Tesla Motors has high ambitions for its latest product: a solar roof that combines a home’s structural top with an energy-generating photovoltaic system. However, the success of the solar roof will hinge largely upon how Tesla prices and positions it.
The solar roof consists of tempered glass tiles that are embedded with high-efficiency photovoltaic cells. From most perspectives, the tiles look like conventional shingles. However, from above, they allow light to pass through their surface and shine on a solar cell.
The solar tiles come in four styles: textured glass tile, slate glass tile, tuscan glass tile, and smooth glass tile. The tiles are apparently indistinguishable from conventional tiles, with Tesla showing them used on the houses from the television show “Desperate Housewives” with no visible sign that they were solar cells.
Tesla described the tempered glass as “tough as steel,” and able to withstand the elements for a “quasi-infinite lifetime,” according to Bloomberg.
The tiles currently produce electricity at 98 percent of the rate of conventional solar panels. Tesla is working with 3M to develop improved coatings that could boost efficiency beyond the level of normal cells, according to Bloomberg.
Tesla didn’t give specifics on pricing, but promised that the overall cost would be less than installing a conventional roof and paying utility rates for electric power.
Peter Rive, SolarCity’s co-founder and Musk’s cousin, said Tesla’s solar roofs could command a 5 percent share of the 5 million new roofs installed annually in the United States within one or two years after production starts, according to Bloomberg.
This means there would be 250,000 Tesla solar roofs in the U.S. in the near future. That would represent a massive share of the U.S. residential solar market.
The U.S. this year reached 1 million cumulative residential solar installations, according to the Solar Energy Industries Association. The SEIA expects that total to double within two years, amounting to about 500,000 residential installations annually. This would give Tesla half the annual market, based on current figures.
The SEIA was optimistic, although not specific, about the prospects for Tesla’s solar roof technology.
“While we will leave it to Tesla to talk about the specifics of their new product offerings, the things they are doing represent the kind of innovation that has brought solar into the mainstream conversation about America’s energy use,” said Dan Whitten, vice president of communications for the Solar Energy Industries Association. “Disruptive solar technologies are changing the way we think about keeping our homes comfortable and our vehicles moving. Products such as those Tesla is offering are good for our economy, for American consumers who want to choose how they get their energy and for the environment.”
Down to earth
Tesla’s historic approach to pricing and product positioning may present challenges as it tries to hit its targets for its solar roof. The company traditionally hasn’t sought to compete on price, instead focusing on well-heeled consumers with its high-end automobiles.
“I would imagine they are not going to be competing on a dollar-per-watt basis, serving a similar market to Tesla drivers,” Mike Sheppard, managing consultant at Power Technology Research LLC. “This would not be enough to achieve something like a 5 percent market share. However, if financing via a rooftop lease or ownership was tied to the technology, it is certainly possible.”
The attractiveness of the Tesla solar roofs compared to conventional solar panels may also have limited appeal to homeowners.
“The consumer-ish elements of the solar market like aesthetics are present; however, this is definitely more subdued than for electric cars if one were to draw a comparison,” Sheppard said.
However, for Tesla, which has built a business on the cachet of its brand and products, it may be possible to overcome these challenges.