As a publicly-traded company, Tesla presents quarterly reports to shareholders, analysts, and the media about the state of the company. While most coverage of these quarterly earnings calls focuses on the company’s electric vehicle business or their financial standing, we want to provide an analysis of what their reports reveal about Tesla’s solar and storage business. With that in mind, here’s what you need to know from Tesla’s Q3 2019 earnings call:
Tesla’s solar business rebounds slightly
When Tesla moved into the solar business with its acquisition of SolarCity in late 2016, the company was only a year removed from its peak of accounting for one-third of solar installations nationwide. Since then, Tesla’s commitment to the solar business has steadily waned, with the company installing fewer and fewer megawatts (MW) of solar capacity quarter over quarter.
The third quarter of 2019 represented a small reversal of this trend, with a slight increase in solar installations over the Q2 2019. It will be interesting to see if this rebound continues into Q4 2019 and early 2020, or whether this is another brief blip on a downward trajectory for Tesla’s solar business.
Working to drive down soft costs
Although Tesla’s solar installations have been generally decreasing over time, a couple of interesting points on the earnings call indicate that they’ve been working behind the scenes on a few areas that could have a major impact in reversing that trend.
The soft costs of solar–the term used to primarily include costs associated with sales and marketing, permitting, inspection and interconnection–have been a hot topic in the industry lately. Recent estimates of soft costs, including from the National Renewable Energy Laboratory, indicate that they can account for more than $1 per Watt of the cost of solar, or more than a third of the overall price.
On Tesla’s earnings call, CEO Elon Musk and CFO Zachary Kirkhorn explained how Tesla is working to drive down solar soft costs by reducing spending on sales and marketing (famously, Tesla does not market), and by working with local governments to allow for generic, templatized solar permits, which should cut down on both the costs and the time it takes to install solar. If combined with similar efforts throughout the industry–like the Solar Energy Industries Association’s SolarApp–these efforts to decrease soft costs could have a major impact for all solar shoppers nationwide.
V3 of the solar roof launches
During Tesla’s earnings call, Elon Musk mentioned that the company would be launching the third version of the solar roof the following day, and sure enough we now have the official announcement about the updated solar roof. Based on the earnings call, the launch of the updated solar roof tile product, and articles written about initial contracts obtained by the press, there are three key differences to be aware of with version three of the Tesla solar roof.
First, on the call, Elon Musk pointed out that Tesla was “still sort of figuring things out” with the previous two versions of the solar roof, but expressed confidence in the company’s ability to effectively scale this third version of the solar tiles. Second, although a re-roofing process will likely take multiple days, Tesla is hoping to get to the point where the solar roof install takes as much time as a typical rooftop solar installation, with the whole process wrapping up in a single day. And, finally, Tesla is saying the pricing for the V3 of the solar roof will be competitive with the cost to replace your roof and then install solar panels on top of the new roof.
With many production issues for the solar tiles in the past, it will be interesting to track how effective Tesla is at actually ramping manufacturing and installation capacity for this new version.
Tesla’s storage business remains very strong
Before entering the solar business with its acquisition of SolarCity, Tesla was first and foremost an energy storage company, even if those batteries often were attached to four wheels. In Q3 of 2019, Tesla installed its most ever energy storage capacity, installing 477 megawatt-hours (MWh) of energy storage. For context, the entire US installed a total of 760 MWh of energy storage in 2018.
This is especially true in California, where the majority of the country’s residential energy storage is installed, either to improve the economics of solar or to increase a home’s resiliency to outages and wildfire events. According to EnergySage analysis of California interconnection data, in 2019, Tesla has outpaced other energy storage manufacturers in terms of total residential energy batteries installed, the overall capacity installed, and the overall stored energy installed in California.
Compare your solar options on EnergySage
The savings from solar aren’t only limited to customers shopping with Tesla. In fact, shopping for solar on EnergySage can save you 15 to 25 percent below market average pricing. To see how much you could save with solar, check out our online Solar Calculator. And if you’re ready to compare competing quotes from local solar installers, register for a free account on the EnergySage Marketplace.
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