Solar Roof: A Tesla Power Play Elon Musk Must Flip From A Flop
In 2016 – like today and probably for as long as he can tweet -- Elon Musk was shouting from the rooftops about what he could, would and was doing to improve humanity and save the planet.
Specifically, in 2016, he crowed of a home building technology that he promised would revolutionize life on the mere, mortal, messy power grid, and at the same time solder visions of future transportation and future energy use into a single holistic street-level reality.
Solar Roof, part of a promise of the moon, stars, and Mars, that households can "power everything with Tesla," has some strategic – and, importantly, operational – rewiring of its own to do if the business is to make it in an increasingly fierce residential solar competitive arena.
Home power technology that "pays for itself over time," exudes curb appeal as opposed to rooftop solar panels, and lasts three-times longer than typical roofing tile materials made quite a splash, not just in consumer mindsets, social media, and among renewable energy advocates.
Homebuilders, too, welcomed an innovator that could potentially equip them with home features, functionality, and performance that would drive value directly to their buyers' pocketbooks.
Then, like many things Tesla, the promises far exceeded reality, particularly as regards attainability of the product, distribution and delivery to job sites, and, perhaps most problematic of all, the installability of the roof, a critical path matter for builders.
Bloomberg staffer Dana Hull writes, "Tesla’s Solar Roof Rollout Is a Bust — And a Fixation for Elon Musk," and in analyzing the many missteps in strategy, execution, management, and operations, Hull focuses on a key to whether Solar Roof thrives or fails.
The company is coming to grips with how vastly different it is to fine-tune roof projects than to fix issues on an automobile assembly line. Every home’s roof is unique, including its size, pitch, angle and age. Unforeseen problems can pop up, like rotting beams or termite damage. Permits, which involve bureaucracy, are required, and the process varies widely depending on location. Crews, spread out across the country, need to be trained.
Installation hell is a human-centric problem, and a diffuse one. Musk can’t sleep on the couch of every home getting a Solar Roof, like he claims he did at Tesla’s factory when he got in the engineering weeds to help salvage the Model 3. On Tesla’s most recent earnings call, Musk acknowledged that his team made “significant mistakes in assessing the difficulty of certain roofs,” said that demand remained strong despite price hikes and announced that “we will not sell a house solar without a Powerwall,” referring to Tesla's home battery product.
“Production is going fine, but we are choked at the installation point,” Musk said on the April 26 earnings call.
Musk – who has terminated top executives in the Solar Roof business, and taken one of his patented hands-on, fixated approaches to putting the operation on track – has good reason for concern. He and his portfolio of bold enterprises stand a better chance of making it on Mars if they first figure out how to make a go of it here on this planet, among earthlings. Here are some pertinent stats on the growth and potential of solar energy power in the U.S. in 2021 from Sunbadger Solar.
Of the total U.S. electricity generation, Solar energy accounts for 2% as of 2019.
The U.S. had enough solar panels installed to power 16.4 million American homes by the end of Q3 2020.
Solar power in America offsets over 100 million metric tons of carbon dioxide yearly — nearly equal to 131 million acres of forest.
At least92.7 billion solar panels are in use throughout the world today.
5KW, or around 20 panels, is the average U.S. residential solar installation.
The average cost for a solar energy system is between $10,000 and $30,000.
America’s largest solar farm, Solar Star, is 4 times the size of Central Park and produces about 579MW.
Since 2013, Solar has ranked in the top two in capacity added to the electric total in the U.S.
Right now, there are about 2,500 MW of utility-scale solar being built right now.
In just 2018, 10.6 GW of solar was installed by the US.
No doubt, as fossil fuel energy costs and larger toll at the household, community, and climate level increase, demand for Tesla's wondrously circular, pays-for-itself energy and transportation model will remain.
First, though, Tesla's Musk has two major issues to remedy, and sticker-shock pricing is not one of them, although it is a matter.
One, if it's going to work, builders need to map it in an integrative way into their start-to-completion workflows. It simply can not add complexity to an already intricately-balanced and imperfect assembly process. Solutions are not solutions if they fix problems in isolation.
For example, Bloomberg's Hull quotes a couple of Tesla's certified Solar Roof installers.
“The Solar Roof is not an easy product to install, it’s not a cheap product, and it’s going to take a lot of time to dial it in and bring the cost down,” said Mohammed Abdalla, the CEO of Good Faith Energy, another Tesla-certified installer in Texas.
The other – bigger – issue for Tesla's Musk in and among homebuilding executives we've spoken with is trust and reliability. Overpromising and under-delivering may work as a strategy in some sectors, but when it comes to the business of developing, designing, engineering, and completing a consumer household's biggest ticket durable item in their lifetimes, doing what you say you're going to do, when you say you're going to do it means something.
And not doing it – which is what many builders believe Musk's Solar Roof has been all about – means something else.