Is Tesla Solar Worth It? An Honest and In-Depth Review

UPDATE: If you want to read our updated review of Tesla Solar, please check out our article here.

(Photo source: tesla.com)

Like many of you stuck at home during the pandemic, I decided 2020 would be a good year to work on some home improvements. One of the largest projects I undertook was purchasing Tesla Solar. Tesla announced in September 2020 that they would be lowering the cost of their solar panels nationwide, indicating an aggressive push into the solar energy market after purchasing SolarCity in 2016. Always interested in Elon Musk’s latest products, I decided it would be a good time to make a leap to solar energy. I became an owner of Tesla Solar panels in October 2020, and with a good three full months under my belt I figured it would be a good time to write an honest review of my experience buying and owning Tesla Solar.

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Why Did I Buy Solar?

For a little background, I live in Arizona, where solar companies fiercely compete for customers in this sun-soaked state. According to Seia.org, Arizona is ranked #5 in the list of top states for cumulative amount of solar energy capacity installed in megawatts (MW) (source: Seia.org). I have looked into solar energy for my home in the past, but the solicitation of the marketing these companies use has been very off-putting to me. If I showed any interest in a solar company’s products and services, I would receive numerous follow-up phone calls and emails even after requesting to be removed from their contact list. Any interest I had in getting solar energy was diminished by the sales tactics of these sharks, and my lack of desire to be hounded by salespeople days on end.

Then, 2020. In a year of extreme abnormality and disruption of life, I had more time at home to consider ways I could cut expenses, generate income, and invest in our home. Having read in the spring of 2020 that Tesla Solar was expanding nationwide, it only made sense to head over to their website to casually do a little research of my own. I was never contacted by a Tesla salesperson trying to upgrade my purchase or pressure me to complete the purchase. That fact, along with my desire to invest in my home and save money on energy, led me to move forward with purchasing Tesla Solar.

The Purchasing Process

Tesla’s website was easy to navigate, and the information about their solar system was simple and concise. There were only a couple of options to consider in my purchase, and that included the size of the system I wanted, and whether to include the Tesla Powerwall, which is a large battery installed on your property that can store excess solar energy to power your house off the electrical grid. I don’t own a Tesla vehicle or any other products, so I opted to go without the Powerwall. Astonishingly simple, all I had to do was pay a $100 deposit, input some information about my home, upload a recent electricity bill, and my order had been placed.

The hardest part of the purchasing process was the waiting. It took from May 2020 when I ordered the solar panels until September 2020 for Tesla to finish the installation. It wasn’t until October 2020 when I received approval from my electricity utility provider that I got to flip the “On” switch and begin producing solar energy. It took a few weeks after ordering solar for Tesla to develop a system design for my house, using engineering estimates and satellite imagery of my property. I did not speak with anyone on the phone during the entire process of purchasing the system, as everything was done via email and the Tesla website. I’m not sure if this was a result of the pandemic or just Tesla’s appeal to Millennials and younger consumers, but I had no problem with only electronic correspondence. They did provide a phone number for customer support, and eventually a project point of contact with a direct phone number and email.

Another aspect of the long process from order to installation is the number of permits and authorizations that must be obtained from the utility company, city, and county. This may differ by state and locality, but Tesla had to do a lot of behind-the-scenes paperwork to get the solar system approved by multiple authorities. The slow process is really not Tesla’s fault, but rather the bureaucracy and red-tape involved with energy products and utilities. I credit Tesla for keeping me informed periodically along the way.

The Product

Tesla Solar is well-known for their “Solar Roof” that allows homeowners to buy solar panels that look like sleek roof tiles. This provides a beautiful aesthetic, but comes at a hefty price tag. Because I was seeking to save money and not spend more, I opted for the less elite version of solar panels they offered. Tesla’s standard solar panels are more traditional looking, fairly large rectangular panels that sit adjacent to one another, slightly raised off of the roof. Tesla sells these panels in systems ranging from 4 to 16 kilowatts (kW). I ordered an 8 kW system initially, but due to size restraints on my roof Tesla had to modify the system to a 4.76 kW system consisting of 14 panels, with 8 panels south-facing and 6 panels north-facing. I have a pitched roof so the panels did not have to be installed at an angle other than the existing angle of my roof. While these panels were not anything like the “Solar Roof” tiles, they are sleek and low-profile, much better looking than the traditional solar panels I have typically seen.

(Photo by Pixabay from Pexels)

Installation

The installation process was much easier than I anticipated. A team of four workers showed up on time in a Tesla-wrapped vehicle, and worked for about six hours to install all of the panels. They worked diligently and were very professional, and they only turned off the power for about a half-hour while connecting the solar inverter to our existing electrical panel. They left after a whirlwind day of work, and I had a new solar system sitting on my roof, waiting for approval from the utility company to be turned on.

