Science Energy Is Elon Musk's SolarCity Circling the Drain? By Lloyd Alter Design Editor University of Toronto Lloyd Alter is Design Editor for Treehugger and teaches Sustainable Design at Ryerson University in Toronto. our editorial process Facebook Facebook Twitter Twitter Lloyd Alter Updated May 12, 2020 Tesla Share Twitter Pinterest Email Energy Renewable Energy Fossil Fuels He says it is all part of the grand plan and we shouldn't worry. In his 2018 fourth-quarter earning announcement, Elon Musk noted: We deployed 73 MW of retrofit solar systems in Q4, a 21% decrease sequentially. We are still in the process of transitioning our sales channel from former partners to our Tesla stores and training our sales team to sell solar systems in addition to vehicles. So, sales were down because he dumped his relationship with Home Depot to sell out of his stores. And then in February, he closed most of his stores. As (SolarCity is based in Buffalo) notes, closing the stores is a big deal. Here's why: Rooftop solar energy systems are notoriously hard to sell – and those sales expenses are a big burden to companies such as Tesla. Ever since Tesla acquired the solar energy business from SolarCity in late 2016, it has slashed those selling costs. It stopped selling rooftop solar system door-to-door. It launched – and quickly scrapped – a program to sell rooftop solar through Home Depot stores. National Renewable Energy Laboratory So now, the only way to get a solar system from Tesla is online, which is a tough sell for solar. Tesla says it's all cool: “The majority of our residential solar and Powerwall orders are already placed outside our retail stores, including online or via referral, and we believe this shift to online sales, paired with a dedicated energy adviser from our support team, will result in the best, most seamless customer experience in the industry,” a Tesla spokesman told Reuters. Complicated Process The trouble is, putting solar panels on a roof is more complicated than ordering a car, which can just be driven into your garage. Putting solar panels on top of your garage requires careful design, approvals, installation, and more approvals. It is hard to do and it's labor-intensive. Home Depot was good at this kind of stuff. One former solar seller laid off in January told Reuters that 70 percent of leads on solar had come from Home Depot. Upper management at Tesla “didn’t appreciate the significance” of the deal with the big-box retailer, the source said. "If you want to go mass volume, you have to go after the customers,” the source said. “Solar isn’t sexy enough to have the customer come to you.” Is Musk Taking Solar Seriously? Writing on Motley Fool, solar analyst Travis Hoium doesn't think Musk is taking solar very seriously these days, and customers are noticing. How are workers or customers supposed to take Tesla Energy seriously when Tesla itself doesn't appear to take solar seriously? That's a question Elon Musk has to answer before I would consider spending tens of thousands of dollars to put Tesla's energy products in my home, and by the look of Tesla's solar decline, other customers have the same reservations. Musk says people shouldn't worry, that it was all part of the grand plan. At the recent unveiling of the new Model Y he spoke about it: Because of extreme challenges with the Model 3 production, we had to basically allocate all resources to Model 3 production, because otherwise we were going to die. Now that Model 3 production is going pretty well, we’re finally going to allocate engineering attention to the solar roof as well as the solar retrofit... and the Powerwall. When Tesla started taking orders for its solar shingle two years ago, I wrote that "this is truly a genius product, a solar panel that looks gorgeous and is also a great wind- and hail-proof glass-shingled roof. It is a game-changer and I hope he sells it by the acre." I really hope that it gets the attention it deserves.