Solar Roof, big price increase

[holeydonut]

While I agree there is significant question of whether or not there is a breach, I disagree with the notion that Tesla is not cancelling the contract. Rather than amending the pricing under the clauses that are (potentially) available to them, they are actually issuing a completely new contract with a new effective date. I would be interested to know if other terms are changing, but it seems to me they are very much cancelling the contract and issuing a new one.

Additionally, the contract is effective and in full force on the date signed by the customer per the terms of the contract itself. While there are provisions for when the pricing can be changed or the contract terminated by the customer, the fact that work has not commenced has no special meaning to whether the contract is enforceable in the event of a breach. It might impact the damage award depending on how the plaintiff was calculating those, but it doesn't give Tesla any additional rights to walk away from it.

This is all to say that whether or not on-site work has commenced is largely a red herring in terms of the question of a breach. The real question is whether Tesla is entitled to make this pricing change under the "Price Change" clause. If not, then a breach has occurred. If so, then when in the process it occurs goes to the question of damages.

Have you spoken with an attorney? It'll be helpful to know they advise that this is a clear breach instead of tesla just using the terms of the existing contract to amend pricing after learning new facts during the planning phase of your project.

Having gone through this type of thing in the past, I can tell you that once work commences... typically the solution requires remedy on what can take the event to completion or a reasonable progress milestone. But if work hasn’t started, then it’s more of an issue about unwinding things and returning to the previous state and settling on damages.

Edit: Breach or no Breach, I’m talking about a reasonable expectation of settlement. You keep saying this working commencing thing is tied to whether there is a breach. I’m trying to explain to you that regardless of a breach, a resolution takes on different forms if work has commenced.

I know your interpretation is that a contract is a contract and Tesla needs to go to 100% finished with the original bid. Or the defendant pays damages to fairly set you at that 100% competed state. So hopefully you find a lawyer and arbitrator that sees or from your perspective.

 

[jeturney]

Same "fun" here. Order placed December 1, 2019, Contract signed May 26, 2020. Email and "new" price received on April 10, 2021 which changes the price from $68,002.53 to $96,816.40 - more than a 42% increase!!

 

[wjgjr]

Have you spoken with an attorney? It'll be helpful to know they advise that this is a clear breach instead of tesla just using the terms of the existing contract to amend pricing after learning new facts during the planning phase of your project.

Having gone through this type of thing in the past, I can tell you that once work commences... typically the solution requires remedy on what can take the event to completion or a reasonable progress milestone. But if work hasn’t started, then it’s more of an issue about unwinding things and returning to the previous state and settling on damages.

I know your interpretation is that a contract is a contract and Tesla needs to go to 100% finished with the original bid. So hopefully you find a lawyer and arbitrator that sees or from your perspective.

Of course I have not since, as I have said multiple times, I am neither a lawyer nor affected by this. But, a contract is, in fact, a contract. How the parties choose to handle a breach absolutely can depend on where they are in the contract. But your examples of a solution of taking the contract to completion vs. unwinding is, as I note, a question of remedy/damages - not of whether a breach occurred.

 

[bayareaever]

Same "fun" here. Order placed December 1, 2019, Contract signed May 26, 2020. Email and "new" price received on April 10, 2021 which changes the price from $68,002.53 to $96,816.40 - more than a 42% increase!!

Just wondering, your contract was signed almost a year ago. Why didn’t install happen already? Was it already scheduled?

 

[nicholb]

I just received the reply below from Tesla. I'm going to just cancel and get my $100 deposit back (probably take a few months knowing Tesla).


I can confirm that the price increase is based on price per sq ft which is now been increased to $14 per sq ft and is a new change within Tesla. As Tesla is growing in the roofing industry and ramping up Solar Roof, the price of supplies have increased and we had to increase our prices with the supply and demand. This is applied to all orders (including signed contracts) and is a set term.

At this time, your options are to sign the new contract and keep moving forward, or cancel and get a full refund. I understand this can be frustrating and I apologize, but I cannot honor your original cost nor escalate your project for this matter.



Minnesota is still on hold until we have crews ramped up so you would continue to remain on hold if you decide to move forward.



