Tesla responsible for slide in US home solar sales

After years of double-digit growth, home solar installations in the United States are poised to fall for the first time this year, according to a report by GTM Research. The reason? An analysis of installation data suggests that most of the slowdown is traceable to a single company: Tesla Inc, which acquired sister company SolarCity about a year ago.
For years, SolarCity, with early backing from Tesla CEO Elon Musk, was the biggest player in residential solar and the driving force behind that market’s supercharged growth.
When Tesla bought SolarCity last year, Musk called the acquisition a “no-brainer,” saying the two companies shared “the same overarching goal of sustainable energy.”
But under Tesla’s ownership, the company has largely stopped its aggressive marketing campaigns and ambitious expansion.
As a result, Tesla’s rooftop solar installations have fallen sharply each quarter this year compared to last. In the third quarter, installations were off by 42 per cent over the previous year.
Tesla said that while sales are down, margins are up. The company expects its fourth-quarter solar installation numbers to be higher than those of the third quarter.
Overall, the residential solar market is expected to fall 13 per cent this year, according to GTM’s quarterly solar market report. That compares with a 19 per cent rise last year and four straight years before that of increases above 50 per cent.
SolarCity was responsible for an outsized portion of that growth, accounting for a quarter of the national market in 2016 and more than 30 per cent the previous two years. By the third quarter of this year, its share had dropped to 14 per cent, according to GTM’s US PV Leaderboard report.
“If SolarCity accounted for a 30 per cent share of the national market and you cut those installation volumes effectively in half, that’s really what we are looking at in terms of the market downturn in 2017,” said Austin Perea, who tracks the US residential solar market for GTM.
SolarCity’s rapid growth was fuelled in part by a no-money-down offering that enabled residential customers to pay a monthly fee to go solar. The business generated huge sales volumes but led to investor concern about debt. In many ways SolarCity’s rise helped lift the fortunes of smaller rivals.
“They spent a lot of money making people aware of what solar can do and all of us little guys have been the beneficiaries of that,” said Jim Petersen, chief executive of Fremont, California-based PetersenDean, who said his company is forecasting sales growth of 7 to 9 per cent this fiscal year.
Tesla stopped selling installations door-to-door earlier this year, eliminating a major way it reached new customers. It now sells systems in its high-end retail stores, where cars and batteries are also sold. — Reuters