The Latest in Residential Renewable Energy Whether you are looking to save some money on your electric bill or preparing for a potential nuclear Trumpocalypse, a solar-powered home may be something that interests you. In the past there have been limited options for adapting your home to solar power – namely the unattractive panels bolted onto your roof or basic solar shingles since 2005. That is all set to change with the merger of #SolarCity and #Tesla. Starting around the 4th quarter of 2017, the combined company will start installing their new designer solar roofs. I am here to share with you some of the things I have learned, and maybe make your decision whether to go solar slightly easier.
Cost of a tradition roof and utilities: There are several different materials that you can currently use for your roof: Tuscan style terracotta, traditional asphalt shingles, and the long-lasting but pricey slate. The average home in the United States has a 3,000 square-foot roof, which means the average cost for materials and installation is $16,000, $20,000 and $45,000 respectively. The clay and slate roofing material has a lifespan that the solar roofs cannot begin to compete with now, but its 30-year warranty is on par or better than the common asphalt shingle roof. The warranty for them varies greatly based on the quality of the shingle, the climate you live in, and how many layers are on your home (the fewer the better). Warranties can be as little as five years and up to 30. We’ll be comparing asphalt singles and the solar roof for now, due to the popularity of asphalt.
If you have an asphalt roof that lasts 15 years, that means over 30 years you would purchase an asphalt roof two-to-one compared to the solar roof. That already brings a hypothetical cost up to $40,000. For the total price of the SolarCity roof needed to break even or make money, one must take the cost of utilities into account. In some areas of the country people pay over $1,700 a year just for electricity, reaching nearly $2,500 if you have all-electric appliances. You will want electric appliances in order to get the most out of your new investment. Otherwise, you will continue to pay to use your gas appliances instead of getting the power form the sun. A solar roof that meets all of your daily electrical needs could save you $1,700 a year; over 30 years that would total $51,000. The final cost of choosing asphalt over solar could cost you between $71,000 and $91,000, depending on the quality of materials you choose and how much electricity you use. If SolarCity wants to be truly competitive, they cannot start their pricing above $70,000, or it would be as if you were paying for 30 years’ worth of utilities upfront.
SolarCity Pricing: While they have yet to release the final price point for the new shingles (though we should know by mid-2017), we can make a few estimates for how expensive it might be. They suggest that to get the most use of the solar roof, you should install at least one of their new Powerwall 2.0 systems. Each power wall can store 14kW worth of energy. The average U.S. home uses just under 30kW of energy a day, so you will want at least two of these power packs to run everything in your house. Each Powerwall system will cost $6,500 installed, so before we even get to the roofing materials themselves, we are looking at a cost of $13,000, which is over 50 percent of the cost of a typical asphalt roof. So far this year, installing solar on your house is costing about $3 per Watt. If you want your home to produce enough energy to provide for all of your energy needs, it will be 30,000 Watts times the current cost per Watt or $90,000 (well over the $70,000 range I discussed earlier). This will total over $100,000 when you add in the cost of the Powerwall systems. I also imagine that there will be a different price point for the style of roof you chose. They currently plan to offer four styles. If I had had to venture a guess, the textured glass will be the cheapest and the slate style easily the most expensive. They are using a process called hydrographic printing, which uses ink in a water-based solution to dye each of the tiles in a unique pattern. No two tiles will look alike, so no two roofs will look the same.
I know that $100,000 can seem like a daunting number. Who has that much money laying around or can take on a loan that size? This is not where the conversation ends, however. Industry experts and SolarCity have said that they expect costs will eventually go down to $1 per Watt (installed price), cutting the current cost by two thirds. So now, we know the goal, and the current estimated price, but we do not know what CEO and Chairman, Elon Musk, will set as his initial price point. He has had a history of competitively pricing products. The Powerwall system, while being pricey, is 30 percent cheaper than its competitors are. I would not be surprised if the SolarCity roofs show the same kind of price disparity. If that is true, at the end of 2017 you could get a new roof and two Powerwalls for between $70,000 and $75,000, which is close to the figure I mentioned earlier. That may not seem worth it, but it isn’t the end of the road because there are some other advantages that will come with going solar sooner rather than later. Benefits to Going Solar:
The first major benefit is being able to claim the Investment Tax Credit (ITC) for the cost of your installation. The ITC was signed into law on December 18, 2015. The bill extends the 30 percent Solar Investment Tax Credits for both residential and commercial projects through the end of 2019, and then drops the credit to 26 percent in 2020, and 22 percent in 2021, before dropping permanently to 10 percent for commercial projects and zero percent for residential projects. The way it works is by claiming the money you spent to install your roof. Say it costs $90,000 to install your roof. That means on your taxes you would get a credit for $27,000, on top of all the other money you paid towards taxes, which will increase the size of your return.
If that is not enough incentive, if your roof is producing more energy than you need, you can work with your local utilities in a process called net metering. This is where your electric meter acts as a two way street. It shows how much energy you pull from the grid and how much you put in. If at the end of the month, you have provided more than you use, they apply a credit to the next month and eventually provide a check. California public offices and schools will save an estimated $2.5 billion in electricity costs over the next 30 years using net metering.
One last benefit: If you decide to sell your home after having a solar system installed, it will increase the value of your home by an average of $5,900 per kW. At an installation cost of $3 per Watt, a kW will cost your roughly $3,000, so the value added to your home is nearly double in some cases.
Conclusion: As of now, a large start-up cost will inhibit most homeowners from being able to afford SolarCity’s new product and their vision for the future of a SolarCity roof on every house (and a Tesla in every garage). If it is something you can afford, I would highly suggest looking into it because of what it could provide for you going forward. Personally, I think I will wait a few years and see how things go, how far the price drops, and hope for a second extension of the ITC. I think I would being willing to splurge and live in the future, especially if TNP Studios hits it big and takes me along for the ride.