Tesla’s once-dominant solar business is on the downturn, as revealed in the latest statistics from their fourth-quarter earnings report of 2023.
The figures speak for themselves; Tesla’s solar deployments plummeted by 36%, with a total of 223 megawatts (MW) in the past year, compared to 348 MW in 2022.
While interest rates may have hindered solar growth in certain markets, the United States as a whole saw a record-breaking year. With an estimated 33 gigawatts of solar capacity added in 2023, according to SEIA, a prominent industry group.
Unfortunately for Tesla, this past year was the toughest for their solar business since 2020. And even looking at the final quarter of 2023, things appear to have taken a turn for the worse.
In Q4 2023, Tesla’s solar deployments saw a staggering 59% decline year-over-year, with only 41 MW installed compared to 100 MW in Q4 2022. Despite citing high interest rates as a factor, the company has not provided any further explanation for this significant drop in wattage. However, it should be noted that Tesla shifted its strategy from installer to supplier, resulting in layoffs of solar installers and cancellation of scheduled “solar roof” installations, as reported by Electrek. This change in direction is a sharp contrast to when Tesla acquired SolarCity seven years ago for a whopping $2.6 billion.
But despite the decline in solar, Tesla’s energy generation and storage business continues to thrive (no surprise there). In fact, the company reported that their energy storage deployments, including the popular Powerwall home batteries and massive Megapacks, reached 14,724 megawatt hours (MWh) in 2023, representing an explosive 125% increase from the previous year.
However, Tesla did acknowledge that their energy deployments may experience some fluctuations quarter-by-quarter, as evidenced by their Q4 results. Although they deployed 3,202 MWh in this past quarter, it was a decrease from the previous three quarters. However, when compared to the same quarter in 2022, there was still a noticeable uplift.
While Tesla’s residential solar business may not be at the same scale as it once was, it’s important to remember that both commercial and home batteries play a vital role in the transition to renewable energy sources. These batteries serve as a way to store clean energy that may not always be available, and can even aid communities, islands, and even entire states by reducing peak demand on the grid and providing backup energy during power outages.