Financial reports for the fourth quarter of 2023 have revealed a decline in Tesla’s once-thriving solar business. The automaker’s solar deployments plummeted by 36% last year, with only 223 megawatts installed compared to 348 megawatts in 2022. This decline comes at a time when the United States’ solar industry experienced record growth, adding 33 gigawatts of solar capacity in 2023, according to SEIA.
The year 2023 was a rocky one for Tesla’s solar business, marking its worst performance since 2020. But if we focus on the final quarter, the numbers are even more disheartening.
In the fourth quarter of 2023, Tesla’s solar deployments plummeted by 59% from the same quarter in 2022, with only 41 megawatts installed. The company has attributed this decline to high interest rates, but offered no further explanation. Some speculate that Tesla’s shift from installer to supplier may have also played a role, as the company laid off solar installers and cancelled scheduled “solar roof” installations last year.
It’s worth noting that Tesla’s energy generation and storage business is thriving, with a 125% increase in energy storage deployments last year. This includes installations of Powerwall home batteries and utility-scale Megapacks. However, even with this overall success, Tesla recognizes the potential for volatility in their energy deployments quarter-by-quarter, as reflected in their Q4 results.
Tesla deployed 3,202 megawatt hours of energy storage in Q4 of 2023, which is lower than the previous three quarters but still higher than Q4 of 2022. This indicates growth in the company’s energy business, but also highlights the potential for fluctuations in their performance.
While Tesla’s residential solar business may not be what it once was, its commercial and home battery installations remain crucial in the transition towards renewable energy sources. These batteries not only store clean energy for later use, but also aid in disaster preparation by reducing demand on the grid and providing backup energy during power outages for entire communities, islands, and states.
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