Economics of Tesla Solar Roof in Singapore (Part 1)
It’s been a while since I last wrote an article. I have traveled to 4 continents, 8 countries, and 15 cities. That’s almost like one season of Amazing Race!
A report from Electrek (https://electrek.co/2019/06/14/tesla-solar-roof-quote-price/) states that Tesla is current completing the third version of its Solar Roof. The real question is — does solar roof makes economic sense in Singapore?
The total system price is USD 85,314 = SGD 115,805 (on 14 July). The cost is to be recovered by the energy generated from the 9.45kW solar roof top. That accounts to approximately 17 MWh of energy generate per year, generously speaking. Forecasting energy prices 30 years in the future is impossible, no matter how good is the model and how smart is the quant. If there is any indication, the average quarter Singapore Power Tariff is 22.17 cent/kWh since 2014. That is to say, the growth in electricity tariff isn’t really significant, I would generously give a 2.5% annual growth rate in electricity price.
Another thing that happened to Singapore is the open electricity market (OEM), which gives people an even more affordable electricity prices! Which means that we can assume the price to go from 19 cent / kWh with 2.5% CAGR. Remember, I’m generous in my calculations.
Under a very optimistic scenario, if the energy tariff could go up to 38 cent / kWh 30 years later, the solar roof generate an energy value of SGD 143,860. That’s a net profit of SGD 28,055.
Putting things into perspective of financing, instead of investing in a solar roof, the CAPEX is deposited into the bank with 1% annual interest. You would get SGD 154,542 eventually. That’s a net profit of SGD 38,737.
Obviously putting the money in the bank with 1% Fixed Deposit would give you a better return than investing in solar roof.
The verdict — installing Tesla Solar Roof is not economically viable. Still, I highly recommend transition into renewable energy because climate change is very real, and we are probably the last generation to take real actions starting from lifestyle choices!
Part 2 of the article (https://medium.com/@howardlhw/economics-of-tesla-solar-roof-in-singapore-part-2-863007ab3dca?sk=493a47b0ddfa121b93090dcc023a0038) will focus more on getting the estimation more realistic and some adjustments to the model.
