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Tesla Energy update: 110MWh of energy storage and 109MW of solar

In Tesla’s Q3 2017 earnings report, they gave an update on their ‘Tesla Energy’ division. They highlighted being on track to meet the 100-day deployment deadline of the 100MW/129MWh energy storage project for South Australia. Mention was made of the work being done in Puerto Rico in the aftermath of Hurricane Maria – ‘solar panels, Powerpacks and hundreds of PowerWalls.’

Additionally, Tesla – at multiple points – pointed toward a future of more revenue from energy generation and storage. 11% of the quarter’s revenue came from the Tesla Energy division.

110MWh of energy storage was deployed in the quarter. This represented 12% quarter-to-quarter growth and 138% year-over-year growth. The report notes that the South Australia project’s revenue will be recognized at the deployment of said project. Currently, 80% of 129MWh (103.2MWh) of the total Powerpacks are deployed.

Tesla is hopeful of increased margins of energy storage with higher capacity utilization as well lowering manufacturing costs.

109MW of energy generation was deployed in Q3. Tesla says this deployment slowdown is part of a deliberate de-emphasization of commercial and industrial solar energy projects due to ‘low profits and limited cash generation.’ 176MW of energy generation was deployed in Q2’17 – this would be a 38% drop. SolarCity installed 187MW in Q3’16. Breakouts by system size are not available.

46% of residential solar projects were sold versus leased – up from 13% in Q3’16. More than 50% from sales for cash are expected in Q4.

Solar Roof installations are expected to ramp slowly in Q4 as the Solar Roof production process moves from Fremont to Buffalo. Tesla says volume will increase as they fine tune and standardize the production and installation process. An expectation of Solar Roof ramping in 2018 is said twice. In May, Tesla noted that the solar roof was sold out “well into 2018.

SolarCity employees were included as part of the recent Tesla layoffs.

Total revenue for the company in the quarter was about $2.68B – energy generation and storage comprised 11.8% of that total. This total revenue was up from 11% in the prior quarter, even with revenue from solar generation lower due to seasonality and the 38% lower deployments. Revenue from energy generation and storage are not broken out.

Gross margins in the Tesla Energy division were down from 28.9% to 25.3% due to energy storage product’s current lower margins but increasingly larger portion of the overall revenue of the division.

Tesla notes $6.3B worth of solar energy systems, leased and to be leased, under their assets. This number is up 6.2% from Q2.

Losses related to the acquisition of SolarCity were $18.2M in the quarter. Interest expenses as a result of SolarCity assumed debt were $8.9M and $24M for resource and non-recourse debt, respectively. Net losses, per share, related to the SolarCity acquisitions were $0.11 in the quarter.

$128M in payments for the cost of solar energy systems, leased and to be leased, were made in the quarter. This number was down 35% from Q2’17 and 42% from Q1’17.

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