, we have 5-10k roofs..

Same things as with electric cars, 10 years ago Tesla started as a luxury car manufacturer and now it moves to wider and wider auditory. And there's plenty of 25k roofs for them to be busy for years...

Also, I think math for new houses should include the fact that property is usually mortgaged. So, you take part of the cost that's over 25k and it's mortgaged for 25-30 years. You don't pay $30k at once, you pay $100 a month for it, and it saves you $150 in electricity. So it works right from the start. Now there's plenty of roof space for the beginning and let's see where tech will be in 10 years.

For the exact same reason Tesla won't be able to sell the Model S, because taking the difference between electricity and petrol prices, it will take 50 years to pay off the price difference from a Toyota.

> Tesla won't be able to sell the Model S

Citation needed.

Pretty sure that was sarcasm :)

Well damn, live and learn. While I've gotten very good at detecting online sarcasm, it's still not a perfect game. (:

Bad comparison. You can buy renewable from your electricity provider so the entire 'being green' factor goes away in this comparison.

People buy Teslas because they are fun to drive/nice cars and they get environmentalism bragging rights. There is nothing special about a solar roof compared to paying the utility for the renewable source.

Tesla's sales of model s's seem to have peaked at a level where the model s may never have a net profit margin. (manipulated gross margin figures not withstanding)

If the market isn't big enough the company isn't viable.

Personally I think the long run place of private cars in a TaaS world is questionable.

The Tesla roof is not positioned against asphalt shingles and the cheapest panels you get. It's positioned against high-end roofs, some of which are outrageously expensive. People buying high-end roofing (hint: they're rich) are much more likely to care about aesthetics. They're also unlikely to actually care about the cost of electricity but would like to Do Something For The Environment.

If you don't understand the Tesla roof, you're probably just not part of its target demographic. Is there enough of this demographic to make it worthwhile? I dunno, but Elon and his neighbors have a lot of money.

I see it a little differently. What they seem to be after is the dollars that homeowners currently spend on both gasoline and electricity. They can wrap that up nicely if they can offer the batteries and shingles at a monthly cost that is at or below the gasoline spend. That's about $5,000 in gasoline (2 cars, 18,000 miles @, 22.5 mpg, $3 gal), plus $1,500 in electricity for the home (very round numbers) = $6,500 annually that is in play.

In 10 years, it's feasible that middle class homeowners will have 1-2 electric cars. So if Tesla can offer self sufficiency in energy, which is really what their play is, for a cost that is similar or less than $6,500/year, they have a market.

What it all turns on, which wasn't immediately obvious to me, is that the electric cars are appealing both in performance and style. If not, mass adoption languishes, and Tesla's $1.8 Billion ROI may languish as both the gigafactory and solar shingle manufacturing sit idle.

It's somewhat heartening that Model 3 has such a great initial reception in the press. But what a gamble...

For people who are going to pay for a fancy new roof anyway, the solar is almost free.

For people who were going to pay for a regular roof anyway, the tesla solar roof is still very expensive compared to a regular roof + regular panels

This was my take on it when pricing things in Austin, Texas.

For people who don't need a new roof at all, tesla solar roof is nonsensical.

> I am currently spending about $125/month on electricity. That's $1,500 per year.

That right there is not the market they're targeting. You'll also see very few solar panel pitches in Washington and Oregon, as the hydropower costs are so low, the solar system will take a while to recoup.

Think sunny but AC-dependent homes of Southern California, Arizona, Nevada, Nevada, New Mexico, Texas, Florida or Georgia. I live in Southern California and from our local NextDoor many residential electricity bills are running at $600-700 a month pre-solar. Granted, the houses are in 3,500 sq ft and above, but frequent A/C needs combined with SC Edison's high rates are driving many to rooftop solar and powerpacks.

Throw in an electric vehicle or two that you prefer to recharge at home on a nightly basis and those kWh add up.

>That right there is not the market they're targeting.

They think they can anyway. You have solar salesmen all over you in Massachusetts and I'm in exactly the same situation. I have basically no AC--I may pop in a small window unit in a heat wave--and pay <$1500/year in electricity. And I don't drive a huge amount (and when I do it's often weekend trips) so I'm not seeing an electric vehicle in my near future.

Hard to see the payoff with solar.

> You have solar salesmen all over you in Massachusetts and I'm in exactly the same situation.

Solar is heavily subsidized in MA, one of the best markets to have it installed if you're a homeowner.

You can cut maybe 5-8 years off that if you factor in the cost of non-solar roofing. I doubt too many people are signing up to replace their roof if it doesn't already need replacing.

How much would it cost for a roof-mounted device that makes gasoline for you?

Add your local transportation bill to your electricity bill and now tell me how many years it is.

You can use a Tesla on the grid, and potentially see quicker ROI, depending on your local per-kW rate.

