7 Ways You Can Save Money with Tesla’s Solar Roof
The solar roof from Tesla has been around since 2016, when it acquired SolarCity in Fremont, CA. By late 2018, Tesla was able to provide a viable consumer product- version 1 of the solar roof. After a couple of iterations, version 3 of the solar roof was launched in 2020 at a lower cost to consumers. V3 is easier to manufacture, provides better durability, and its new design is easier to install.
With Tesla’s new lower cost for version 3 of the solar roof in combination with federal solar tax credits, state tax credits, and other monetary incentives, having a solar roof installed is becoming even more attractive for many consumers.
All of these savings will allow solar buyers to use their money for other purposes, like investments. If you are interested in making your money work for you, but do not have the time to research, consider the Blooom robo-advisor.
Knowing how the Tesla solar roof could save you money through tax credits/incentives and by generating passive income, could make you consider getting one yourself and soaking up the sun!
Tesla Solar Roof
Tesla’s solar roof is a full solar system that takes the place of the traditional tiles or shingles on the roof of the house. It is not a set of solar panels, it actually is the roof of the home.
The solar roof system also includes the Tesla inverter, which converts the DC from the Sun to the AC power used by your home and could also include the Tesla Powerwall, a battery backup that functionally replaces a generator.
Since Tesla’s solar roof replaces the standard roof, you should consider it to be a necessary home maintenance expense – i.e. roof repair, replacement, etc- as well as a solar energy system expense. If you are building a new construction home, it may be advantageous for you to get a Tesla roof installed instead of a traditional roof.
Tesla’s solar roof is a large upfront expense, you may have to implement meticulous savings strategies if you want to pay for it with cash. Consider looking at Betterment for investing and growing enough cash to pay for the roof. If you are less debt averse, you can get a small loan from one of the many great companies.
Federal and State Tax Credits for Tesla Roof
The first way the Tesla solar roof saves you money is through tax credits. The IRS provides a great energy incentive program for systems that make your home more energy efficient through the residential energy efficient property credit program.
This federal tax credit is 22% and a maximum of $5,000. It is available to US residents through 2024. For installation of a solar roof on a 2,000 square foot, 2 story home, you can expect to pay around $25,000 before the federal tax credit. LLCs in Florida are succeeding thanks to the skilled workforce available in the state. LLCs can further thrive if they choose to elect S Corp status. Read more about S Corps in Florida and everything they entail.
Saving $5,000 or 22% off your solar system is a big impact to the overall expense! Especially so if you consider the solar roof as a roof replacement expense and not just a solar system expense!
Many US states offer additional tax benefits for their residents that can be combined with the federal tax credit, saving you even more money on the expense of the roof! Here are some of the top state incentives available:
- Arizona- 25% tax credit with a max of $1,000
- New Mexico- 10% tax credit with a max of $6,000
- Hawaii (35%) and New York (25%)- tax credit with a max of $5,000
- Rhode Island- maximum $7,000 tax credit
- South Carolina- a 25% tax credit with a max $3,500
If you live in one of the above states, your savings to upgrade your home to a new solar roof can be huge! Besides tax incentives, many states offer additional breaks, rebates, and cash back.
Rebates for Solar Systems
The states of New Hampshire and Maryland both offer a $1,000 rebate for a solar system purchase, including the Tesla roof. New York state offers a $1,000 rebate program called the Sun Megawatt Block Program. Be sure to double check for rebates in your state!
Sales Tax Exemption
Around eight states offer a sales tax exemption on the purchase price of an energy efficient system, like the solar roof. If you are installing a solar system in your home, and live in one of the following states, you won’t have to pay sales tax at all or pay a much smaller portion. Sales tax would normally tag on an additional 5-7% depending on the states sales tax rate.
- New Jersey
- Colorado
- New Mexico
- Florida
- Massachusetts
- Maryland
- Vermont
- Wisconsin
Sell Your Excess Energy Back to the Power Company
When your home is soaking up a lot of sunlight, you will likely have extra energy. What happens to all that extra power your solar roof is working hard at producing? Well, it does not just disappear. It goes to one of two places- to the power grid to be used by other people or to a battery backup (like a Tesla Powerwall) for storage.
If you decide to provide your extra energy back to the power grid, you can be compensated with a credit on your electricity bill by the power company! This is one of the easier ways to earn some passive income. Your mileage may vary, so check with your local utility company about their buyback policies.
Store Energy – Protect Your Family and Assets
If your Tesla solar roof is working hard and getting lots of sunlight, you can benefit by storing extra energy into a Tesla Powerwall. You can purchase 1-10 Powerwalls to be used with your solar system. Depending on the number you install, you can potentially store enough energy to power your home up to 2 weeks without ever having to pull power from the grid.
Battery/power backup can save you money 1 of 3 ways:
- No need to pay for energy from the utility company
- Prevent your home from freezing/heating/damage when the power grid is offline
- Allows you to keep working, if you work from home
Save Money for Future You
The Tesla solar roof lasts much longer than a traditional roof, with Elon Musk stating that he once considered offering an “infinity warranty” during a 2017 Ted Talk. With a roof lifespan much longer than the average of 15 years, the solar roof will save you big time from the future expense of a roof replacement.
Save Money on Your Monthly Electricity Bill
The last and most obvious way the Tesla solar roof could save you money is by lowering one of the hidden costs of your home– the dreaded electricity bill. Estimates show that you can save 65% or more on your monthly bill with the solar roof. If you pay an average of $200 per month, that equates to a monthly average savings of $130!
Just think about what you can do with an extra $130 a month! If you just passively invested the savings wisely, you can potentially grow it to tens of thousands of dollars over the course of a handful of years.
Conclusion
After the upfront expense of the Tesla solar roof, it will start saving you money right away! If you plan to live in your home for a long time, it is a great investment. Even if you plan to sell and move within the next couple of years, it can raise your property value noticeably. Let your house suntan and save you money!