Tesla CEO Elon Musk said he expects the company to address component shortages that limited the progress of its solar business in the first quarter of 2021, as installs decreased 48% year-on-year.
After Tesla added 92MW of solar in Q1 2021, this fell to 48MW in Q1 2022 – representing the company’s second-worst quarter on record for solar deployment and its lowest figure for installs since Q2 2020. Q1 solar deployment was also down 44% on Q4 2021, when 85MW was added.
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The year-on-year decline was caused by “import delays beyond our control on certain solar components”, Tesla said, without specifying which parts were affected.
|Solar deployed (MW)
Tesla’s energy business has continued to be impacted by macro conditions, more severely than the company’s vehicle business, according to CFO Zachary Kirkhorn. “Our storage products, our need of chip supply and new import processes have impacted supply of certain components for our solar systems, which is reflected in our solar volume for the quarter,” he said during a conference call with investors.
While a record 4.2GWdc of residential solar was installed in the US in 2021, elevated component pricing and supply chain issues worsened throughout the year, with industry players experiencing tight module availability in Q4 and heading into 2022, according to recent research from the Solar Energy Industries Association (SEIA).
Since that was published, US solar companies have also been hit by widespread module supply cancellations and delays after the country’s Department of Commerce announced it would investigate alleged circumvention of antidumping and countervailing duties (AD/CVD) by manufacturers in Cambodia, Malaysia, Thailand and Vietnam.
More than 90% of respondents to a SEIA survey said the decision to investigate is having a “severe or devastating impact” on their business.
Despite the impact of part shortages in Q1, Musk remains bullish about the remainder of 2021. “We expect batteries and solar to also grow well this year,” he said.
Deployment of Tesla’s Solar Roof product, which integrates PV modules directly into roof tiles, continued to grow year-on-year Q1, but no installation figures were provided.
Tesla’s Q1 energy storage additions were up 90% year-on-year, as the company added 846MWh, with the growth mainly driven by demand for its Powerwall home battery. The company said that with battery storage demand currently substantially above capacity, growth has been limited by ongoing supply chain challenges.
Revenues from Tesla’s energy generation and storage division in Q1 were up 25% year-on-year to US$616 million, but fell 10% on Q4 2021. While the unit posted a profit during two quarters last year, a $72 million loss was recorded in Q1.
Conference call transcript from Seeking Alpha.