Is Elon Musk Making Solar Panels?

Elon Musk is an entrepreneur and business magnate best known for founding companies like Tesla, SpaceX, Neuralink, and The Boring Company. He first made his fortune as a co-founder of PayPal, which was sold to eBay in 2002 for $1.5 billion. Musk has since focused his efforts on accelerating the transition to sustainable energy through electric vehicles, solar power, and battery storage.

Musk became CEO of Tesla in 2008 after leading the company’s early Series A funding round. Tesla manufactures electric vehicles as well as energy storage products like the Powerwall home battery. In 2016, Tesla acquired SolarCity in a controversial $2.6 billion deal. SolarCity, co-founded by Musk’s cousins Lyndon and Peter Rive in 2006, is one of the leading residential solar panel installation companies in the U.S. The acquisition aligns with Musk’s vision of accelerating the world’s transition to sustainable energy.

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Tesla’s Solar Roof Tiles

In 2016, Tesla acquired SolarCity and officially entered the solar panel market. Shortly after, Tesla announced their new solar roof tile product (https://www.tesla.com/solarroof). The solar roof tiles are glass tiles embedded with solar cells that are designed to resemble conventional roofing tiles. When installed on a roof, the solar tiles can generate electricity from sunlight.

Tesla’s solar tiles aim to provide an aesthetically pleasing solar option that blends seamlessly into the roof design. Unlike traditional solar panels that are mounted on top of existing shingles, Tesla’s solar tiles replace the entire roof. This allows the solar cells to be integrated directly into the roof structure rather than sitting on top of it. According to Tesla, their solar tiles are durable, weather-resistant and provide comparable electricity generation to traditional solar panels.

The solar tiles are offered in a variety of styles that closely replicate the look of traditional roofing materials such as slate and terracotta tiles. This allows homeowners to install an integrated photovoltaic system on their roof that matches or complements the aesthetic style of the home.

SolarCity Acquisition

In 2016, Tesla acquired solar panel manufacturer SolarCity in a deal worth $2.6 billion in Tesla stock. At the time, Elon Musk was the chairman and largest shareholder of both Tesla and SolarCity, owning 22% of SolarCity and 23% of Tesla.[1]

Some Tesla shareholders alleged that Musk pushed the company to overpay for SolarCity, which was struggling financially. However, in 2022 a Delaware court ruled in favor of Musk in a shareholder lawsuit, determining that the deal was fair.[2]

Acquiring SolarCity allowed Tesla to vertically integrate solar panel manufacturing and strengthen its renewable energy business. While initially controversial, the acquisition has proven strategically important for Tesla’s solar panel and solar roof tile ambitions.

Gigafactory 2

In 2016, Tesla acquired solar panel manufacturer SolarCity. As part of this deal, Tesla took over SolarCity’s solar panel factory in Buffalo, New York, which was originally intended to be the largest solar panel factory in the Western Hemisphere.[1]

Tesla renamed the facility Gigafactory 2 and planned to use it to manufacture solar roof tiles and conventional solar panels. The factory was built with $750 million in investments from New York State as part of the Buffalo Billion initiative, with the goal of revitalizing the local economy.[2]

However, Tesla has struggled to ramp up production at Gigafactory 2. The solar roof tile technology has proven difficult to manufacture efficiently. As of mid-2022, the factory was still only utilizing about a quarter of its planned production capacity.[3] While Tesla aims to increase output in the future, the factory’s slow start has led to criticism and questions about the effectiveness of New York’s investments.

Partnerships

One of Tesla’s most important partnerships is with Panasonic for solar panel manufacturing. Tesla and Panasonic have collaborated since 2010 on battery technology at Tesla’s Gigafactory in Nevada. In 2016, Tesla and Panasonic finalized an agreement to begin manufacturing photovoltaic cells and modules at Tesla’s factory in Buffalo, New York.

The goal of the partnership was for Tesla to use Panasonic’s high-efficiency solar cells and modules in its Solar Roof products as well as the Powerwall and Powerpack products. Panasonic planned to cover part of the capital costs and Tesla was to provide the facilities, equipment, and utilities. Production began in 2017.

