2017 Investor Roundtable:General Discussion

[sahanim]

Fred Lambert of Electrek discusses today's Tesla blog: Tesla announces new electric grid services by bundling Powerwalls and Powerpacks

you're a hawk. good share!

 

[Reciprocity]

Cost doesn't remain static.

I repeat: not being economically (or otherwise) viable currently is different than stating there's no need.

Tomorrow's batteries will have 50% more energy density for less cost than today's. Are you going to suggest there's no need ti implement larger than what we have today simply because of charge speed improvements?

Who says I dont need a Yacht? No one needs 150kWh battery today. A lot of people want 150kWh battery, sadly only 2% of them could actually afford or justify it. Who commutes 200 miles each way in a blizzard, uphill both ways and happens to work some place that has no electricity? I kid, but really.. no one "needs" 150kWh and none is available anyway and wont be for 5 years. In 5 years when 150kWh battery packs are available the biggest selling car will be the one with the <=100kWh pack that's much cheaper/lighter. More people will be able to afford 150kWh because it will be cheaper, but you will not see that as the minimum pack as you would seem to think it must be because it might be cold, uphill both ways and traffic flowing at 80mph with people honking if you go any slower.

 

[mmd]

It is curious that Tesla is not forthcoming about the efficiency of their solar roofs. I will try to estimate this.

Silevo and I believe Panasonic too have achieved at least 22% panel efficiency and 24% cell efficiency. So let's assume that 20% shingle efficiency is plausible. Standard insolation is 1 kWp/m^2, so a square foot would be about 93Wp. At 20% efficiency, the solar shingle would provide 18.6 Wp/sqft.

Now the cost. I believe we need to separate the cost of the roof from the cost of the solar to make a proper comparison with competing solar systems. So the net price before ITC is $31 = $42 - $11 per sqft and net price after ITC is $18.4 = $42*70% - $11. I believe this net price includes the inverter and wiring as it is an installed cost. I am netting out $11/sqft as this price for this roof without solar.

Thus, I arrive at a fully installed cost of solar at $1.67/W before ITC and $0.99/W after ITC. For the next few years within the US, the after-ITC price is the relevant one. Competitive rooftop solar in the US has been in range of $3 to $4.5 per W, while competitive utility scale solar is in range of $1 to $1.5 per W.

It is highly unlikely the cost on Tesla's calculator includes inverter, wiring, etc. Is there something you are basing this on? Otherwise, we have to wait till someone actually places a firm order and gets a real quote.
IF the price really includes all that, then expect hugely negative margins, as other solar companies are going bankrupt selling solar at those prices of $3/watt.

There is also significant doubt if ITC can be claimed on the full $42, as the tile has other purpose besides energy generation. There are some comments from @cpa in the solar roof thread, that you should check out. Using that kind of stuff, manufacturers will start embedding a tiny solar cell in each of their building products and lower the product cost for consumers by 30% riding on tax credits

Your efficiency expectation may be too high. What kind of cells are used in the solar tiles? The thin film cells are less efficient. This is one reason why Dow pulled the plug on their solar shingles. I'm quite sure, if the efficiency was that good, Elon and Tesla would have put that up on top.

The other factors mentioned by some, like why people will buy cheap asphalt roof vs. more durable tile/slate roofs, haven't changed in years. Pretty sure people have their reasons. Like in the example above, if someone is already stretched to build a 7100 sq. ft house, he or she will rather not spend another fortune just for the roof If the house is destroyed by tornado or earthquake, the long life of its roofing material is of no use.
So, we need to stick with the fact that only 5% of total new roofs is the target market for the roof tile product. Shingles buyers are not going to change over to install even more expensive solar tiles.

 

[aubreymcfato]

Friday fun OT:
Together, we can prevent the future from happening!

It's an extremely curated satyrical website. Really great.

 

[FredTMC]

Here's my stupid question for today:
(Possibly already answered up thread)

Does Elon have permits to drill under greater LA?

I get he can drill around underneath his parking lot, but other everyone else's property? I'm ignorant of laws here... mineral rights, etc

 

[Curt Renz]

 

[winfield100]

Today's Tesla Blog: The Next Step in Energy Storage: Aggregation

ie Virtual Power Plants, VPP's
2,000 x 14kW = 2,800,000 watt hours or 2.8 mega watt

 

[Snapdragon III]

I really like the latest blog post about the power wall utility program. I find it very reassuring, that while the progress on rolling these out has seemed excruciatingly slow, there has actually been a lot of work going on behind the scenes. If utility partnership programs where the customer only pays $15 a month could become common, they could sell a lot of units.