Thank you.



Best,

Project Advisor – Solar Roof

 

[gpez]

I do think the ‘21 FTC might possibly go back to 30% so that would help, but not much with ~50% price increases.

This is such a big misconception. Tax credits do not directly reduce prices the consumer pays. How much you're willing to pay out of pocket does not change with a tax credit. The solar ITC is a producer subsidy which Tesla captures almost the entirety of.

If you're willing to pay $35k for a 10kw system why would Tesla still charge $35k if they would get $50k total with the ITC ($35k + $15k tax credit) with your outlay still "only" being $35k?

Ninja edit: to be clear I'm saying that a renewed ITC wouldn't address Tesla's super crummy business practices here, may even make it worse by endorsing it with tax credits.

 

[wjgjr]

This is such a big misconception. Tax credits do not directly reduce prices the consumer pays. How much you're willing to pay out of pocket does not change with a tax credit. The solar ITC is a producer subsidy which Tesla captures almost the entirety of.

If you're willing to pay $35k for a 10kw system why would Tesla still charge $35k if they would get $50k total with the ITC ($35k + $15k tax credit) with your outlay still "only" being $35k?

How much you are willing to pay does not change, but the price at which a producer can maximize its profits does, as does the opportunity for competition where one supplier chooses not to "share" the discount. So, I continue to disagree with this, though this is probably not the thread to spend too much time on this issue since it does not bear on the central issue here, and, in any event, there are no guarantees the ITC will go back to 30%.

 

[holeydonut]

Of course I have not since, as I have said multiple times, I am neither a lawyer nor affected by this. But, a contract is, in fact, a contract. How the parties choose to handle a breach absolutely can depend on where they are in the contract. But your examples of a solution of taking the contract to completion vs. unwinding is, as I note, a question of remedy/damages - not of whether a breach occurred.

When we were speaking about damages, I agreed with you that in order to have a reasonable damages conversation then I would agree with you that a breach had occurred. So I think you and I also agree that if there is a breach and there are damages, then a resolution to remedy the situation does consider whether the construction has begun.

But looking beyond damages... I think the breach itself is tough to prove. Personally I don't think Tesla is in breach because they always left themselves an out in their own contract. Tesla has allowed themselves the option to modify/amend their pricing if they discover new aspects of the project. To me, what Tesla is doing is best described as "poor form" where they're going to put themselves at risk of negative externalities. But the contract itself allowed that unfortunate interpretation.

So, I am interested to learn if after folks like @Bill_woolf speak with an attorney, if their case has merit in terms of there being a breach; in terms of reasonable calculation damage; and in terms of a successful remedy through arbitration to make this endeavor worthwhile. As H2ofun has said, life is short, and pursuing something to a favorable outcome will take more time and energy than some may be willing to spend.

Outside of contracts... I am interested to learn if State AG/FTC view this as a form of false advertising or some form of bait and switch. Tesla is claiming they had every intention of selling the originally advertised product and services for the advertised price. But it seems they've discovered new complexities that require an amendment (and re-acceptance) to the contract. Again, is this "poor form" or does it violate the law?

My curiosity in this stems from having participated in similar activities in the past (albeit, on the other side of the fence in corporate). So I want to know how this all plays out in this particular scenario.

 

[wjgjr]

I just received the reply below from Tesla. I'm going to just cancel and get my $100 deposit back (probably take a few months knowing Tesla).


I can confirm that the price increase is based on price per sq ft which is now been increased to $14 per sq ft and is a new change within Tesla. As Tesla is growing in the roofing industry and ramping up Solar Roof, the price of supplies have increased and we had to increase our prices with the supply and demand. This is applied to all orders (including signed contracts) and is a set term.

At this time, your options are to sign the new contract and keep moving forward, or cancel and get a full refund. I understand this can be frustrating and I apologize, but I cannot honor your original cost nor escalate your project for this matter.



Minnesota is still on hold until we have crews ramped up so you would continue to remain on hold if you decide to move forward.



Thank you.



