The Struggle of Tesla's Solar Roof: Examining Elon Musk's Ambitions and Setbacks in Solar Energy
Tesla’s ambitious plans to revolutionize the rooftop solar industry by launching its solar glass roof tiles, commonly known as the Solar Roof, have fallen short of expectations. According to a recent study by Wood Mackenzie, the company has installed only 3,000 Solar Roof systems in the US since its launch seven years ago. This number is far below the company's forecast and guidance, which aimed to produce and install 1,000 Solar Roofs per week in 2019.
Tesla’s struggle to integrate a solar energy business into its electric car company started after the 2016 acquisition of SolarCity, a solar installer founded and run by Elon Musk's cousins, Peter and Lyndon Rive, with Musk's help. At the time of the acquisition, Musk was serving on the board of both businesses and touted the solar shingle technology as the future of rooftop solar.
However, average weekly Tesla Solar Roof installations reached just 21 in 2022, a far cry from the company's initial goal of 1,000 per week. Despite Tesla hitting a high of 32 average weekly installations in the US in the first quarter of last year, the company has not been able to meet its projected production goals.
Musk's initial promotion of the shingle-style solar panel in October 2016 was met with skepticism as it was not a working prototype. Nonetheless, Musk invested significant capital in SolarCity and served as board chairman while helming Tesla and SpaceX. A group of Tesla shareholders later sued the company and Musk over the deal, alleging that the SolarCity purchase was a bailout pushed by Musk because his personal wealth and reputation were at stake. While the Delaware Court of Chancery ruled in favor of Musk in a bench trial, the shareholders' lawyers are currently pursuing an appeal in the Delaware Supreme Court.
Despite the challenges facing Tesla’s Solar Roof effort, the company's traditional solar panels have seen some improved traction in the market. Although traditional solar-panel installations shrank considerably from 2016 to 2020, they have been on the rise along with broader growth in the residential solar industry. In 2021, Tesla's installations of traditional solar panel systems had a power generation capacity of 156 megawatts, which increased to 248 megawatts in 2022.
Tesla had initially planned to produce all of its solar roof tiles in-house, but the company has shifted gears and is now obtaining photovoltaic glass from Almaden, a Chinese supplier. Moreover, a rival residential roofing company called GAF Energy has entered the market and started manufacturing and selling its own solar shingle to homeowners in 2022.
Despite these setbacks, Tesla remains committed to its mission of accelerating the world's transition to sustainable energy. The company tweeted after the Wood Mackenzie report's publication, stating that the study "is incorrect by a large margin." Although Tesla's Solar Roof effort has faced challenges, the company's traditional solar panel installations show that there is still a strong demand for solar energy in the residential market. As the world continues to shift towards renewable energy, Tesla is well-positioned to lead the charge.