Elon Musk expects Tesla's new solar roof to be big, both for the company and the massive solar factory it will operate in Buffalo.
But Musk isn't expecting the solar roof to be an overnight success, and that means the highly anticipated new product likely won't lead to a gush of new orders that will accelerate production at the RiverBend factory.
In fact, Musk said last week that production of the solar roofing tiles – expected to be the dominant product of the Buffalo factory – will ramp up "very slowly" as the company gradually rolls out its sleek new roofing product, first in California and then in other markets.
But the solar roof won't be the only product made at the Buffalo factory, which also will make conventional solar panels. With Tesla's SolarCity business still accounting for almost a quarter of the nation's residential rooftop solar market, it will need a lot of conventional solar panels just to meet its own demand.
SolarCity officials said those conventional panels will account for much of the workload in the factory's early days as it begins to ramp up production.
The ramp up in production of those conventional solar panels will not be slow, and the company remains on schedule to begin manufacturing at the South Park Avenue factory later this summer, a spokeswoman said.
The $900 million factory already was supposed to be buzzing with activity. Originally expected to be at full production by early this year, the South Buffalo factory has been delayed by SolarCity's deteriorating finances, which led to its acquisition last year by Tesla. The company's once-breakneck growth also has slowed, partly because of a deliberate decision to cut costs and try to stem swelling losses and partly because of slowing growth in the residential market. The company also has been focused on the development of its new solar roofing product.
As plans for the factory have changed, fewer of its promised 1,460 direct jobs are expected to be tied to its increasingly automated manufacturing operations, while more are likely to be sales and support tasks. Tesla also brought in Panasonic as a partner in the production of solar cells that will go into the conventional solar panels and the solar roofing tiles that the factory eventually will make.
Few specifics on Buffalo timetable
Tesla said this month that it is on track to start making the solar roof tiles on a pilot basis by the end of June at its facility in Fremont, Calif. Once all the kinks are worked out there, Tesla said it expects to shift production "shortly thereafter"to its gigafactory in Buffalo, which will be the biggest solar panel factory in the Western Hemisphere, built with $750 million in state subsidies through the Buffalo Billion economic development program.
Tesla has not provided a more specific timetable for ramping up the RiverBend factory, instead tying the launch of manufacturing in Buffalo to whenever it is that the pilot production phase in California is completed. How well that goes – and it could take longer than expected if the pilot manufacturing process proves to be more difficult than anticipated – will affect how rapidly production shifts to Buffalo.
Tesla has pledged to create 500 manufacturing jobs at the factory, along with nearly 1,000 other positions in various support, sales and administrative roles in Buffalo. The pace of hiring is likely to be gradual as the factory ramps up its production, hitting full capacity in 2019.
For now, Tesla and its partner, Panasonic, have posted openings for more than two dozen different positions at the 1-million-square-foot facility in Buffalo, ranging from top engineering and management jobs to maintenance technicians. Some of the job postings for high-ranking positions indicate that candidates potentially will spend two to four months working at the pilot production site in Fremont, Calif., before moving to Buffalo as production at RiverBend begins.
Solar roof to become dominant product
While the RiverBend factory will rely on conventional solar panels for much of its early production, Musk expects the solar roof to become SolarCity's dominant product as time goes on because it looks like a conventional roof and can cost less than a regular roof after factoring in the savings on electricity.
The solar roof, designed to look like a conventional roof even though it has solar modules embedded inside, is a key part of Tesla's plan to differentiate itself from other solar energy installers in a tightening solar energy market.
Tesla's solar roof will cost much more than a conventional roof with asphalt shingles. Tesla estimated it would cost $38,300 for a two-story home in the Buffalo Niagara region with 2,000 square feet of space. Yet between subsidies and the value of the energy it will produce, the company said a homeowner who installs one will come out about $11,300 ahead after 30 years, the company estimated.
"I'm confident this is a compelling financial decision," Musk said during a conference call after Tesla started taking orders for the solar roof last week. "We want to look around at neighborhoods and see roofs that are beautiful and generate energy from the sun."
Tesla initially will sell the solar roof only in California, but it gradually plans to begin offering it in other states.
Musk said he expects the ramp up of the solar roof to take time. "It will be very difficult and will take a long time, and there will be some stumbles along the way," he said. Because its market involves replacing an existing roof or new home construction, Musk has said it likely will take 15 years or more before solar roofs – assuming they catch on – outnumber conventional roofs.
But SolarCity officials say that even a slow ramp of the solar roof will be substantial, involving thousands of homes.
If the solar roof catches on, they say, it could be millions.