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Will Tesla's New Roof Disrupt the Solar Industry?

Posted by Mary Angela Cortes | November 15, 2016

Tesla recently released solar tiles that offer an alternative to solar panels and traditional roofing shingles, providing an aesthetic and technical improvement to appeal to wider audiences.

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Image credit: AutoBlog

On October 28, Tesla CEO Elon Musk introduced the latest addition to its line of environmentally friendly products: solar roof tiles. They are made of unbreakable quartz, and have four distinct styles.

But Tesla is not the first company to launch a solar roof: Dow Chemical released a line of solar shingles to the market in 2011, which they eventually halted in June this year.

What sets Tesla apart from Dow Chemical?

Prior to its merger with DuPont, Dow Chemical reorganized its businesses and pulled the plug on its Powerhouse Solar System, as it did not draw enough customers and as a result of the restructuring. Dow’s solar shingles, like Tesla’s solar tiles, have building-integrated photovoltaics (BIPV) that incorporate solar modules into construction materials. However, it was difficult to sell due to lack of efficiency.

Tesla’s solar tiles, on the other hand, offer durable roof shingles that can withstand the weight and pressure of a kettlebell. These solar tiles, like Dow’s solar shingles, generate electricity from the sun’s rays, but what sets it apart from other brand is that it also stores energy in the Powerwall 2 battery in case of outages. Although details on the pricing and efficiency have not been disclosed yet, Musk promised that the overall cost would still be less than the cost of traditional roof installation combined with the cost of conventional power sources, and has 98 percent of the efficiency of regular solar panels. In addition, studies also claim that solar energy is now cost competitive with a fuel-based grid power in the US, as the price has plunged in recent years.

Who is the target market?

With the sleek design of its solar tiles, Tesla aims to attract those who have disposable income available to renovate their homes. Although the company gave no details on the cost, one would think of the upper class as its target market considering where the launching was heldon the luxurious set of Desperate Housewives at Universal Studios, Hollywood.

The company also provides an option for environmentalists, individuals and enterprises alike, or simply those who want to build self-sustaining homes and infrastructures. This market would also include those who are in the real estate business—for instance, those building a subdivision, which may feature solar roof tiles in its homes and may appeal to the families who prefer a more sustainable environment. This was a market tapped by Dow’s solar shingles in 2015.

Lastly, the solar roof tiles would appeal to those who already own Tesla products, such as its electric vehicles and Powerwall. Customers can take advantage of the solar tiles if they also own the Powerwall 2, which was launched simultaneously. The Powerwall 2 is said to be a major upgrade from and has more than twice the capacity of the original with a cheaper price and a ten-year warranty. There is also a cross-selling opportunity with SolarCity 300,000 solar customers.

Tesla will start rolling out the product next year, if their supply chain holds up.It is working with Panasonic on the production of solar cells and 3M on coatings. On November 17, shareholders will vote on Tesla’s acquisition of SolarCity, the biggest rooftop installer in the US.

Next up: Post-Election Supply Chain Predictions