Tesla experienced substantial year-to-year growth in its solar business by the end of 2021, but the supply chain crisis may hinder its growth for the next foreseeable year.
According to the car company’s latest earnings report, Tesla deployed 85 megawatts of solar in the final quarter of 2021. This was slightly higher compared to the 83 megawatts it deployed in the third quarter and a 1% decrease from the same time last year. This resulted in a total of 345 megawatts of solar deployed in 2021, up 68% from the 2020 total of 205.
The number of Solar Roofs deployed was not detailed in the earnings report, though the company claimed deployment tripled year-over-year in 2021 and continued to grow sequentially in Q4.
“We are making further cost improvements, particularly on installation, to increase energy profitability,” the Tesla earnings report stated.
On the other side of the solar equation is energy storage. Tesla deployed a total of 978 megawatt hours in 2021, a 38% decrease from 2020. During the company’s Q4 2021 earnings call, CEO Elon Musk noted the energy side of Tesla needs to be growing, but it took a back seat to its vehicle business.
“We did shortchange the energy business last year in that vehicle took over priority over the energy side on chips,” he said. “If we’re able to respond to demand, it might grow by 200 or 300%.”
Musk suggested that, much like every other manufacturer, they are experiencing supply chain issues. Most notably, the car and energy company is dealing with issues manufacturing chips that may hamper energy storage.
“It’s hard to predict 2022 because we still have lingering supply chain issues globally, but I think the chip side of things looks like it will alleviate the end of this year for 2023,” he said.
According to Electrek, the supply chain issues are affecting Tesla’s Solar Roof projects. Customers reported receiving messages from Tesla stating installation timelines will be delayed and do not have a “firm timeline” from its suppliers as to when the delays will end.
Tesla produces its Solar Roof tiles at its gigafactory in Buffalo, N.Y., but much like any other manufacturer, it’s dependent on material suppliers that have been affected by the global supply chain crisis.
Solar Competition and Credits
Along with overcoming supply chain issues, Tesla is now facing new competition in the solar roofing business from GAF Energy and the release of its Timberline Solar product. The solar system uses nailable solar shingles that are installed along with the rest of a roofing system to create an integrated solar roof.
"This is an exciting change that can help more homeowners to embrace solar with local roofing experts," says Christine Bowen, CVO at Austin Roofing and Construction in Texas, in a written statement.
Solar providers in general are keeping an eye on controversial legislation in California that would reform the state’s rooftop solar power incentive. The proposal would cause homeowners to receive a lower rate for the power their rooftop solar panels send to the grid and pay $8 per kilowatt a month to maintain the infrastructure.
Companies like Tesla have argued that the policy would result in sharp declines of solar installations, which would hamper the state’s goals of combatting climate change. The California Public Utilities Commission said the commissioner assigned to the policy needs more time to analyze the record and consider revisions to the proposed decision.