 

[Ameliorate]

Generally speaking, yes, I agree after looking at your logic/math that the more expensive the roof is, the lower percentage labor comprises of the total cost, as labor is a bit of a set cost whatever the quality of the roof material. I was looking at lower-priced roofing jobs as I wasn't expecting ~$60k-80k+ price given Elon's previous comments.

I'm seeing slightly higher numbers for assumptions though (for example, crews on avg have 4 roofers who are paid $20-35/hr depending on experience and location, so say $25 avg since only one foreman needed, and benefits comprise ~31.6% of total pay per BLS, and jobs can take up to two weeks for tiles and larger homes = $146/hr x 8hr x 7 to 14 days = ~$8,200 to ~$16,400). Also keep in mind that the homebuilding industry is growing double-digits and the industry's #1 problem right now is lack of skilled labor, which isn't likely to ease up anytime soon with the current administration's immigration policy as well as the multi-decade low and still-declining unemployment rate. So maybe we can agree on ~10-15% of gross revenue? Still below my original estimate due to Solar Roof hardware being higher quality/price. I'm also trying to estimate labor cost using "per square" approach, but I need to spend more time on that one.

Two points that hopefully we can agree on: (1) there are way too many unknowns at this point to get excited about Solar Roof's contribution to Tesla's bottom-line in the next two to three years, and (2) labor comprises a higher percentage of gross revenue vs. automotive segment, and labor is unlikely to lend itself to Alien Dreadnaughting. It seems to me that the keys to 25% margin are: ramp up Gigafactory 2 to 1GW+ on the hardware front and somehow slash days needed for installation for v2/v3 of the Solar Roof via some sort of a design innovation which can be patented.

I have another interview set up today (this one with a GC), so let me know if you'd like me to ask anything specific.

Thank you for pushing my thinking on this; I appreciate it more than you can imagine.

Mostly, yes. It's just installation time that dictates cost of hourly employees. (incl old roof removal, not sure if the calculator mentions cedar roofs but removing cedar shingles and replacing strapping with plywood could easily double the install time) I've never dealt with roof tiles, installing or removing. Since these roofs target the higher end homes I should have considered the demo costs of a high end roof instead of asphalt.
99% of roofs where I live are asphalt cedar or metal.

My questions would be:
Tear off time for a tile/slate roof versus asphalt
Man hours to install tile roof on...3000 sq ft home or whatever you feel is the average clientele here (This may prove to be completely irrelevant depending on Tesla system)
Average crew wages in US, foreman + apprentices/labor
Is it difficult to find workers? (I suspect it is, meaning they have to offer competitive compensation) roofing is tougher than most jobs, not for everyone.

It's your interview =) if they benefit you by all means ask away.

In hindsight 6-12% sounds really low for a roof install. 15% seems more reasonable. The percentage was less a concern to me than trying to hammer home that the percentage comes from gross revenue as opposed to from COGS.

Hah, I bet in three years the revenue from roofs would be very significant to Tesla as it currently stands. However after ramping auto and TE three years into the future, a few more billion wont be very noticeable.
Yes, humans are slow, robots that go out into the field to perform work seem a ways off not worth considering yet.

You're most welcome, was fun discussing. For reference, that's what I do for a living, i'm a builder as well. I certainly don't specialize in roofing, and geographic locations matter so what I perceive as typical could be skewed. Cheers.

 

[Zaxxon]

I really like the latest blog post about the power wall utility program. I find it very reassuring, that while the progress on rolling these out has seemed excruciatingly slow, there has actually been a lot of work going on behind the scenes. If utility partnership programs where the customer only pays $15 a month could become common, they could sell a lot of units.

Agreed. Aggregation is a 'force multiplier' of sorts with regards to home energy storage. It has the potential to greatly increase the impact of all those batteries by giving them intelligence, while simultaneously lowering the cost to consumers and/or raising revenues to Tesla. Glad to see that they are not only working on this but have a pilot program starting up already. I had penciled in early 2018 to start seeing this type of project. If Green Mountain isn't the only one in the works, this could quickly become a valuable part of Tesla's energy business.

