The CEO of leading solar power provider SunPower Corp. (SPWR), Tom Werner, says he is skeptical regarding Tesla Motors Corp.’s (TSLA) ability to offer its solar roof at the low price point promised by CEO Elon Musk in November. (See also: Tesla Unveils Solar Roof And Next Generation Of Powerwall.)
Palo Alto, Calif.-based Tesla, now combined with Musk’s SolarCity in a $2.6 billion deal, says its solar roof will cost less than a normal roof after factoring in the price of labor and before considering savings from energy generation. Unlike traditional solar panels made of photovoltaic steels installed over traditional roofs, Tesla’s solar roof is made of quartz glass, replacing a roof altogether.
No Roof on Ambitions
“So the basic proposition would be ‘Would you like a roof that looks better than a normal roof, lasts twice as long, costs less and by the way generates electricity’ why would you get anything else,” Musk said in a speech after shareholders voted to approve the Tesla-SolarCity merger.
Ten years back, SunPower threw its efforts behind offering a similar solar roof option only to find it too expensive for the amount of energy produced.
“It’s a trade-off of looks cool versus costs more,” indicated Werner. “We found our customers said it doesn’t look cool enough to offset.”
Analysts Doubtful on Tesla’s Roof
Renewable energy bears at Axiom Capital are more doubtful of Musk’s promise. Using a cheap asphalt shingle roof from Home Depot to mean a “normal roof,” the firm pegged the cost at $1 per square foot. Given traditional solar rooftop panels produce 15 watts of power per square foot at an estimated $0.40 per watt, the investment firm says rooftop solar could cost about $6 per square foot, not factoring in transportation costs.
To Tesla’s defense, specifics regarding the roof are yet to be announced, and will most undoubtedly last longer than asphalt shingles, which need to be replaced every 10-15 years. Further, higher-end roofs such as tile roofs have become popular options for homeowners, with a price tag around $11,000 along with a $30,000 installation cost. Further, when adding back energy savings, which is a main reason homeowners go for costlier solar roofs, Tesla’s new product looks more attractive for the average homeowner tired of high utility bills.
As for Tesla’s entrance into the market, San Jose, Calif.-based solar panel leader SunPower’s CEO says that while Tesla presents heightened competitive pressure on the firm, its entry into the market is a net benefit for entire industry. (See also: A Look at Solar Energy Earnings.)