better known for making electric cars, is once again offering to rent solar panels to homeowners.
Rentals are available in six states: Arizona, California, Connecticut, Massachusetts, New Jersey and New Mexico. They start at $50 a month in each of those states except California, where they start at $65 a month. Tesla said customers can cancel the leases at anytime.
The smallest system can generate 15 to 19 kilowatt-hours of power on average daily in California and 10 to 14 kilowatt-hours in New Jersey, Tesla said. Solar panels can still be purchased from Tesla in all 50 states.
“The bet they’re making is that electricity prices will continue to rise and that consumers ultimately won’t want to cancel,” Roth Capital Partners analyst
After acquiring SolarCity in 2016, Tesla began selling and leasing solar panels in Tesla showrooms, with the leases extending 10 to 20 years. Later, Tesla began promoting sales as opposed to leases. But residential and commercial sales, as measured by megawatts deployed, fell by 38% in 2017 from the prior year, according to Tesla.
Once the top U.S. residential solar installer, Tesla ranked No. 3 in the first quarter of this year with a 6.3% share, according to Wood Mackenzie, a firm that tracks renewable-energy projects.
Inc. ranked first with 11%, followed by
with 7.6%, it said.
In 2017, the number of U.S. homeowners putting solar panels on their roofs declined for the first time since at least 2000, after averaging 49% annual growth between 2010 and 2016, Wood Mackenzie said. But last year sales started to rebound, increasing 7.5%, and this year they are expected to rise another 4.5%, Wood Mackenzie said.
Industry executives and analysts blamed the recent sales declines on a sharp retreat by national solar installers, including Tesla. They said companies heavily marketed deals to lease panels for little to no money down, which hurt their bottom lines and prompted some to scale back on growth or exit the rooftop-solar business entirely.
In its first-quarter shareholder letter, Tesla acknowledged problems with its solar business, saying traditional industry sales techniques are too cumbersome and limit residential market potential.
As with its vehicles, Tesla said, “The key to accelerating mass adoption is to standardize the product offering, simplify the customer buying experience, and focus on the markets with the strongest economics.”
Last month, Tesla told analysts on an earnings call it was optimistic for its future in solar, saying its “energy products business will grow.”
Roth analyst Craig Irwin said Tesla’s solar business isn’t likely to contribute materially to earnings in the near-term.
Tesla Chief Executive
asked his followers on Twitter to weigh in on its solar program. “Lmk what you think,” he tweeted, using an abbreviation for “let me know.”
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