Solar Roof, big price increase

[holeydonut]

IMO, this seems to violate 16 CFR 233 with deceptive pricing practices. While no private attorney will take this type of case on (your civil damages are too small), you can report Tesla/SolarCity to the FTC and California Attorney General.

I haven't seen one of those Tesla solar roof prepayment agreements, but I'd imagine it consists of a highly detailed vendor contract and a SEIA purchase disclosure. The language of the contract typically leaves the installer "outs" if they find something that results in a cost that is found during the installation process. But the contract typically lists exclusions; and places the onus on the installer to actually find a real, unforeseen element that results in a reasonable price increase. Like if they find dry rot, busted rafters, asbestos that needs to be abated, etc. The contractor cannot simply say "it costs 50% more to install now because why not."

Did you guys already sign one of those?

Here's the typical SEIA disclosure; while it is not a real "contract" it is intended to supplement the contract and provide you with reasonable costs to inform your purchase decision.

https://www.seia.org/sites/default/files/SEIA%20Solar%20Purchase%20Disclosure%20Form%20-%204-7-17.pdf

Some of Tesla's dealings are kind of sus... like the Cybertruck deposit is just "put $100 down and maybe you'll get something; maybe you'll get nothing" and the price is just a guess. I hope the solar roof wasn't like that. I wonder if Elon is actually proud at delivering the worst service but the best tech. It's like a form of min-maxing.

 

[phsoccer]

I got the same email tonight and my price increased by 68%. I had my inspection yesterday and I was getting excited that they would be installing my roof soon. At the new price, it is just not worth it and I'll just replace my current old asphalt roof with another asphalt roof. I'm very irritated and angry with Tesla right now. I had signed all the paperwork in good faith and had all the funding lined up. It feels like bait and switch. I thought they were a better company than this.

 

[Singularity]

Yikes, my quote went up 40%. Time to re-price other options, that's a tough pill to swallow.

What's interesting is that they just hard-court pressed me to sign over the past week (even misrepresenting the cancellation provisions when I'm still going through HOA approval process); however, they are apparently not honoring signed agreements anyway so I guess I can't feel too bad about my delay.

 

[Physicslawyer]

How is this not breach of contract on the part of Tesla?!? I would assume you could sue for specific performance of the contract.

 

[Kandiru]

Don't forget the brutal inflation guys. Have you been to a hardware store lately, prices have quintupled or even more for basic construction materials.

 

[CapitalTM3]

Tesla solar needs to do what they do with their vehicles. If you sign a purchase agreement/make deposit etc...then it needs to lock you into the price as advertised.

I have a feeling that Tesla solar just kicked themselves squarely in the nuts on this one—especially with competition so close on their heels. I’d imagine a ton of folks are going to back out now. I’ll have to ask my neighbor about his pending installation in may—I have a feeling that he’d probably pull the plug on this as well.

 

[wjgjr]

IMO, this seems to violate 16 CFR 233 with deceptive pricing practices. While no private attorney will take this type of case on (your civil damages are too small), you can report Tesla/SolarCity to the FTC and California Attorney General.

I haven't seen one of those Tesla solar roof prepayment agreements, but I'd imagine it consists of a highly detailed vendor contract and a SEIA purchase disclosure. The language of the contract typically leaves the installer "outs" if they find something that results in a cost that is found during the installation process. But the contract typically lists exclusions; and places the onus on the installer to actually find a real, unforeseen element that results in a reasonable price increase. Like if they find dry rot, busted rafters, asbestos that needs to be abated, etc. The contractor cannot simply say "it costs 50% more to install now because why not."

Did you guys already sign one of those?

Here's the typical SEIA disclosure; while it is not a real "contract" it is intended to supplement the contract and provide you with reasonable costs to inform your purchase decision.

https://www.seia.org/sites/default/files/SEIA%20Solar%20Purchase%20Disclosure%20Form%20-%204-7-17.pdf

Some of Tesla's dealings are kind of sus... like the Cybertruck deposit is just "put $100 down and maybe you'll get something; maybe you'll get nothing" and the price is just a guess. I hope the solar roof wasn't like that. I wonder if Elon is actually proud at delivering the worst service but the best tech. It's like a form of min-maxing.

Unless there has been a change (since the last solar roof agreement I signed in May, 2020,) Tesla does not use that SEIA form, but it is a similar (possibly identical) set of disclosures organized in another way. Of course, they note the disclosures are not a substitute for the contract. The contract is actually relatively short, and, as I noted in one of these threads, does only appear to provide an out for Tesla in case of "unforeseen conditions at the installation location" when there are no other changes to the design being made, and that seems not to apply here. That said, it was mentioned that Tesla might have inserted new provisions about pricing changes, but I have not seen that language posted yet.

