Economics of Tesla Solar Roof in Singapore (Part 3)
This is a continuation of the article from part 1 (https://medium.com/@howardlhw/economics-of-tesla-solar-roof-in-singapore-part-1-485710f3f62) and part 2 (https://medium.com/@howardlhw/economics-of-tesla-solar-roof-in-singapore-part-2-863007ab3dca). Please read at least part 1 before continue reading.
The main motivations for residential owners to use renewables are financial motivations or environment motivations. Often, the financial motivations are the key factors driving purchasing decisions. As it was previously discussed, the economics of Tesla solar roof is not feasible. The question is — what can be done to make it more feasible?
Targeted price: Considering the hefty upfront investment required, let’s assume that the end-user expects a 2% annual return from the upfront investment, this put a targeted savings of SGD 89,847 over 30 years, or monthly savings according to the following chart (with 2.5% annual inflation)
It’s simple factory economics, to make the solar roof “profitable”, you either increase the revenue (energy generation) or reduce the cost. Note that leveraging finance with the bank isn’t an option since the impending interest rate would be higher.
Increasing the energy generation isn’t quite possible since it’s limited by technology and weather conditions — where the end-user has no control.
The only parameter the end-user can adjust is the cost reduction. As a huge bulk of the cost comes from Tesla, a reverse calculation from the targeted saving would indicate the “targeted” selling cost. The breakeven point for Tesla Solar Roof system is SGD 81,009, which is approximately 30% reduction is the quoted price of SGD 115,805.
Tesla would need to reduce the price for solar roof system by at least 30% to make it attractive for the Singapore market.
As the current consideration is a combined system of solar roof + power wall + roof repairs, the alternative consideration is the usefulness of the power wall and whether it helps in the economics. Let’s start by removing the power wall as part of system cost. That means the targeted solar roof + roof repairs price is SGD 67,367, putting the solar roof price at SGD 52,938. Note that from the quotation, the cost of solar roof is SGD 87,734.
Tesla would need to reduce the price of solar roof by 40% to be attractive to Singapore market, assuming all energy generated is locally consumed.
Tesla solar roof is a novel idea in Building Integrated Photovoltaic (BIPV). As an engineer, I totally love the idea behind this. Without getting the economics right, it would be extremely difficult for Tesla to penetrate the solar roof into Singapore market. Granted, Singapore would not be their target market in the first place.
