To create an entire sustainable energy ecosystem, Tesla also manufactures a unique set of energy products that enable homeowners, businesses, and utilities to produce and manage renewable energy generation, storage, and consumption. Homeowners can install solar panels or Solar Roof to power their home using 100% renewable energy and then store that energy in Powerwall, which makes electricity available during peak energy-use periods and at night, while also providing power during grid outages.
In Q2 2020, Tesla reported that the company continued to develop its solar panels. Recently, the company made home retrofit solar even more affordable in the U.S., while also offering an increased efficiency panel. At $1.49 per watt, the average Tesla solar system is now one-third less expensive than the industry. The average customer buying a large system in California will likely offset their system cost with a reduced electricity bill in approximately six years.
However, Undecided with Matt Ferrell / YouTube, found that the cost of electricity from Tesla's solar panels could actually be lower than $1.49 per watt. In his video, he spoke about this in detail.
The cost of electricity depends on where you live in the US. The average cost of obtaining solar panels ranges from $2.51 to $3.31 per watt before receiving federal incentives. Therefore, a mid-sized installation will cost you $15,000 to $25,000 before incentives, or $11,000 to $15,000 after incentives.
According to Tesla CEO Elon Musk, the company sets the average cost of solar energy in the country at $2.88 per watt. Also, the company's new prices reduce the cost of the Tesla system by 30%. This means that the cost of Tesla solar panels is $2.01 before incentives. This cost in and of itself is incredibly competitive in the US solar market.
Tesla reduced soft costs: they simplified the sales and installation process, as well as the clearance process with the relevant government agencies. Instead of having a huge sales force, which undoubtedly increases the cost per watt, the purchase is made through a simple form on the company's website. And because the systems are pre-sized, all installation permits are much easier and faster to obtain.
Matt Ferrell filled out a form to see how much the solar system would cost him today. An 8.16 kW medium system would cost $2.01/watt. When you consider federal incentives for solar power in his area, Matt actually gets a price of $1.36/watt--even lower than Tesla officially announced.
As excellent as that pricing already is, Matt will see an even deeper discount yet, based on further incentives in his home state. The Solar Massachusetts Renewable Target (SMART) Program is the DOER's incentive program established to support the development of solar in Massachusetts. Thanks to this program, owners of solar systems receive a series of payments. In 10 years, Matt will receive $2,852 cash back, which means that such the solar panel system he chose will ultimately cost him $1.02 per watt.
Tesla's approach changes the game. The company has reimagined a solar market that has now been around for many years. This has helped bring prices down to the point that, even in countries and regions where there are no federal incentives, installing solar systems is still affordable. By reducing the cost of energy per watt, Tesla was able to make solar accessible to many more customers.
The company's solar and energy business has enormous potential. This growth is often underestimated by analysts and critics, though in reality, Solar/Energy will likely expand to the same size as or even surpass Tesla's automotive business.
© 2020, Eva Fox. All rights reserved.
Article edited by @SmokeyShorts, you can follow him on Twitter
About the Author
Eva Fox
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.