I agree that some of Tesla's business practices are kind of questionable. When they were a smaller company, or even just when the solar division was smaller, they could probably get away with it. Additionally, in the past, they tended to resolve more issues in favor of the customer, including letting customers choose between old and new pricing and absorbing costs for some extras discovered after the agreement was signed (even when they could rely on the "unforeseen conditions" clause.) Now, however, it seems like they are taking a much harder line on a lot of things. And, while that is their choice as a company, they need to make sure that their contracts match their actions or there may be a point where this creates a legal headache.

 

[nicholb]

The bold section of the purchase agreement looks like an out for Tesla. To me it basically says if Tesla causes a price change your only options are accept or cancel. Still disappointing. I was really hoping to get it installed this year but the new %40 increase makes it completely out of the question.




2. Contract Price. Your Price Sheet shows the price of your System and its installation (“Contract Price”). The Contract Price includes permitting fees. If Tesla encounters unforeseen conditions at the installation location or causes a change to the solar portion of your Solar Roof, you will receive an updated Price Sheet to accept or reject. If you reject the updated Price Sheet, this Agreement will terminate. Upon termination we will return your Order Payment and Site Survey / Design Payment to you unless the Contract Price decreases in the updated Price Sheet. If you request a change to your System, you will receive an updated Price Sheet to accept or reject. If you reject the updated Price Sheet, this Agreement will terminate and your Order Payment and Site Survey / Design Payment will not be refunded to you.

 

[jboy210]

Tesla has done the same things with cars. $10K increase for model X. They are definitely focusing on profit margins.

FWIW, these prices are close to what some of us paid in the 2019 before the big SolarRoof price cuts.

 

[wjgjr]

The bold section of the purchase agreement looks like an out for Tesla. To me it basically says if Tesla causes a price change your only options are accept or cancel. Still disappointing. I was really hoping to get it installed this year but the new %40 increase makes it completely out of the question.




2. Contract Price. Your Price Sheet shows the price of your System and its installation (“Contract Price”). The Contract Price includes permitting fees. If Tesla encounters unforeseen conditions at the installation location or causes a change to the solar portion of your Solar Roof, you will receive an updated Price Sheet to accept or reject. If you reject the updated Price Sheet, this Agreement will terminate. Upon termination we will return your Order Payment and Site Survey / Design Payment to you unless the Contract Price decreases in the updated Price Sheet. If you request a change to your System, you will receive an updated Price Sheet to accept or reject. If you reject the updated Price Sheet, this Agreement will terminate and your Order Payment and Site Survey / Design Payment will not be refunded to you.

That is a really awkward wording, but I don't read it as causing a price change but a change in the amount of solar (the "solar portion".) That said, I suppose Tesla could add/remove one shingle from every plan, which is a change to the solar portion of your Solar Roof. It certainly seems like the kind of thing that would be debated in the event of a dispute, both for the meaning, and for whether Tesla was acting in good faith. Of course, as a potential customer, I can completely see why most would just walk away.

 

[FloridaEng]

We also have a price contract, permits completed, new insurance and a bank loan, just waiting for an on site inspection. Passed up earlier install dates for metal and shingle roof so we can save the world with my Tesla solar roof. Now hurricane season is approaching and we need a roof. When Electek reported the price increase on 3/29 I called Tesla and they told me my price would not go up because I had a price agreement and we are looking at an install date around May. I will give my project adviser a call tomorrow, but it sounds like this is a big fail on Tesla part. We lose out on a great solar roof and Tesla will not recoup their employee time/cost and gain a future customer (roof or car). I'm sure my power company will be happy.

 

[holeydonut]

That is a really awkward wording, but I don't read it as causing a price change but a change in the amount of solar (the "solar portion".) That said, I suppose Tesla could add/remove one shingle from every plan, which is a change to the solar portion of your Solar Roof. It certainly seems like the kind of thing that would be debated in the event of a dispute, both for the meaning, and for whether Tesla was acting in good faith. Of course, as a potential customer, I can completely see why most would just walk away.

Yeah, pundits usually cite the fact that businesses who employ bait and switch tactics typically lose business when word gets out on what they are doing. As customers simply walk away or share negative sentiment about a business, then the business suffers damage without the government imposing further penalty. So bait and switch becomes in itself unprofitable and businesses will drop the practice in their own best interest. Many advocates of "consumer protection" actually do not want the Government to enforce bait and switch laws.

