Number of Solar Installations by Tesla Declines, While Battery Sales Soar

Tesla’s once-dominant presence in the solar market has suffered a sharp decline, according to the latest data from its fourth-quarter 2023 earnings report.

The electric carmaker announced on Wednesday that its solar deployments plummeted by 36% to a total of 223 megawatts (MW) last year, a stark decrease from the 348 MW recorded in 2022. While high interest rates were a factor in slowing solar growth in some regions, Tesla’s decline stands in stark contrast to the overall success of the industry in the United States, where a record-breaking 33 gigawatts of solar capacity were added in 2023, according to estimations from the Solar Energy Industries Association (SEIA).

Despite the overall growth of the solar industry, it was a rough year for Tesla’s solar division – its worst since 2020. A closer look at the numbers reveals an even bleaker picture for the final quarter of 2023.

In Q4 2023, Tesla’s solar deployments plummeted by 59% year-over-year to only 41 MW – a significant drop from the 100 MW recorded in Q4 2022. While the company pinned some of the blame on high interest rates, no other explanations were provided for the decline in wattage. However, it is worth noting that Tesla has shifted its focus from installing solar panels to providing them as a supplier. This change in strategy resulted in layoffs of solar installers and numerous cancellations of scheduled “solar roof” installations last year, as reported by Electrek. It is important to remember that Tesla’s acquisition of SolarCity in 2016 for $2.6 billion was a major investment in the solar industry.

While Tesla’s solar business may be struggling, its energy generation and storage division is experiencing significant success (no surprises there). The company reported that its energy storage deployments, including the popular Powerwall home batteries and large-scale Megapacks, exceeded 14,724 megawatt hours (MWh) in 2023 – a staggering 125% increase from the previous year.

However, despite this impressive growth, Tesla reminded investors that there may be fluctuations in energy deployments on a quarterly basis, as evidenced by the fourth-quarter results. The company’s deployments in Q4 2023 totaled 3,202 MWh – a decrease from the previous three quarters, but a significant increase when compared to the 2022 fourth quarter.

It is clear that Tesla’s once-thriving residential solar business is not what it used to be. However, commercial and home batteries still play a crucial role in the transition to renewable energy sources. These batteries store clean energy that is only available intermittently and can also assist communities, islands, and even entire states in preparing for extreme weather by reducing peak demand on the grid and providing backup power during outages.