Tesla’s once-leading solar business is facing a decline, as indicated by the latest figures from its fourth-quarter 2023 earnings report.
“In 2023, Tesla’s solar deployments plummeted by 36%, totaling only 223 megawatts (MW), a significant drop from 348 MW in 2022.”
Although high interest rates played a role in slowing solar growth in certain markets, this decline stands in stark contrast to the United States’ record year for solar energy. The country added an impressive 33 gigawatts of solar capacity in 2023, according to estimates from SEIA, a prominent solar industry group.
This was undoubtedly a tough year for Tesla’s solar division – its worst performance since 2020. But if we examine the numbers more closely, the fourth quarter of 2023 looks even bleaker.
In Q4 2023, Tesla’s solar deployments dropped by a staggering 59% year-over-year, with only 41 MW installed compared to 100 MW in Q4 2022. While the company did cite high interest rates as a contributing factor, it offered no further explanation for the decrease in wattage. However, it’s worth noting that Tesla’s shift in strategy from solar installer to supplier may have also played a role. Last year, the automaker laid off several of its solar installers and canceled numerous “solar roof” installations, as reported by Electrek. It was just over seven years ago that Tesla acquired SolarCity for $2.6 billion.
On the positive side, Tesla’s energy generation and storage business is experiencing significant growth (no surprise there). In 2023, its energy storage deployments – including popular products like Powerwall home batteries and large-scale Megapacks – exceeded 14,700 MWh, an impressive 125% increase from the previous year.
“However, Tesla did comment that it anticipates fluctuations in energy deployments quarter-by-quarter, and the results from Q4 confirm this. While the company deployed 3,202 MWh in Q4 2023, this figure was lower than the previous three quarters. However, it does show an increase when compared to the same quarter a year earlier, Q4 2022.”
While Tesla’s residential solar business may not be what it once was, its commercial and home battery offerings continue to play a crucial role in the transition to renewable energy sources. These batteries not only store clean energy for later use during periods of intermittency, but they also offer communities, and even entire islands and states, the ability to prepare for extreme weather events by reducing peak energy demand and providing backup power during outages.
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