Tesla Energy deployed a new record amount of energy storage during the last quarter, but its solar business is still declining.
With the release of Tesla’s Q2 2019 financial results, the company announced 81% growth in energy storage deployment for a new record of 415 MWh during the last three months:
“Powerwall and Powerpack deployment grew by 81% in the second quarter to a record 415 MWh. Powerwalls are now installed at more than 50,000 sites. Additional cell supply combined with our new module line designed by Tesla Grohmann enabled a step change in energy storage production.”
For the last few years, Tesla’s Powerwall deployment has been fairly limited, which the company attributed to battery cell supply constraints.
Over the last few months, Panasonic increased production capacity at Tesla’s Gigafactory 1 from 23 GWh to a ~28 GWh annual production rate.
This 5 GWh difference enabled Tesla to increase Model 3 production and still have enough to increase the production of its stationary energy storage products: Powerwalls and Powerpacks.
As for its solar business, Tesla noted another decline:
“Solar retrofit deployments declined sequentially to 29 MW. We are in the process of improving many aspects of this business to increase deployments.”
Tesla has indeed been revamping its solar business lately.
Tesla Solar Revamp
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.
Last month, Tesla slipped to third place for residential solar installations in the US.
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.
Yesterday, we reported on Tesla starting to deploy solar power systems in 24 hours after ordering online.