That is why typically the bait and switch is typically only enforced on employment matters where the employer backs out or materially changes the salary/role after the candidate has quit their old job. Individuals can suffer great damage, and these typically are the only types of bait and switch that are of any value to private law firms.

But I think it's worth a shot to see what the local government attorneys or FTC have to say about Tesla's pricing practice. Growth companies like Tesla and Sunrun have their business valuation based on revenue multiples. For every con they can pull off, they gain 3x to 10x the benefit on the back end in the form of inflated stock value. These companies have an incentive to develop and adopt aggressive business practices. Elon doesn't become rich because of some long-run-economic theory. He got rich because the value of each sale of his products gets magnified many times over.

I think Tesla has this tactic where they are shooting for about a 75% "win rate" with their customers. They only need to appease 75% of people to create a base of supporters willing to provide good word-of-mouth and support the brand. The 25% people who get sour experiences are just labeled the "out of touch minority" so their dissenting voice gets drowned out by the majority. That is why IMO the self-policing of the bait and switch practice doesn't work. Tesla can job a huge number of people and not suffer much consequence so long as Tesla proponents remain loud enough.

 

[gpez]

Yeah, pundits usually cite the fact that businesses who employ bait and switch tactics typically lose business when word gets out on what they are doing. As customers simply walk away or share negative sentiment about a business, then the business suffers damage without the government imposing further penalty. So bait and switch becomes in itself unprofitable and businesses will drop the practice in their own best interest. Many advocates of "consumer protection" actually do not want the Government to enforce bait and switch laws.

That is why typically the bait and switch is typically only enforced on employment matters where the employer backs out or materially changes the salary/role after the candidate has quit their old job. Individuals can suffer great damage, and these typically are the only types of bait and switch that are of any value to private law firms.

But I think it's worth a shot to see what the local government attorneys or FTC have to say about Tesla's pricing practice. Growth companies like Tesla and Sunrun have their business valuation based on revenue multiples. For every con they can pull off, they gain 3x to 10x the benefit on the back end in the form of inflated stock value. These companies have an incentive to develop and adopt aggressive business practices. Elon doesn't become rich because of some long-run-economic theory. He got rich because the value of each sale of his products gets magnified many times over.

I think Tesla has this tactic where they are shooting for about a 75% "win rate" with their customers. They only need to appease 75% of people to create a base of supporters willing to provide good word-of-mouth and support the brand. The 25% people who get sour experiences are just labeled the "out of touch minority" so their dissenting voice gets drowned out by the majority. That is why IMO the self-policing of the bait and switch practice doesn't work. Tesla can job a huge number of people and not suffer much consequence so long as Tesla proponents remain loud enough.

There's so much weird/speculated/incorrect stuff in here about the economics of Telsa's business model and how the stock market works mixed in with some politics (as well as misunderstanding what "bait and switch" actually means: it requires changing the product offered not simply increasing the price) I'm not sure where to start or even if trying to help is relevant to this thread... That said, I default to Hanlon's razor which is ""never attribute to malice that which is adequately explained by stupidity". This feels very stupid on Tesla's part.

IANAL but I would find it hard to believe that Tesla could squeak their way out of their initial agreement based on an "unforeseen circumstances" clause but then applying it so broadly based on how many people here have gotten the notice. Maybe (?) they're claiming the labor and materials shortage is "unforeseen" or more specifically due to the reported polysilicon shortage? Either way, I'd be in touch with my lawyer to see what options are out there before throwing in the towel and cancelling the install. I'm opposite of my forum friend @holeydonut in terms of using a government agency to enforce pricing practices however I very firmly believe in the criticality of strong and enforced contracts, something that needs to be looked at by a third party (judge or arbiter).

 

[wjgjr]

IANAL but I would find it hard to believe that Tesla could squeak their way out of their initial agreement based on an "unforeseen circumstances" clause but then applying it so broadly based on how many people here have gotten the notice. Maybe (?) they're claiming the labor and materials shortage is "unforeseen" or more specifically due to the reported polysilicon shortage? Either way, I'd be in touch with my lawyer to see what options are out there before throwing in the towel and cancelling the install. I'm opposite of my forum friend @holeydonut in terms of using a government agency to enforce pricing practices however I very firmly believe in the criticality of strong and enforced contracts, something that needs to be looked at by a third party (judge or arbiter).

The clause is specifically "unforeseen conditions at the installation location", so I cannot see any way that would apply to the apparent across-the-board increase. It seems like the other clause cited above about "causes a change to the solar portion" might have more weasel room for Tesla.

