Tesla bought SolarCity at the tail end of 2016.
They told the public their purpose for buying it was to make solar energy affordable and available to everyone. They have even detailed how their solar panels work. Not only are they aesthetically pleasing, they’re made using hydrographic coloring.
But now the project has been pushed back to 2018. But even before this was announced, experts were speculating that the buyout and throwing their hat in with solar power was a bad idea for Tesla.
So what happened?
Fantasy vs. Reality
In Tesla’s mind, solar power should be available to everyone. That is understandable. The sun is a permanent source of energy, and using it to power our lives would relieve a lot of stress on the planet.
But the reality is most people can’t afford to convert their home to solar power. The rewards for making the change simply is not worth the money invested for most people.
Let me break it down for you.
In Cook County, Illinois, the government has passed a regulation calling for solar powered communities to be built. This same regulation rewards people for switching to solar power. Partial funding, including possible cash rewards, is provided to help offset the costs. Once communities start to switch, Illinois is hoping that solar power will gain popularity.
The government realizes what most solar panel retailers don’t: no one is going to invest in using renewable energy when using electricity and coal is a much, much cheaper alternative.
Even though solar energy is touted as cheaper than ever before, no one is buying into it. Many solar companies are going bankrupt all over the nation.
Tesla’s heart is in the right place, but reality is clashing with the company’s plans. Not to mention they have their hands full dealing with lawyers like Eisenberg Gilchrist & Cutt because they’re being sued. It’s hard to tout a product as revolutionary when you’re being accused of having another revolutionary product that is sub-par.
Here’s another interesting thought: the demographic Tesla is targeting isn’t growing as quickly as planned.
Examining the Target Demographic
Aside from specialized urban development projects, most people who have solar paneling on their houses own their homes. They don’t live in apartments, condos, or in a big city. They’re in suburbs or rural areas, and the last thing on their mind is investing in renewable sources of energy.
Now, when Tesla says this roof is going to be more affordable than a normal roof, they’re talking about over time. Initially, you are going to spend some big money. Tesla has a loan program specifically for their solar panels. That should tell you how much it will cost.
How many people look at renewable energy as a long-term investment?
I’ll give you a hint: not enough.
Renewable energy is not a 401k plan. It’s not a career. It’s not going to put people through retirement. It isn’t going to change your life. Therefore, people just aren’t interested in investing in it.
Does it really make sense to go into debt for years just to cut down on your power bill?
It might in some areas where electricity is ridiculously expensive. But how many areas are like that? Overall, it is still cheaper to use electricity than solar power.
That is Tesla’s biggest challenge.
Making their solar tiles look pretty is a start, but it isn’t going to be the thing to make solar power energy mainstream. They need to make it affordable. So until is available to average people without a loan, or years of debt, no one is going to buy it.