However, in February 2020, Panasonic announced it would stop solar cell production at the Buffalo factory by the end of May 2020 due to poor sales and exit the facility completely by September 2020, ending this aspect of their partnership. Tesla will still continue solar panel production at the factory using Panasonic technology.

While the manufacturing collaboration is winding down, Panasonic and Tesla maintain strong ties and partnerships in other areas like batteries for electric vehicles (Source: https://energy5.com/everything-you-need-to-know-about-panasonic-partnership-with-tesla). Their innovative work together helped advance solar and battery products even if their solar panel business model did not succeed as planned.

Solar Panel Business Model

Tesla is marketing and selling solar products primarily through direct sales to residential and commercial customers. According to Tesla’s website, customers can purchase solar panels directly from Tesla online or by visiting a Tesla store or service center [1]. Tesla offers solar panels, solar roof tiles, and energy storage options like Powerwall batteries.

The key aspects of Tesla’s solar business model include vertically integrating solar panel production through acquisitions like SolarCity, pairing solar panels with energy storage, and leveraging the Tesla brand to reach customers [2]. Tesla aims to provide an end-to-end clean energy solution. However, Tesla’s solar deployments have been declining recently as it faces competition and challenges ramping production [3].

Tesla Solar Panel Reviews

Tesla’s solar panels have received generally positive reviews, according to various third-party sources. CNET notes that Tesla solar panels have maximum efficiency ratings ranging from 19.3% to 20.9%, comparing favorably to competitors. Reviewers on Reddit and other sites praise the quality of Tesla panels and the knowledgeable installers.

According to MarketWatch, Tesla solar panels come with a 25-year performance guarantee ensuring output, and a 10-year comprehensive warranty. This provides buyers peace of mind on durability. While more expensive than some competitors, Tesla panels are high-efficiency and backed by strong warranties. Overall, reviews suggest Tesla makes durable, efficient solar panels that provide good value.

Growth and Market Share

Tesla’s solar business has seen steady growth in recent years. After acquiring SolarCity in 2016, Tesla became the leading residential solar provider in the U.S. for a period. However, the company ceded market share in subsequent years as competitors like Sunrun grew aggressively. In 2021, Tesla held just 3.9% of the U.S. residential solar market, dropping to fourth place behind Sunrun, Vivint Solar, and Sunnova [1].

More recently, Tesla has invested heavily in ramping up solar deployments again. In 2022, the company boosted its U.S. market share back up to 4.2%, despite the overall market contracting. While still behind Sunrun’s 19% share, Tesla showed strong solar installation growth last year and appears poised to continue gaining share [2].

Tesla’s solar roof product has also seen wider rollout, and the company is expanding solar manufacturing capacity at Gigafactory 2 in Buffalo, NY. With solar key to Tesla’s clean energy vision, Musk aims to significantly scale the business in the coming years.

Competitive Landscape

The solar industry is highly competitive with many major players vying for market share. Some of the top solar companies in 2024 include:

Sunrun – The largest residential solar installer in the US, with over 600,000 customers. Sunrun offers solar panel purchase, leasing, and power purchase agreements.

ADT Solar – A subsidiary of home security company ADT. Known for excellent customer service and innovative monitoring technology.

SunPower – Manufactures its own high-efficiency solar panels and is a leading global supplier. Known for premium products.

Canadian Solar – One of the world’s largest solar panel manufacturers, supplying modules worldwide.

While Tesla is a relative newcomer to the solar industry, its brand recognition, vertical integration, and ability to leverage its EV business give it advantages. However, it faces stiff competition from established players as it tries to gain market share.

Conclusion

In summary, Tesla and Elon Musk have made major moves into the solar panel business in recent years. The highlights include:

Launching the Solar Roof tile product to integrate solar panels into roofing.
Acquiring SolarCity in 2016, making Tesla one of the nation’s leading solar installers.
Building Gigafactory 2 in Buffalo, NY dedicated to solar panel production.

Partnering with Panasonic to produce solar cells and panels.

While the solar shingle market is still nascent, Tesla has quickly become a major player in the broader solar panel industry. Its acquisitions and manufacturing investments have positioned it as one of the market share leaders in the US residential solar space. With the Tesla brand behind solar products, unique innovations like Solar Roof, and Elon Musk’s environmental motivations, Tesla is poised to continue growing its share of the solar panel market.