Tesla solar growth continues but ‘significant mistakes’ in roof assessments holding back Solar Roof progress

A schematic showing the make-up of a Solar Roof from Tesla. Image: Tesla.

Tesla’s residential solar growth has continued into Q1 2021, but CEO Elon Musk has confessed to encountering major issues in roof assessments, which have stymied installs of its Solar Roof product.

Late yesterday Tesla reported its Q1 2021 results, confirming that during the three months ending 31 March 2021 the company had installed 92MW of solar, its strongest quarter in two-and-a-half years. That figure is a 162% increase on the 35MW it installed in Q1 2020 and a near 7% increase sequentially.

The company noted that demand for its Solar Roof product, launched to much fanfare in late 2016, was up nine-fold year-on-year, demand which Musk described as strong and “significantly in excess” of the company’s ability to meet. The product has been a long time in the making, having encountered numerous delays in ramping.  

But Musk also stressed that the company had identified that it had made some “significant mistakes” in the assessments of installation difficulty in certain roofs, adding that the “complexity of roofs varies dramatically”.

“Some roofs are literally two times or three times easier than other roofs. So, you just can’t have a one size fits all situation.

“If a roof has a lot of protuberances or if the… core structure of the roof is rotted out or is not strong enough to hold the Solar Roof, then the cost can be double, sometimes three times what our initial quotes were,” Musk told analysts.

There had been numerous reports linking Tesla with a significant increase in price hikes for its Solar Roof product, some quotes – as Musk noted in the call – had been double or treble the initial quote. This had prompted concern by consumers, however Musk did qualify yesterday that customers can choose to have their deposit refunded in this situation.

Further reports had suggested Tesla was beginning to compensate customers who had experienced major increases in quoted prices for Solar Roof installs with free Powerwall batteries, aligning with the company’s new initiative to only sell solar alongside its Powerwall as a single, integrated product. Musk tweeted about this change in policy last week, however little insight was provided at the time.

Tesla disclosed yesterday that the reasoning behind this move was partly owing to a significant, multi-quarter backlog of Powerwall orders, with demand continuing to far outstrip production rates. Musk further attributed this to “insane difficulties” in its supply chain.

But the move also plays into a wider shift from the company to plug into wider energy transition trends around turning home solar-storage installations, both individual and aggregated, into miniature power stations in their own right. More on this strategy will be discussed later this week on PV Tech Premium.

Tesla also noted during its results disclosure that the move to only sell solar and energy storage as an integrated product could yet prove to be temporary, depending on product availability moving forward.

Meanwhile, Tesla noted that energy storage installations stood at 445MWh in Q1 2021, up around 70% on the 260MWh installed in Q1 2020, but down around 70% on the 1.5GWh installed in Q4 2020.

This performance, alongside solar installs, contributed towards revenues from its energy segment of US$494 million for the quarter, an increase of 68% on the division’s revenue performance in Q1 2020. Cost of revenues attributed to the segment stood at US$595 million, leading to the division reporting a negative gross margin (around -$101 million) for the second quarter running.

Zachary Kirkhorn, chief financial officer – or ‘Master of Coin’ as Tesla has recently designated that role – said the negative margin was attributable to continued high ramp costs associated with the Solar Roof product as well as winter seasonality affecting the lease BPA business.

29 November 2022
PV ModuleTech EMEA in Madrid on 29-30 November 2022 will address the factors underpinning the changing PV module landscape, gathering together all the key stakeholders across the value-chain from module production to field testing. Join us for presentations from the leading players in the sector, clearly identifying the opportunities and challenges set to impact module supply to Europe and the Middle-East over the next few years.

Read Next

August 3, 2022
A continued demand from Americans for rooftop solar has led SunPower to add a record all time high of 19,700 customers in Q2 2022.
August 3, 2022
Global investment in renewable energy reached a record half-year figure of US$226 billion in H1 2022, driven by soaring demand for clean energy technologies amid the ongoing energy and climate crisis, according to a BloombergNEF (BNEF) report.
August 3, 2022
Inverter manufacture SolarEdge has posted record revenues and inverter shipments for Q2 as it benefited from strong demand for its products in the US and Europe, while addressing previous supply chain problems that had hampered performance in the previous quarter.
August 2, 2022
Swiss PV module manufacturer Meyer Burger has slashed its production plans for 2022 and 2023, citing a “challenging supply chain environment” which has caused delays to its planned production capacity build out.
July 29, 2022
Residential installer Sunnova continues to reduce its net loss while recording its best quarter in terms of sales during the second quarter.
PV Tech Premium
July 29, 2022
Sun Cable, the developer of an installation that bids to transmit renewable electricity from Australia to Singapore, will use proven technologies that have been deployed at projects around the world.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
September 7, 2022
15:30 AEST (UTC +10)
Solar Media Events
September 14, 2022
Solar Media Events
October 4, 2022
New York, USA
Solar Media Events
October 11, 2022
Virtual event