Flipping the “On” Switch

It felt like I was a kid waiting for Christmas morning to finally get to turn on our system. You literally get to flip the switch yourself to turn the solar panels on and begin producing energy for your home. After installation, Tesla provided a device that connects to my internet modem which allows the solar energy produced to be tracked through a mobile app. The app is simple and user-friendly, and provides useful information about the energy produced, energy consumed, and energy drawn from the electrical grid. Once the flip was switched, it was fairly anti-climactic. No sound or confetti. Just a new set of solar panels quietly converting sunlight into consumable energy.

Cost

Tesla now claims to have the lowest-cost solar panels in the country. My 14 panel system cost me $11,666 (inclusive of the $100 deposit when I ordered it). Tesla also offered financing, which I chose to do given the decent APR of 3.99% and a 10-year term. The monthly payments came out to around $90 per month, and the payments will stay at this amount as long as I use the Federal solar tax credit I receive when I file my taxes for 2020 to pay directly towards the loan balance. If I do not do that, the monthly payments will jump up to about $120 per month. Considering that the APR is low on the loan, I am content to pay the minimum monthly payments and focus on investing those cash flows that will likely earn a higher return than the 3.99% APR I would earn from using them to pay off the loan.

Performance of the System

In Tesla’s final design of my system, they estimated the 4.76 kW setup would produce 7,302 kilowatt hours (kWh) of energy annually, or 608 kWh per month. In the 12 months leading up to turning on my solar system, I had consumed 12,302 kWh of electricity in my home, or 1,025 kWh per month. I assumed, based on Tesla’s estimate, that the solar energy produced would offset my own consumption by about 60%. Tesla has also estimated the solar panels will have a 30-year lifespan, with an 0.5% decrease in energy production each year due to aging and wear of the system.

Cost vs. Benefit

I have included the details of my energy consumption and solar energy production at the end of this article. But for those who are not interested in the finer details, here are the takeaway numbers: my solar production from 4Q 2020 (October-December) has offset my electricity bills by an average of $15.86 per month, and has offset my energy drawn from the grid by an average of 33.8% per month. The savings of $15.86 per month might be slightly skewed by October 2020, when my system wasn’t running for the full month. Let’s be liberal and assume that my monthly savings will average $20 in reductions to my electricity bill. In Arizona, I will receive a $1,000 solar tax credit on my 2020 state tax return, and a $3,300 solar tax credit on my 2020 federal tax return. My total tax savings will be $4,300, or 36.9% off the price tag I paid. After those credits are applied, my balance would be $7,366. With a 30 year expected useful life of the system, I would need to generate $20.46 in savings per month over that 30 year lifespan to break even on the system. That’s right about where my estimated average monthly savings will be based on the last 3 months, but there’s a caveat. Tesla estimates the system will lose energy production of about 0.5% per year. So I am looking at a total 15% reduction in the system’s efficiency over its 30 year expected useful life. My solar energy production will be going down over time, and my energy costs will likely rise due to the trend of rising rates of utilities over time. In summary, my solar investment will possibly break even, but almost certainly will not provide a net dollar benefit over its useful life. This was obviously not the benefit I hoped for.

Equally disappointing to me is the fact that my system is so far on track to produce 4,560 kWh of energy annually, which is significantly less than the 7,302 kWh per year that Tesla estimated it would produce.

So Is It Worth It?

Given the rough math above, the numbers aren’t in my favor. Here are some of the pros and cons I have settled on after 3 months of owning Tesla Solar.

Pros:

• Tesla has streamlined an efficient process for ordering and installing solar panels

• Tesla claims to provide the lowest cost solar panels in the country right now

• Solar panels produce renewable energy that benefits the environment

• Tesla Solar has some good options to customize the solar system you want

• Tesla offers low-interest financing with fair terms

• The solar panels look sleek and low-profile

• Having a solar system will help reduce your monthly electricity bill

Cons:

• There are long delays in installation of the solar panels due to lots of paperwork and approvals

• Solar systems lose energy production capability over time

• Even after federal and state tax credits, I will likely only break even over the life of my solar panels

• Solar energy production thus far has been significantly lower than Tesla estimated

One final note. If there is one lesson I hope you can take away from my experience buying Tesla Solar, I would say it is this: the energy offset percentage produced by your solar panels is not equal to the cost offset percentage on your monthly utility bill! What no one in the solar industry tells you is that your utility bill is not only charges for the energy you use, but also taxes, surcharges, and other fees. In the case of my bill, my solar energy offset is only about 25% of my total bill! Even if my solar panels produced the 60% reduction in energy usage from the grid that I estimated, that would not equate to 60% off of my bill. It does not provide any offset to your taxes and fees that you have to pay anyway. I wish I had considered that before I jumped into my purchase, because it affects the overall cost/benefit analysis of getting solar in the first place if it is not as economical as it may seem.

