Happy early birthday to Elon Musk

on May 23, 2017 at 8:59 AM

For a self-made billionaire and international business tycoon, Elon Musk sure does seem to have a lot in common with approximately half of all Americans. Like 49% of all American households many of Mr. Musk’s companies seem to be dependent on benefits from the federal government. The man who hopes to die on Mars may have his trip made possible by leveraging government tax benefits to make unprofitable companies profitable. SolarCity lost the better part of a billion dollars in 2016 before being acquired last November by Tesla, another of Mr. Musk’s enterprises. In an effort to stop the bleeding, Tesla’s new solar division drastically altered its business model and moved into solar roofing tiles.

Detroit Hosts Annual North American International Auto Show

The roofing tiles themselves are undeniably more aesthetically pleasing than solar panels and combined with the new infinity product warranty (as roofing tiles not solar panels) this idea initially sounds attractive. However, it is always worth reading the fine print before putting down the $1000 deposit to secure your place in a greener future.

The Tesla website claims the cost of the installed solar tiles will be $42 per square foot. This dwarfs the $5 per square foot for asphalt or $17 per square foot for slate. However, Tesla estimates that for average homes only 30-40% of the roof would need to be solar and the rest could be cheaper but visually similar non-solar tiles. This brings the net cost down to $21.85 per square foot, while this is still above the cost of slate, it seems reasonable enough.

The difficulty is, this lower price can only be achieved through a federal tax credit which Tesla itself estimates to be on average exceeding $15,000. Money doesn’t simply appear out of thin air, even federal tax subsidies (helicopter money)  must be taken from somewhere. This $15,000+ will be taken from taxpayers and put into the coffers of Tesla to subsidize what would otherwise be an uneconomically viable product. So once again, on behalf of all those who are net contributors to the federal budget, you’re welcome Elon.