I would agree that this is something where it would be good for somebody to pursue this through the courts and/or arbitration, but I completely understand why potential customers would not want to go through the hassle, and I expect Tesla is counting on that. It may even be the case that they end up agreeing to the original pricing for those who push hard enough or threaten litigation, assuming it will be a small minority of the potential customers whose contract prices were increased.

 

[gpez]

The clause is specifically "unforeseen conditions at the installation location", so I cannot see any way that would apply to the apparent across-the-board increase. It seems like the other clause cited above about "causes a change to the solar portion" might have more weasel room for Tesla.

I would agree that this is something where it would be good for somebody to pursue this through the courts and/or arbitration, but I completely understand why potential customers would not want to go through the hassle, and I expect Tesla is counting on that. It may even be the case that they end up agreeing to the original pricing for those who push hard enough or threaten litigation, assuming it will be a small minority of the potential customers whose contract prices were increased.

Still not a lawyer

"If Tesla encounters unforeseen conditions at the installation location or causes a change to the solar portion of your Solar Roof, you will receive an updated Price Sheet to accept or reject." could be read as:

"If Tesla"
"encounters unforeseen conditions at the installation location"
or
"causes a change to the solar portion of your Solar Roof"
"you will receive an updated Price Sheet to accept or reject."

Meaning "If Tesla (...) causes a change to the solar portion of your Solar Roof you will receive an updated Price Sheet to accept or reject." The "causes a change to the solar portion" seems very broad.

Curious if this caused any flags to get raised for folks that had a lawyer review their Purchase Agreement? (I did not go with Tesla directly for my panels + Powerwall but did have my lawyer review the contract I had with my local installer).

 

[baycoder]

I got the same email yesterday. My total price increased from $42k on the signed contract to $62k. I was shocked that big companies like Tesla would do such kind of thing to its customers.

I plan to be going through all the dispute/complaint process on this and see what will happen. If anyone here is a lawyer and willing to lead a class legal action, I would undoubtedly join.

 

[wjgjr]

Still not a lawyer

"If Tesla encounters unforeseen conditions at the installation location or causes a change to the solar portion of your Solar Roof, you will receive an updated Price Sheet to accept or reject." could be read as:

"If Tesla"
"encounters unforeseen conditions at the installation location"
or
"causes a change to the solar portion of your Solar Roof"
"you will receive an updated Price Sheet to accept or reject."

Meaning "If Tesla (...) causes a change to the solar portion of your Solar Roof you will receive an updated Price Sheet to accept or reject." The "causes a change to the solar portion" seems very broad.

Curious if this caused any flags to get raised for folks that had a lawyer review their Purchase Agreement? (I did not go with Tesla directly for my panels + Powerwall but did have my lawyer review the contract I had with my local installer).

That is how I parse the sentence, and why the second clause seems to give them a possible out, depending on what exactly it means. I (also not a lawyer) had understood it to be intended to cover cases - which are especially common with solar roof - where reviews (including customer review/requests, overhead imagery, on-site inspections, and local codes) require a change to the amount of solar on the roof. But, I certainly could be wrong, and, in any case, I find the wording unclear.

Where it gets interesting to me is that it is not clear there was any change to the solar portion in these contracts - that is, if customers are still getting the same sized system with the same planned layout of solar tiles, it seems to me the solar portion has not changed. In fact, the discussion on this forum (which is certainly not proof) and Tesla adding "roof complexity" to the pricing model suggest it may be the non-solar portion that is driving the price increase. For those with a signed agreement, if Tesla included a breakout of the solar and non-solar portions, it would be interesting to see where the increase was.

 

[wjgjr]

I got the same email yesterday. My total price increased from $42k on the signed contract to $62k. I was shocked that big companies like Tesla would do such kind of thing to its customers.

I plan to be going through all the dispute/complaint process on this and see what will happen. If anyone here is a lawyer and willing to lead a class legal action, I would undoubtedly join.

One of the potential barriers to this is that Tesla contracts included (and I am guessing still do) an arbitration clause that you have 30 days to opt out of. If not, you are limited to arbitration or small claims, and cannot bring class actions. I do not claim to know all the rules about when you can get around that portion of the agreement, but it might be an issue for those over 30 days. (And for those under, it makes sense to review how to opt out, if desired.)

