Why Tesla’s photo voltaic enterprise hasn’t received off the bottom as Elon Musk promised
It’s been five years since Tesla acquired SolarCity for approximately $ 2.6 billion.
To convince shareholders to agree to the deal, Elon Musk hosted a zippy event in Hollywood where he held up a shiny shingle that he said was a miniaturized solar panel.
SolarCity was founded in 2006 by Musk’s cousins Peter and Lyndon Rive. It was backed by Musk, who served as CEO of both Tesla and SolarCity. Musk’s aerospace company SpaceX had also bought tens of millions of dollars in solar bonds from SolarCity.
Elon Musk speaks at SolarCity’s Inside Energy Summit in New York.
Rashid Umar Abbasi | Reuters
“The goal is to build solar roofs that look better than a normal roof, generate electricity, last longer, are better insulated and actually have less installation costs than a normal roof plus electricity costs. Why should you buy something? different? “said Musk at the October 2016 event.
Roof tiles would be the next big thing in residential solar energy, according to Musk, and once Tesla and SolarCity merged, the product would fuel the company’s growth while delivering clean energy to homeowners.
After the deal was closed, however, the new installations of Tesla SolarCity collapsed.
In the fourth quarter of 2017, Tesla reported a 43% decrease in solar systems compared to purchasing SolarCity. The company lost its market-leading position in 2018 and now holds around 2% of the residential solar market, according to Wood Mackenzie. In the first and second quarters of 2021, Tesla installed 92 and 85 megawatts of solar power, respectively. That’s less than half of what SolarCity installed per quarter prior to the acquisition.
Tesla transferred some solar workers to build the company’s electric cars and batteries, laid off other solar workers, and moved others who had done new installations to work on repairs and refurbishments.
Some of the solar roofs the company had installed caught fire. An employee who raised fire safety concerns internally and filed whistleblower complaints with federal agencies sued Tesla on the grounds that he wrongly terminated him in retaliation.
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Shareholders also sued, saying the takeover was a bailout for Musk and his family’s other businesses.
While the judge won’t rule the derivatives shareholder suit until early next year, Musk testified that the SolarCity deal was essential to realizing Tesla’s vision. He denied that SolarCity was in dire financial straits before Tesla acquired the company.
Today there is growing demand and new government support for residential and commercial solar systems in the United States.
But Tesla is still not producing or installing large numbers of the solar roof tiles. Most of the growth in the energy business comes from its energy storage systems – from backup batteries for households to large batteries for utility projects. Most of its solar income comes from installing traditional modules.
CNBC interviewed industry experts and new Tesla solar customers to find out how the company is delivering on its solar promises. Their experiences were mixed: customers in Washington, New York, and California complained about poor customer service and unexpected problems installing their solar panels, and others praised Tesla for making cars and systems that allow them to drive in sunshine.
Tesla did not respond to multiple requests for comment on this story.
Watch the video to hear their stories in full.