After being the leader in solar installations for years, Tesla has now slipped to third place for solar installations in the US after restructuring its energy business.
The news comes after Wood Mackenzie updated its U.S. PV Leaderboard:
“Tesla installed 6.3 percent of U.S. residential solar capacity in the first quarter of 2019, marking the first time the company has fallen to third place since Wood Mackenzie Power & Renewables has been tracking installer market shares in its U.S. PV Leaderboard, dating back to Q1 2013. Vivint Solar reclaimed the number two for the first time since falling to third in Q3 2017.”
On the chart, you can see Tesla rapidly letting go of its hold on the market:
Tesla used to install a third of the residential solar capacity in the US alone. Now all top 3 companies combined represent 25 percent of the market.
Wood Mackenzie Senior Solar Analyst Austin Perea said about Tesla slipping to third place:
“Tesla has essentially thrown in the towel on pursuing growth in the residential solar space because it has concluded that acquiring customers is simply too expensive. Rather, Tesla will rely on its brand power and low-cost referral methods to keep the solar business afloat until it stabilizes,”
SolarCity has long been the biggest residential solar company in the country, but it also consistently delivered losses throughout its existence.
It pioneered new models to sell solar power systems with no upfront cost by leasing them to homeowners and selling them the electricity it generates, like a regular electric utility.
The model created impressive growth, but it required them to pay for the costly systems upfront on most installations, which weighed heavy on their financials.
When Tesla acquired SolarCity back in 2016, it gradually moved away from that model in order to make the company more sustainable, but it also destroyed its growth.
Now as part of Tesla Energy, its solar business saw its revenue plunge every quarter and gross profits are down as well.
CEO Elon Musk has been guiding a reversal of that trend in 2019 with a ramp-up of the Tesla solar roof tiles and solar panels for the roof retrofits.
Earlier this year, Tesla announced a plan to revive its solar business by undercutting the competition with <$2 per watt systems.
Musk also wants Tesla to differentiate itself from the competition with different products, like the solar roof tiles and new more efficient, premium panels.
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