Best,

Project Advisor – Solar Roof

Thanks for providing this update - what is interesting is that if the increase is applied to the roof as a whole, and not "a change to the solar portion of your Solar Roof." It would suggest that the "unforeseen conditions" clause is what they will rely on. I think I've seen two versions of that clause posted, so it will be interesting to see if that makes any difference as to whether a breach occurred. (And I'm not clear if the second version is only in the newest contracts from the weekend or on some of the signed ones Tesla is seeking to replace.)

 

[gpez]

I just received the reply below from Tesla. I'm going to just cancel and get my $100 deposit back (probably take a few months knowing Tesla).


I can confirm that the price increase is based on price per sq ft which is now been increased to $14 per sq ft and is a new change within Tesla. As Tesla is growing in the roofing industry and ramping up Solar Roof, the price of supplies have increased and we had to increase our prices with the supply and demand. This is applied to all orders (including signed contracts) and is a set term.

At this time, your options are to sign the new contract and keep moving forward, or cancel and get a full refund. I understand this can be frustrating and I apologize, but I cannot honor your original cost nor escalate your project for this matter.



Minnesota is still on hold until we have crews ramped up so you would continue to remain on hold if you decide to move forward.



Thank you.



Best,

Project Advisor – Solar Roof

Yeah I'm sure the PA has no say in the matter but this sort of reply would get directly forwarded to my lawyer. What a mess

 

[wjgjr]

When we were speaking about damages, I agreed with you that in order to have a reasonable damages conversation then I would agree with you that a breach had occurred. So I think you and I also agree that if there is a breach and there are damages, then a resolution to remedy the situation does consider whether the construction has begun.

But looking beyond damages... I think the breach itself is tough to prove. Personally I don't think Tesla is in breach because they always left themselves an out in their own contract. Tesla has allowed themselves the option to modify/amend their pricing if they discover new aspects of the project. To me, what Tesla is doing is best described as "poor form" where they're going to put themselves at risk of negative externalities. But the contract itself allowed that unfortunate interpretation.

So, I am interested to learn if after folks like bill_woolf speak with an attorney, if their case has merit in terms of there being a breach; in terms of reasonable calculation damage; and in terms of a successful remedy through arbitration to make this endeavor worthwhile. As H2ofun has said, life is short, and pursuing something to a favorable outcome will take more time and energy than some may be willing to spend.

Outside of contracts... I am interested to learn if State AG/FTC view this as a form of false advertising or some form of bait and switch. Tesla is claiming they had every intention of selling the originally advertised product and services for the advertised price. But it seems they've discovered new complexities that require an amendment (and re-acceptance) to the contract. Again, is this "poor form" or does it violate the law?

My curiosity in this stems from having participated in similar activities in the past (albeit, on the other side of the fence in corporate). So I want to know how this all plays out in this particular scenario.

I certainly agree that proving a breach is no slam-dunk, though the wording in Tesla's contract (as of the version I have - it may be that they since updated the language for some) is more narrow than what I've seen elsewhere - "unforeseen conditions at the installation location" seems to reasonably be read as being confined to things they did not expect to find at the home - rotten wood, hidden electrical issues, etc. - and not to the cost of materials. But, Tesla clearly feels their position is defensible and certainly is capable of mounting a strong defense.

The issue I was taking is with trying to place some special import on the start of construction under the heading of "breach". Whether or not the on-site work has started, if what Tesla has done in raising prices goes against the contract terms, it is a breach, period. Conversely, they would be entitled to make a price change even after on-site work began should that be when they discover an issue or something to cause a change in the solar portion.

 

[bayareaever]

This is such a big misconception. Tax credits do not directly reduce prices the consumer pays. How much you're willing to pay out of pocket does not change with a tax credit. The solar ITC is a producer subsidy which Tesla captures almost the entirety of.

If you're willing to pay $35k for a 10kw system why would Tesla still charge $35k if they would get $50k total with the ITC ($35k + $15k tax credit) with your outlay still "only" being $35k?

Ninja edit: to be clear I'm saying that a renewed ITC wouldn't address Tesla's super crummy business practices here, may even make it worse by endorsing it with tax credits.

