Question

Estimate the ROI and payback time if you own a long range $47,000 Tesla Model 3 (80kW pack) and have a $17,000 12kW solar panel-system installed relative to driving a regular $37,000 ICE car and no solar (but a $118 monthly electric bill). Also briefly explain the environmental impact driving a Tesla and having solar power to power it.

Answer 1

The Payback Period is the amount of time it will take you to recoup your original investment in the project. The ROI is a ratio of the total savings from the project to the total project cost and it will demonstrate how profitable the project is.

Step 1 – Determine the Total Cost of Tesla Model 3

Cost of Car =$47000

Cost of 12kW solar panel system = $17000

Total Cost = $64000

Step 2 – Calculate Annual Savings

monthly electric bill = $118

So, Yearly electric bill = 118*12

Yearly electric bill =$1416

Step 3 – Calculate the Payback Period

• Total Project Cost: $64,000
• Divided by Total Annual Savings: $1416
• Equals: Payback Period in Years: 45.1977 years

That means that the project will pay for itself in over 45 years

Step 4 – Calculate Return on Investment (ROI)

The final step in the process of determining the inherent value in the project is to calculate the ROI. This might be a useful measure for the decision-makers that have multiple projects competing for limited funds.

Total Annual Savings: $1416

Minus: Total Project Cost: $64,000

Equals: Net Savings: -$62584

Divided by: Total Project Cost: $64,000

Equals: ROI: -0.977875; expressed as a percentage: -97.7875%

• Electric vehicles are fueled by connecting to the electric grid, and electricity can be produced through several generation methods. Importantly, electric vehicles allow you to become energy independent, through the installation of renewable electricity generation such as a solar array to fuel your car. By pairing a solar PV system with an electric vehicle, you can become energy independent and produce free electricity from the sun to power your car, instead of buying fuel at the gas pump.