Tesla’s solar sales decline as battery enterprise thrives

Tesla’s Solar Business Takes a Hit in Latest Earnings Report

The latest figures from Tesla’s fourth-quarter 2023 earnings report reveal a decline in its once-leading solar business. The automaker announced on Wednesday that its solar deployments dropped by 36%, reaching only 223 megawatts (MW) in 2023 compared to the previous year’s 348 MW. While the U.S. added a record-breaking 33 gigawatts of solar capacity in 2023, Tesla’s shrinkage came as a surprise in the industry.

Sadly, 2023 was a difficult year for Tesla’s solar business, marking its worst performance since 2020. Looking closer, the final quarter of 2023 was even bleaker. In Q4, the company’s solar deployments plummeted by 59% year-over-year, with only 41 MW installed compared to 100 MW in the same quarter of 2022. Aside from blaming high interest rates, Tesla offered no further explanation for the decline. However, some speculate that the company’s shift from installer to supplier may have played a role. Reports indicate that Tesla laid off solar installers and cancelled scheduled “solar roof” installations last year. It’s worth noting that Tesla acquired SolarCity for $2.6 billion over seven years ago.

While the news for solar may be disheartening, Tesla’s energy generation and storage business is thriving, which should come as no surprise. The company reported a 125% increase in energy storage deployments in 2023, topping 14,724 megawatt hours (MWh). However, Tesla did warn of potential volatility in energy deployments quarter-by-quarter, which is reflected in its Q4 results. The company deployed 3,202 MWh in Q4 2023, lower than the prior three quarters but still higher compared to the same quarter in 2022.

Although Tesla’s residential solar business may not be as strong as it once was, its commercial and home batteries still play a crucial role in the transition to renewable energy sources. These batteries store clean energy for later use, helping communities and even entire states prepare for extreme weather events by reducing peak demand on the grid and providing backup energy during power outages.

Overall, while Tesla’s solar business may be experiencing a decline, its energy generation and storage business continue to thrive. With a growing focus on renewable energy, the role of these technologies in combatting climate change cannot be ignored. As Tesla works through potential challenges in the solar industry, there is still hope for a brighter, cleaner future ahead.