I just received the reply below from Tesla. I'm going to just cancel and get my $100 deposit back (probably take a few months knowing Tesla).


I can confirm that the price increase is based on price per sq ft which is now been increased to $14 per sq ft and is a new change within Tesla. As Tesla is growing in the roofing industry and ramping up Solar Roof, the price of supplies have increased and we had to increase our prices with the supply and demand. This is applied to all orders (including signed contracts) and is a set term.

At this time, your options are to sign the new contract and keep moving forward, or cancel and get a full refund. I understand this can be frustrating and I apologize, but I cannot honor your original cost nor escalate your project for this matter.



Minnesota is still on hold until we have crews ramped up so you would continue to remain on hold if you decide to move forward.



Thank you.



Best,

Project Advisor – Solar Roof

Can someone attempt to define ‘$14/sf’?

How would I attempt to calculate the ‘new’ price if my roof is xxx sf?

what a mess indeed.

 

[jboy210]

Thanks for providing this update - what is interesting is that if the increase is applied to the roof as a whole, and not "a change to the solar portion of your Solar Roof." It would suggest that the "unforeseen conditions" clause is what they will rely on. I think I've seen two versions of that clause posted, so it will be interesting to see if that makes any difference as to whether a breach occurred. (And I'm not clear if the second version is only in the newest contracts from the weekend or on some of the signed ones Tesla is seeking to replace.)

The non-active tiles are made up the same as the active tiles, minus the embedded solar layer. So perhaps the price increases Tesla is referring are in the glass material that makes up the tiles themselves.

Many prices in construction have had costs go 50+% since last year. We are having a fence repaired and putting it off one year increased the cost by 45%. My neighbor had his shingle roof replaced and the bid went up by $6,000 from March 2020 to Nov 2020. We are trying to buy a home in Texas and they are seeing a rash of construction material thefts from job sites because people can make so much money selling things like lumber, shingles, wiring, and windows on the black market.

 

[ATXMD]

I did speak with my attorney. Here is what she said:

I doubt there's much you can do, since the contract really lets them change the price for any reason, and you have the opportunity to cancel. You'd have to show that your reliance on having this particular solar roof installed caused you some sort of damages (like you invested $$ in preparing for installation of Tesla solar panels and you can't install a suitable replacement). Plus, the contract requires arbitration.

I would start by calling them and raising hell with customer service, particularly since you're loyal Tesla customers.

Has anyone signed their new agreement? What I'm trying to figure out is if there's likely to be a class/mass action lawsuit after the fact - sign the new deal, and then try to recover the cost difference. Particularly the fact that they're raising the price on elements that are not part of the "solar" part of the Solar Roof.

 

[holeydonut]

I certainly agree that proving a breach is no slam-dunk, though the wording in Tesla's contract (as of the version I have - it may be that they since updated the language for some) is more narrow than what I've seen elsewhere - "unforeseen conditions at the installation location" seems to reasonably be read as being confined to things they did not expect to find at the home - rotten wood, hidden electrical issues, etc. - and not to the cost of materials. But, Tesla clearly feels their position is defensible and certainly is capable of mounting a strong defense.

The issue I was taking is with trying to place some special import on the start of construction under the heading of "breach". Whether or not the on-site work has started, if what Tesla has done in raising prices goes against the contract terms, it is a breach, period. Conversely, they would be entitled to make a price change even after on-site work began should that be when they discover an issue or something to cause a change in the solar portion.

Yeah, I remember you and I were posting in that other thread where someone was getting Tesla Roof and during mid-tear-up of the roof Tesla called the homeowner and asked for them to pony up more bucks or they wouldn't finish the job.

Solar Roof - Anyone have Tesla Call During Tear Off to Re-Negotiate Costs?

Hi Everyone... I should probably have my install on a single thread. Will try to consolidate later. The crew is here ripping off our roof (not on schedule) and my new rep since August, who has never reached out to us before today is asking for an additional ($2,500 to $3,000) because of more...

teslamotorsclub.com

I feel like at that point, since Tesla had okayed their sub to begin work, changing the price for an "unforeseen condition" was much more difficult to do under their contract. Because once construction had started, they knew what type of roof, sheathing, underlayment, rafter spacing, etc was in play. And they had the construction supplies on site. So the claim that prices have gone up or the roof was more complicated than they thought is Tesla's fault for not having "foreseen it".