That's an impossible question to answer without running real numbers. It might be cheaper to buy the gasoline (or electricity). Or not.

It would lengthen it for me. I buy cheap subcompacts with good gas mileage. My total cost (annually) for fuel is ~$1k at which point the gas is basically free due to the $12k price difference.

The cost difference between an electric car and a cheap compact car is so high that it pays to fuel the compact car for 100,000 miles +.

Yeah, I kinda think they and the investors are hoping that electricity demand increases and the tech becomes much cheaper while their RnD is funded by millionaires who care about the aesthetics and the environment.

Which is basically how Tesla started - toys for rich people funded RnD until they could scale and get their costs down.

It's still how Tesla exists now until they can deliver the 3 at scale.

While I'm not typical, I think there are a good number in a similar position:

I've got a house with a roof approaching it's end of life. I use 4MWh/month. My electricity bill goes between $1.2k and 2.4k. A Solar City roof is about equivalent in long term (20-30 yrs) cost with a much better warranty.

What on earth do you use that much electricity for?!

My guess is cryptocurrency mining or grow lights

You can actually "hire" a company to put solar panels on your roofs. They not only install it for you and maintain it, but they take responsibility for the upfront costs. "Hire" is in quotes because in many place you don't pay them anything so much as pay a portion of the savings you got by using solar.

To me, that isn't really a technology thing. It's a financing thing. Banks and insurance deal with smoothing out costs all the time, and I think that's all you really need to make it work. All you really need to do is mortgage the solar panels and the panels will pay for their own premium.

Financing makes lots of things work (for better or worse) for many people that otherwise wouldn't. Like buying new cars.

On the other hand, under most circumstances, if something doesn't make sense for someone with cash in the bank who is willing to put that cash down on the barrelhead, it still doesn't make sense because someone obfuscates costs through financing.

I don't have a link at hand, but there is a company offering a metal-roof-based solar roof product at about half Tesla's price. My limited understanding is that it looks like a metal roof -- said roofs having been growing in popularity.

I guess I should add that, as best I recall, they have not yet actually launched consumer sales, although I believe they did/do have a working product.

(Good, and properly installed) Metal roofs (non-solar) are... I seem to recall from 5 or 6 years ago, about twice the price of an asphalt shingle roof. But, good quality and properly installed, they can last 50 years. If this Tesla substitute were to have a similar lifespan and electrical output comparable to Tesla's or at least enough for self-sufficiency, I could see paying for it.

Perhaps a principal problem/consideration being how far technology will advance during that time and will it be desperately obsolete long before then. The other being, will the company be around to provide needed support for anything like that timeframe?

Not just amoritized though - less the cost of alt new roof, maintenance, and replacement. I believe Tesla is offering a lifetime warranty

It straight up doesn't make financial sense unless there are massive subsidies. I live in the Desert Southwest where we have 300+ days of sunshine a year. The Industrial Commision has been "compelled" to lower the rates of energy going back into the system. That is, we pay 08-14 cents a kWh with some BS pricing schedules that need a Gantt expert to decode... WHILE we get paid somewhere between 2-5 cents a kWh.

Solar doesn't make sense for me in other ways too... when I average my electricity usage over the year, it is around $98 per month for a family of 4, 2300 sqft home, in Arizona. If I go with solar city my bill would be $120 and I would be in a lease for 20 years. Nah...

Forget about buying the equipment myself as well due to the reasons above. The time that would be required to recoup the "investment" just isn't worth the hassle.

This is the point, the amount of money used for this acquisition could have been used to bring the Model 3 to market quicker and make batteries in Reno quicker, not to mention any unforeseen problems with production, scaling, and recalls go away that much quicker too.

Which is the bigger market? Solar or cars? They might both be similar sized, but demand for solar sure would have been helped by having the Model 3 on the road. Hope the acquisition doesn't hold Tesla back, like most of the market thought at the time.

(Pacific time zone waking up....)

Either you forgot the cost of externalities from the nonrenewable power generation that is likely supplying your electricity today, or you believe it's zero.

Tesla's mission isn't to make cheaper roofs; it's to accelerate the transition to sustainable energy. If you place any value on that mission, then you should be able to quantify it here.

It's only 30 years if the cost of electricity stays low. Considering electric cars are coming in much faster than utilities are building new electricity generation infrastructure that's likely to be an incorrect assumption. Prices are going to go up a lot.

That doesn't change the solar-city-versus-an-alternative question, but it makes the both more attractive.

The analysis I read had Tesla roof plus batteries closer to $60k for an average house plus batteries.

For payback, you could also subtract the cost of a standard roof assuming your not ripping the old off simply to get solar. That takes $10 to $20k off for many people. Plus traffic feeding depending where you live. So for a new build it would drop the payback time quite a bit.

