Tesla blamed for dip in US Solar panel sales
After years of double-digit growth, home solar installations in the US are poised to fall for the first time this year, according to GTM Research.
The reason? An analysis of installation data suggests that most of the slowdown is traceable to a single company: Tesla, which acquired sister company SolarCity about a year ago. For years, SolarCity, with early backing from Tesla CEO Elon Musk, was the biggest player in residential solar and the driving force behind that market’s supercharged growth.
When Tesla bought SolarCity last year, Mr Musk called the acquisition a “no-brainer,” saying the two firms shared “the same overarching goal of sustainable energy.” But under Tesla’s ownership, the company has largely stopped its aggressive marketing campaigns and ambitious expansion. As a result, Tesla’s rooftop solar installations have fallen sharply each quarter this year compared to last.
In the third quarter, installations were off by 42 per cent over the previous year. Tesla declined to comment for this story, but has previously said that while sales are down, margins are up. It expects its Q4 solar installation numbers to be higher than those of the Q3. Overall, the residential solar market is expected to fall 13 per cent this year, according to GTM’s US PV Leaderboard report. That compares with a 19 per cent rise last year and four straight years before that of increases above 50 per cent.
SolarCity was responsible for an outsized portion of that growth, accounting for a quarter of the national market in 2016 and more than 30 per cent the previous two years. By Q3 of this year, its share had dropped to 14 per cent, according to the GTM report. “If SolarCity accounted for a 30 percent share of the national market and you cut those installation volumes effectively in half, that’s really what we are looking at in terms of the market downturn in 2017,” said Austin Perea, who tracks the U.S. residential solar market for GTM. SolarCity’s growth was fueled in part by a no-money-down offering that enabled residential customers to pay a monthly fee to go solar. The business generated huge sales volumes but led to investor concern about debt.