There you have it! I will likely write future updates about my solar energy production and savings as time goes on, but this is my honest assessment of Tesla Solar after 3 months of being an owner. I can still sleep at night knowing I am decreasing my environmental footprint and saving some money, even if it’s not as good of an investment as I initially assessed. You decide for yourself if solar is the right investment for you, but make sure you do the research first!

For those who are not as interested in the nitty-gritty of how my Tesla Solar panels have produced energy and savings, stop reading here. Below I will be geeking out on the finer details and specifics of my solar savings.

Some Deeper Analysis

The two most important metrics to me that tell me the benefit of my solar panels are: 1) the actual kWh of energy produced by my system each month as an offset to my consumption, and 2) the dollar savings produced by my solar energy production each month. I only have 3 months of full data so far (October, November, and December 2020) to analyze the system’s production, so I’ve created the table below showing the energy offset and cost offset due to solar energy produced.

Consumption and Savings Comparison - Before and After Solar

In Arizona, the summer is when electricity bills soar due to the sweltering heat and increased use of air conditioning. The winters are very mild, so generally Arizonans don’t need to use much energy from heating. This partially explains why my energy offset percentage increases each month from October 2020 to December 2020 while my energy used decreases. Also, 8 of my solar panels are on the south side of my roof, where in the northern hemisphere they receive direct sunlight in the winter. Because I only have 6 solar panels on the north side of the roof to receive direct sunlight in the summer, my system should produce more energy in the winter than the summer. The amount of sunny days also has an impact on the solar energy produced, but that’s not too much of a problem in southern Arizona, where there are over 300 days of sunshine each year.

One thing that jumped out to me in my 3 month analysis is that the cost offset in dollars from the solar energy my system produced is drastically less than the energy offset in kWh. This caused me to scratch my head until I took a closer look at my electricity bill. Much of the bill consists of service charges, surcharges, and taxes that I had not accounted for. In the screenshot of my bill below, you can see the $19.72 credit for the excess generation my system produced. This credit puts a much smaller dent in the total billed amount inclusive of all the extra fees and taxes than it would if the bill was only for energy consumed. In other words, instead of my bill being reduced by 40.3% in accordance with the solar energy offset my system produced, my bill was only reduced by 24.7%. That’s a significant difference! This was a huge lesson for me and a glaring oversight when I bought the solar panels. I failed to realize that the savings on my solar panel would not be as significant to the bottom line of my utility bill as I expected.

December 2020 Electricity Bill

I have to make note in regards to my energy comparison (in the table above - Consumption and Savings Comparison - Before and After Solar) a couple things related to my 2019 energy usage versus my 2020 usage for these months. In the last couple of years I have swapped all of the old incandescent lights in my house to energy-efficient LED’s. I also purchased a Google Nest Learning Thermostat in 2019 ($239 on Amazon). The Google Nest is supposed to reduce energy consumption by learning your cooling and heating schedule and usage, among other smart technology it utilizes. I had also renovated my garage earlier in 2020, which included installing 6 new LED ceiling lights and a mini-split air conditioner. These definitely increased my consumption of energy in 2020. I have only started tracking my electricity consumption since 2019, so I have limited data about how these changes to my home have impacted my energy usage, but the monthly average from the 12 months leading up to my solar energy being produced at least provide a decent benchmark for comparison of the electricity I used before and after I got solar power.

Another important detail is that my utility company required me to switch to a Time-of-Use (TOU) plan, which charges higher rates for energy usage during peak demand hours, and lower rates for energy usage outside of those peak times. Before getting solar, I was on a simple plan that used a single rate for all of my energy consumption. TOU plans allow consumers to save money if they take advantage of the peak and off-peak times of the day for planning when to use the most electricity. I am not sure exactly how this factors into the comparison of my electricity consumption pre- and post-solar, but it certainly has some impact that may skew the comparison.

Overall, my energy usage over the months compared has gone up in 2020 versus 2019, but I’m hoping with some better energy usage practices, awareness, and solar production I can reverse the upward trend of consumption.

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The opinions expressed in this article are solely the opinions and views of the author. None of the views expressed are to be misconstrued as professional advice or recommendations, but rather for entertainment and recreational enjoyment. Neither Micah Brown nor FreelancedFinance have endorsed or have any professional affiliation with Tesla and neither recommend nor discourage readers from purchasing Tesla products.