Tesla, Inc reported significantly lower than guided solar installations for the fourth quarter of 2016, after the first quarter of integration of acquired SolarCity.
Tesla reported only 201MW of solar installations in the fourth quarter of 2016, compared to previously guided SolarCity expectations of installations reaching 298MW, down from second quarter guidance of between 315MW and 415MW.
Try Premium for just $1
- Full premium access for the first month at only $1
- Converts to an annual rate after 30 days unless cancelled
- Cancel anytime during the trial period
Premium Benefits
- Expert industry analysis and interviews
- Digital access to PV Tech Power journal
- Exclusive event discounts
Or get the full Premium subscription right away
Or continue reading this article for free
Previous full-year guided installations from SolarCity had been in the range of 900MW to 1,000MW. Actual 2016 installations failed to meet the lower revised figure set in the third quarter of 900MW. Instead, total 2016 solar installs were around 803MW.
Tesla noted in its financial release that it planned ‘to prioritize cash preservation over growth of MW deployed,’ a clear indication of the cash burn impact on the company from the SolarCity acquisition.
The company said that it was in a transition mode for the solar segment of the business, named ‘Advanced Sustainable Energy.’ The plan includes the reduction in customer acquisition costs by cutting advertising spending, selling solar products in Tesla stores, and shifting from leasing to selling solar energy systems, according to Tesla, echoing the claimed cost synergies touted prior to the SolarCity acquisition.
Tesla also noted that despite the significant curtailment in solar installations instigated in the fourth quarter, its solar operations added US$77 million of cash during the six weeks following the close of the acquisition, due to 28% of solar capacity deployed during the fourth quarter sold rather than leased. This was up from only 13% in the previous quarter, under SolarCity.
References to MW of solar energy generation deployed and the mix of solar systems that were sold or leased include the full fourth quarter figures, while revenue was only recognised from the close of the acquisition on November 21 to December 31, 2016, according to Tesla.
Tesla reported ‘energy generation and storage revenue’ in the fourth quarter of 2016 of US$131.3 million, up from US$23.3 million in the third quarter.
The company also renamed the former SolarCity PV manufacturing plant in Buffalo, New York State as Gigafactory 2. Gigafactory 1, based in Nevada is home to its JV battery plant with Panasonic.
Gigafactory 2 is also the soon to be home of production of solar cells and PV modules produced by Panasonic for Tesla, notably its new roof tile system. Tesla said that the solar roof launch would happen in the second half of 2017. The company had previously noted that Panasonic planned to be operating at the production plant in the summer of 2017.
Despite the forced curtailment of solar installations in the fourth quarter, Tesla retained its position as the largest US residential and commercial solar installer in 2016.
