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Saturday, October 29, 2016

The U.S. has more than 70 million single-family homes and nearly all have something in common: They are covered by some kind of roof.

The U.S. has more than 70 million single-family homes and nearly all have something in common: They are covered by some kind of roof. If Elon Musk has his way, those rooftops will all be generating solar power using technology provided by a combined Tesla and SolarCity. He showed off his new vision at an event yesterday, with prototypes of a new roof combining shingles and solar cells. Musk says it will cost homeowners less than a traditional roof plus typical electrical costs. Given Musk is already trying to build a high-volume automaker and develop spacecraft capable of reaching Mars, he’s going to have a lot of work to do before it’s real.

The idea behind this roof isn’t entirely a new one; solar shingles first reached the market in 2005. Those weren’t as elegant as what Musk demoed yesterday and their high cost relative to ordinary solar panels has led to little market presence. The reasons why Tesla / SolarCity might succeed where others haven not go beyond the aesthetics however. SolarCity has direct sales efforts where it operates and handles everything from permitting to installation. But Musk’s presentation left many questions unanswered.

First, will the materials be available to other installers, particularly traditional roofers? While few have embraced solar, they might like this product if it provides them higher incomes and installation is easy enough. They also have expertise in building weatherproof roofs that SolarCity doesn’t. On the plus side, solar permitting should be streamlined with the Tesla roof. There are often issues regarding installs too close to the edges of the home, which should fade with these integrated panels.

The rules are often about firefighter access, however. And that raises a question as to whether local fire codes allow for roofs entirely covered with potentially live solar panels. The individual roof titles are glass covered and non-conductive on the top, but exactly how they will interconnect to one another and to the home’s electrical system were among the many questions yet to be answered. Another issue is cost. Most solar installs today are south facing or at least oriented to capture maximum sunlight. The Tesla roof ostensibly could receive sunlight all day, with the side oriented toward the sun receiving the highest power output.

There’s nothing simple about that, however. First, it means a lot of solar cells that are not receiving optimal sunlight. Those aren’t free to add even once SolarCity’s new “gigafactory” for panel making opens in Buffalo, New York. Second, it means that sections of the roof will have differential amounts of output at different times of day. That causes problems for traditional solar installations which tend to have all panels drop to the output of the one getting the worst light. There are solutions using technologies like solar optimizers and micro-inverters but those also have costs.

It’s possible Tesla will sell a combination of their roof tiles (which come in four styles to mimic traditional roofs, slate roofs, and terra cotta tiles) both active and passive. If you have a shady side of your house, the roof will match aesthetically but it might not be active. And in many homes the optimal solar array today doesn’t cover the entirety of the roof so tomorrow’s need not either.

Of course, Musk is also expecting a lot of customers to want to generate excess power to charge their Tesla vehicles. In many cases, that won’t happen directly as cars tend to be away from home during peak solar hours. But Musk will have you covered there as well so long as you have a Tesla Powerwall 2, the company’s new home battery pack. The new model is twice as larger (14 kilowatt-hours) as the original while sporting a retail price of $5500 — less than twice the $3000 of the first model.

The vision is impressive, the lack of detail suggests it isn’t close to fruition. Musk has done demos like this one before, demonstrating a battery-swapping setup for Tesla cars that never got past the testing phase and seems to have been abandoned. That there was no sample cost calculation for what a Tesla roof might run someone doesn’t inspire confidence this deal will be compelling to most homeowners. Roofing costs vary widely, but typically run $7,000-$15,000. The average home uses about $1300 of power each year as well.

When Musk says the Tesla roof will cost less than the combination, he leaves out a critical variable: How many years of power we’re talking about? On a new home, this should be less of an issue; the incremental cost of the Tesla roof will be a small portion of a typical bill for new construction. When it’s time to re-roof — which Musk says happens 4-5 million times per year in the U.S. — that math is very different. While SolarCity has mostly installed solar on various leases and “power purchase agreements” it seems likely this is a product you would buy outright. From an insurance and financing perspective, that might be the only way it can be sold.

Residential solar has fallen to as low as $3 per watt in the U.S., though some people pay nearly twice that. A revolutionary product would bring that down to more like $2 — a price that is achievable in other expensive labor markets, notably Germany. The Tesla roof might allow that to happen here but Musk wasn’t talking up such benefit. Instead, his talk was about batteries, EVs and solar roofs working together to help combat climate change.

That’s the right kind of giant goal. With nearly all roofs in the country due to be replaced over the next 20 years, the new Tesla roof could be the first product that leads to the vast majority of them becoming miniature green power plants. But cost, installation, local rules and the uncertainty surrounding shareholder approval of the Tesla / SolarCity deal all stand as possible roadblocks. They’re just the beginning of a longer list of questions Musk and the combined company will need to answer.

It’s worth noting that yesterday’s demo was conducted on “Wisteria Lane”, where the fictional homes from the defunct television show Desperate Housewives are located. Those structures aren’t even themselves fully realized, which provides a perfect metaphor for the Tesla roof. Musk presumably plans to be even busier to turn that Potemkin Village into reality. The planet may depend on it.

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