 

[holeydonut]

There's so much weird/speculated/incorrect stuff in here about the economics of Telsa's business model and how the stock market works mixed in with some politics (as well as misunderstanding what "bait and switch" actually means: it requires changing the product offered not simply increasing the price) I'm not sure where to start or even if trying to help is relevant to this thread... That said, I default to Hanlon's razor which is ""never attribute to malice that which is adequately explained by stupidity". This feels very stupid on Tesla's part.

IANAL but I would find it hard to believe that Tesla could squeak their way out of their initial agreement based on an "unforeseen circumstances" clause but then applying it so broadly based on how many people here have gotten the notice. Maybe (?) they're claiming the labor and materials shortage is "unforeseen" or more specifically due to the reported polysilicon shortage? Either way, I'd be in touch with my lawyer to see what options are out there before throwing in the towel and cancelling the install. I'm opposite of my forum friend @holeydonut in terms of using a government agency to enforce pricing practices however I very firmly believe in the criticality of strong and enforced contracts, something that needs to be looked at by a third party (judge or arbiter).

Bait and switch and deceptive pricing probably overlap and can take on many forms. Since these price changes aren't related to the home/site and more to do with the "change to the solar portion of the roof" it's tough to tell if Tesla is asking for more $$$ because of a straight price adjustment or a modification to their product offering. Regardless of semantics involved... the problem here is Tesla's advertising low prices that cannot/will not be honored to the determent of homeowners. The problem should not the specific words I used in a forum post.

I don't want the government to enforce the contracts that Tesla entered into for the TMC members. I want the government to impose the penalties they are allowed to in an attempt to hold Tesla accountable in some manner for their business practices. Heck, just having word that Tesla is being investigated is the "bad press" that may discourage this type of future behavior. With a few successful installs at the previous price point, Tesla benefited from favorable press about their solar roof product V3, and they now want to repair their sales pipeline from offers they previously made to many homeowners without much hassle on their end.

Your average for-profit attorney is going to brush off a homeowner's request to "enforce" whatever sales contract they may have with Tesla. The damages are too small, and the homeowner would need to clearly demonstrate the monetary damage they have suffered as a result of being deceived/mislead by Tesla. Since these homeowners haven't actually paid for their V3 Solar Roof systems, their only damages may be the lost time and solar production for having waited around for Tesla to honor their commitments.

It's not like a lawyer or arbitrator can compel Tesla to actually sell and deliver their solar roof at the previously stated prices. But a government agency imposing their statutory fines may actually have some teeth (very tiny teeth that probably won't be used here. but it's at least worth a shot).

 

[wjgjr]

Bait and switch and deceptive pricing probably overlap and can take on many forms. Since these price changes aren't related to the home/site and more to do with the "change to the solar portion of the roof" it's tough to tell if Tesla is asking for more $$$ because of a straight price adjustment or a modification to their product offering. Regardless of semantics involved... the problem here is Tesla's advertising low prices that cannot/will not be honored to the determent of homeowners. The problem should not the specific words I used in a forum post.

I don't want the government to enforce the contracts that Tesla entered into for the TMC members. I want the government to impose the penalties they are allowed to in an attempt to hold Tesla accountable in some manner for their business practices. Heck, just having word that Tesla is being investigated is the "bad press" that may discourage this type of future behavior. With a few successful installs at the previous price point, Tesla benefited from favorable press about their solar roof product V3, and they now want to repair their sales pipeline from offers they previously made to many homeowners without much hassle on their end.

Your average for-profit attorney is going to brush off a homeowner's request to "enforce" whatever sales contract they may have with Tesla. The damages are too small, and the homeowner would need to clearly demonstrate the monetary damage they have suffered as a result of being deceived/mislead by Tesla. Since these homeowners haven't actually paid for their V3 Solar Roof systems, their only damages may be the lost time and solar production for having waited around for Tesla to honor their commitments.

It's not like a lawyer or arbitrator can compel Tesla to actually sell and deliver their solar roof at the previously stated prices. But a government agency imposing their statutory fines may actually have some teeth (very tiny teeth that probably won't be used here. but it's at least worth a shot).

I agree that it seems unlikely (especially barring a class action) to see this as a big case for a lawyer. That said, assuming it is established that Tesla breached the contract, it seems like the homeowner would have the right to expectation damages to place them in the position they would have been had the contract been completed - not just to recover any expenses they might have made in reliance on the contract. Since Tesla helpfully provides estimates of the value of the product, this would actually be relatively practical to calculate, unlike in some contract disputes.

I would also note that, at least theoretically, an arbitrator or judge could compel Tesla to complete the contract as signed. But, it does seem extremely unlikely for that to happen, even though the solar roof is a fairly unique product at the moment.