Elon Musk Admits Mistakes in Solar Roof Pricing, Plans Distributed Power Plant

Earlier this month, members of the Tesla Motors Club forum reported a drastic increase in the pricing for their solar roofs after they had already signed contracts to reserve their roofs. They were only given the choice of either paying the higher price or cancelling their reservation and getting their deposit back. They had been going back and forth about a possible class action lawsuit.

Now Tesla CEO Elon Musk admits that the company made “significant mistakes” that caused cost overruns and delays. He told investors in a quarterly earnings call that Tesla is struggling to keep up with the demand for solar roofs. The company has also struggled to assess the difficulty with installing the roofs and the complexity of each installation job can vary widely.

Elon Musk cites issues with the underlying roof structure, especially ones that would make it impossible to support the solar tiles, as a major reason for the sudden price spikes that the Tesla Motors Club members reported. It is possible for a roof to have issues under the existing tiles that might go unnoticed until it is inspected by a roofing contractor.

Distributed Power Plants in the Future?

When Tesla acquired Solar City in 2016, Elon Musk planned for the company’s solar power products to supplement the Tesla Powerwall. Musk said at the time that the new type of roof tile that SolarCity was working on at the time could capture more solar energy than normal solar panels once they actually had a working version. SolarCity had been owned by his cousins, though he served as chairman.

“We can’t do this well if Tesla and SolarCity are different companies, which is why we need to combine and break down the barriers inherent to being separate companies. … Now that Tesla is ready to scale Powerwall and SolarCity is ready to provide highly differentiated solar, the time has come to bring them together,” he wrote at the time.

Elon Musk now has plans to turn homes into a distributed power plant that can generate energy with a solar roof, store it in Powerwall batteries, and even send some of that energy to the electric grid. Tesla has unrolled a new company policy to essentially “bundle” its solar power and energy storage options instead of selling them separately. Its goal is to make it attractive enough to utilities to do it at scale.

He cited recent failures in power grids such as last summer’s rolling blackouts in California and Texas’ widescale power failure because the state had failed to winterize its power grid, which couldn’t handle the unusual cold snap last winter. A less centralized power plant could help mitigate this type of failures in the future.

“If this is not done, the utilities will fail to serve their customers. They won’t be able to do it,” he told investors.

In a Tweet, Elon Musk explained the reasoning behind the new “forced bundling,” saying that the system that combines a solar roof and Powerwall batteries can provide a seamless backup when the power goes out. In the earnings call, he cited studies by the Massachusetts Institute of Technology and Princeton University stating that utilities would have to double or triple their capacity to transmit power in order to reach net-zero carbon emissions when producing and transmitting electricity.

Utilities, of course, may not want to make that kind of investment and state and local governments may hesitate to spend the money to upgrade their infrastructure to allow for more environmentally friendly production of power. President Biden’s $1.9 trillion plan to upgrade infrastructure, which includes plans to upgrade power grids, may get whittled down through negotiations within Congress.

Elon Musk seems to see this as an opportunity to create distributed power plants that, naturally, include solar rooftops and Powerwalls added to as many homes as possible. It may be a matter of whether he can pull it off, considering that customers who have signed on the dotted line for a solar rooftop are already irked enough with him for jacking the price to discuss yet another possible class action lawsuit.