Anyway, I'm glad that user got his roof since Tesla backed off of their request for more money. I hope that same type of outcome happens to people with the mass-pricing-adjustment as well.

 

[MP3Mike]

What I'm trying to figure out is if there's likely to be a class/mass action lawsuit after the fact

I think your lawyer covered that here:

Plus, the contract requires arbitration.

Sounds like lawsuits, class/mass or individual, are pretty much out, and arbitration cases are almost always individual from what I have seen. (Each party has to open and deal with their case individually.)

 

[wjgjr]

The non-active tiles are made up the same as the active tiles, minus the embedded solar layer. So perhaps the price increases Tesla is referring are in the glass material that makes up the tiles themselves.

Many prices in construction have had costs go 50+% since last year. We are having a fence repaired and putting it off one year increased the cost by 45%. My neighbor had his shingle roof replaced and the bid went up by $6,000 from March 2020 to Nov 2020. We are trying to buy a home in Texas and they are seeing a rash of construction material thefts from job sites because people can make so much money selling things like lumber, shingles, wiring, and windows on the black market.

Since it sounds like they are now using all metal for the inactive tiles, it is probably more the metal prices that are an issue (though both could be up - I am in no way denying prices are up overall, as I have also experienced.)

I feel like at that point, since Tesla had okayed their sub to begin work, changing the price for an "unforeseen condition" was much more difficult to do under their contract. Because once construction had started, they knew what type of roof, sheathing, underlayment, rafter spacing, etc was in play. And they had the construction supplies on site. So the claim that prices have gone up or the roof was more complicated than they thought is Tesla's fault for not having "foreseen it".

Anyway, I'm glad that user got his roof since Tesla backed off of their request for more money. I hope that same type of outcome happens to people with the mass-pricing-adjustment as well.

I guess it depends on what happens when - in our case, electrical did not show up for a few days, so an unforeseen issue with our electrical (always possible with an old house - though the electrical has been updated) was still possible, as an example.

In the end, I agree that I hope something works out for these customers, though it really seems like it will be a long, difficult process.

 

[wjgjr]

Sounds like lawsuits, class/mass or individual, are pretty much out, and arbitration cases are almost always individual from what I have seen. (Each party has to open and deal with their case individually.)

That is the thing that I think keeps getting lost in all of our discussion - unless you opted out (or signed your contract in the last 30 days so you still can opt out) you are bound by the arbitration clause (which also does state that cases must be treated individually) which does also allow for small claims court. Unless there exists something that would invalidate the arbitration clause, it seems like arbitration would be required. As I noted some way back, the only good features are that it might be quicker and less expensive to get a resolution, whatever that may be.

I suppose somebody who is themselves a lawyer or coached by one could try to get a little satisfaction in a small claims court where Tesla may also be restricted in the use of lawyers.

 

[jboy210]

Since it sounds like they are now using all metal for the inactive tiles, it is probably more the metal prices that are an issue (though both could be up - I am in no way denying prices are up overall, as I have also experienced.)

I read about them using metal, but has that started already? And how does that look? I would think it would be quite noticeable since the roof sort of shimmers in the sun like an old-style window, and glass looks quite different from metal. And many people, us included, want a solarroof for looks as much as solar power.

 

[ATXMD]

That is the thing that I think keeps getting lost in all of our discussion - unless you opted out (or signed your contract in the last 30 days so you still can opt out) you are bound by the arbitration clause (which also does state that cases must be treated individually) which does also allow for small claims court. Unless there exists something that would invalidate the arbitration clause, it seems like arbitration would be required. As I noted some way back, the only good features are that it might be quicker and less expensive to get a resolution, whatever that may be.

I suppose somebody who is themselves a lawyer or coached by one could try to get a little satisfaction in a small claims court where Tesla may also be restricted in the use of lawyers.

I signed my contract in the last 30 days...