It might make sense to others, even if it doesn't for you. I live in Hawaii where the cost of electricity is nearly three times the national average. My breakeven point would be ten years. And there's the added benefit of having some independence from the grid, which would be nice in hurricane season.

You are missing the point.

Tesla customers care about money as much as Apple customers do...they don't.

What they care about is being part of the future...today! Tesla customers look at ICE cars and grid dependence like Apple owners look at feature phones...pity full.

What they care about is being part of the future...today!

And why is this bad?

No one has told that this is a bad thing in this discussion.

People that want grid independence are quite selfish when they simultaneously demand that the grid pay them retail rates for excess electricity. They are free riders on the transmission and deliver at suboptimal times.

IMO grid independence is not a laudable goal because it means no scalable energy storage and production systems. Particularly when someone still wants the option to use the grid at their convenience. The maintenance burden is now spread across fewer paying customers with the same number of lines to maintain.

That's what I disagree with. Tesla customers are just looking for the next status symbol.

I have talked to enough tesla owners and fans to tell you that they haven't even heard of Renault Zoe or BYD ev300. And they would never consider Chevy bolt. Its all about the brand name, and not about futuristic electric cars. Tesla could start making ICE cars and they will still buy them

Go look at the UI/UX of a Tesla and compare it to the old car manfacturer crappy UI in Zoe. Compare range. Fast charging options. Fun of driving (Zoe has 16s 0-100km; that's much worse than my old small city ICE). And that's before comparing to Model 3's soon to be only a bit higher price for much better experience.

You don't know what you're talking about. Drive a Tesla before lecturing about how I'm looking for a status symbol.

People will buy the roof for status and it will likely be used on new luxury homes.

Don't forget I think the roof has a lifetime warranty too. So you'd want to factor in the cost of not replacing your roof one or two times.

What is the ROI on a louis vuitton handbag?

Tesla peddles luxury good for price insensitive people.

You want a solar roof that looks good - tesla is the only game in town right now.

Most likely going for another Tesla playbook where wealthy customers (what's $25k on a $3MM+ house?) buy in and subsidize future development.

The key is how the solar is financed. If the customer's monthly electric expenses are the same as before (or close), many would go for it.

You're forgetting that they're expected to outlive the usual roof's lifetime, which can be several thousand dollars.

On your comment about homeowners leaving the grid, electrically --

I personally haven't heard this promoted by Tesla/SolarCity, though I have heard them promote reducing loads on traditional energy sources.

I have however heard it promoted that people with installations like these roofs will be able to earn dividends on a microgrid. I haven't worked out the numbers yet myself (as it's kind of a mercurial interest, but something I keep my eye on), but I have heard a few good talks on the subject and noted a few experiments ongoing relating to just that model.

In the microgrid model, electricity contributors and low-energy users stand to earn for their habits and are paid by other users and excess users on the same microgrid -- I hope I'm summarizing this correctly.

In this last deck there is particular mention of excluding the utility service from the energy trade by utilizing blockchain tech to aid in the trade operations, so that the homeowner directly sees the benefit (at least, directly in some sense.) I recommend looking him and that centre up, there's a lot of interesting work being done -- it's just unfortunate it's not happening faster. It's hard to maintain the public's belief.

I guess I digress from the issue of the cost of the "invisible" roof vs. mounted panels. I wanted contribute to questions of the cost rebates, though.

(0) Brooklyn Microgrid - http://brooklynmicrogrid.com/, https://www.nytimes.com/2017/03/13/business/energy-environme...

(1) Ryerson University Toronto - http://www.ryerson.ca/cue/research/sponsored-projects/contro... (more info: http://www.ryerson.ca/ryersontoday/data/news/2015/03/2015030..., http://www.ryerson.ca/cue/ )

(2) I know of number (1) because I recently heard a talk by Dr McGillivray on microgrids -- he's the former executive director of the CUE at Ryerson and current "Distinguished Visiting Professor, Faculty of Engineering & Architectural Science" there. I didn't know this, but he has been promoting the idea since around 2010[0] and is still active in research and promotion of the system[1a,b]. Ontario (Canada) is running programs open to funding these systems for research and social benefit[2]

[0] I couldn't get the file to link properly, sorry. Here's a download link: https://send.firefox.com/download/245d16f808/#tFZ6GdEh1l2B1v...

[1a] https://eda-connect.ca/wp-content/uploads/2017/03/Trends-in-...

[1b] http://www.thinkingpower.ca/PDFs/Roundtable2016/Microgrid%20...

[2] http://www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.nsf/Ge...

ITT: people who don't live in areas that routinely get hail and periodic roof replacements.

Well, yeah, an area that routinely gets hail and requires roof replacement more often would not have as long of a window for a solar roof to recoup the investment.

And the parts of the US that one would expect to dominate HN are overwhelmingly those that don't get hail.

Solar City claim their tiles are far more hail-resistant than regular roofs. If they can fulfill that promise could that make them worth it?

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