 

[MP3Mike]

My relatively uneducated opinion is that: while only a oart of a tile has solar cell, they overlap, so effectively that patch of roof has close to 100% solar cell exposed.

I think that is highly unlikely. The tiles don't overlap on the left/right, only the top and bottom. And if you look closely at the picture on the Tesla site you can see two separate solar cells in each tile with borders around them. But maybe that would just be a 5-10% reduction in active area?

 

[Ovulation]

Hah, I bet in three years the revenue from roofs would be very significant to Tesla as it currently stands. However after ramping auto and TE three years into the future, a few more billion wont be very noticeable.
Yes, humans are slow, robots that go out into the field to perform work seem a ways off not worth considering yet
.

Yes I don't think they will spend R&D money on developing roofing robots, like you said, such money is better spend on stuff with higher revenue potential than roofing*. I think in the non-US (and I guess parts of the US) Tesla will probably hand out the solar roof to local installers and they will put it up.

* they should probably go for, I don't know, autonomous surgical robots, more money in that field

Just look it up ... Sure enough they are working on it LOL

 

[neroden]

Think about it this way : it is no coincidence that Tesla is not releasing something as basic as panel efficiency, nor allowing a detailed look into how they get to the presumed cost savings.

I won't buy without a panel efficiency number or a wattage number. I expect them to release it before purchase. 6% is no good.

The solar roof is a total distraction. It won't bring in meaningful revenue for another 18 months, and without meaningful volume, profit margins are going to be slim. Powerwall debacle all over again.

Powerwalls are, of course, doing very well now. I think we can expect Solar Roof 2.0 within 12 months.

 

[neroden]

I think that is highly unlikely. The tiles don't overlap on the left/right, only the top and bottom.

Is it possible that, like slate, all of these tiles are twice as long as they appear? So that each tile extends entirely under the next row up of tiles, thus waterproofing under the seam?

 

[neroden]

Here's my stupid question for today:
(Possibly already answered up thread)

Does Elon have permits to drill under greater LA?

No. None.

 

[FredTMC]

No. None.

Yeah. So seems to me that it could take years to get permits

 

[Yggdrasill]

ie Virtual Power Plants, VPP's
2,000 x 14kW = 2,800,000 watt hours or 2.8 mega watt

No. Your units are all wrong. A powerwall is 14 kWh, or 7 kW peak/5 kW continuous.

That works out to:

1. 2000 x 14 kWh = 28 MWh
2. 2000 x 7 kW = 14 MW
3. 2000 x 5 kW = 10 MW

1 is energy storage capacity, 2 is peak power and 3 is continuous power.

 

[Snapdragon III]

Is it possible that, like slate, all of these tiles are twice as long as they appear? So that each tile extends entirely under the next row up of tiles, thus waterproofing under the seam?

It could be, but my guess is there is a little stainless steel flashing strip that clips on to the top of the tile in the center to cover the gap in the tiles above it. It would save a ton of shipping and material weight over making the tiles twice as big. It also seems like it would make it easier to remove a single tile in the middle of the roof if there was a problem and it needed replacement.

 

[jhm]

We don't know how much of each tile is usable solar cell area, so not all the area of the $42 tiles will produce electricity. Or are you lumping that into your 20% shingle efficiency?

Yes, they could go with a cell that has 24% or higher efficiency. So assuming 20% at the tile level allows for 1/6 of the exposed area to be lost to the design of the tile.

This may be a bit optimistic, but we'll have to wait to see what Tesla publishes. Of course, I do expect Tesla to be aggressive in maximizing efficiency.

So are they quiet about this because they really don't have good efficiency? Or are they waiting to surprise investors at a later time? I'm hoping they are just holding cards close to chest. If they announce tile efficiency near 20%, I think it will be a big deal for the stock. But even 10% tile efficiency would be highly competitive at $2/W.

One other thing, the particular tile designs may well have different efficiencies. Smooth may be best, while adobe could be a very wasteful design with the curved portion. So aesthetics could cut into amount of solar one can put on a given roof.

 

[jhm]

Do those utility solar costs include delivery or just supply? I know for me, the delivery is more the supply cost. I do but have solar yet, waiting for more info like you provided on the solar tiles. I have quotes almost identical to what you are showing so this is extremely timely for me.

I believe the convention around pricing utility solar is to include all cost, including interconnection and any incremental transmission lines need to connect with the transmission grid. But the cost of the shared transmission and distribution network, i.e., the grid, is not included.