Is Tesla Solar Worth It?

I was curious to see if Tesla solar panels would be worth it for my in-laws since they live in LA and complain about their high electricity bills, around $500 a month.

The Tesla solar calculator (on their website after you enter an address) says it’ll cost $35,000 to install the solar panels (16.32 kW) and 2 Powerwalls (it originally recommended 4, but that made the upfront cost significantly more expensive). 2 Powerwalls is enough to have 2.5 days of backup power which seems sufficient. Tesla says this would result in $93,819 savings over 25 years by saving $367/mo. It’s not immediately clear how the calculation is done, but $367/mo * 12 months / yr * 25 yrs = $110,100. If we subtract off the initial cost of $35,000, it would be a total savings of $75,100. This isn’t the most realistic way to analyze the true savings because the initial $35,000 would likely be in the bank earning interest, or even in the market earning an even higher yield. Factoring in inflation, it would be higher. However, if we take Tesla’s word for it at $93,819 in savings, that would be equivalent to what you’d end up with at a 4% interest rate on the $35,000 over 25 years. Not bad, especially when the interest you’d earn at the bank would be under 1% at current rates!

However, it starts to become a questionable investment (in terms of dollars saved) if you expect to make a higher return than 4% in the stock market (or your investment of choice). I suppose, ultimately, that the decision should also be weighed with how not having electricity for a day or two during a black out would impact you.

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