Tesla plans to sell its solar panels at a price that’s 38 percent lower than the national average in an attempt to halt the decline of its solar business. The New York Times notes that the head of Tesla’s solar department, Sanjay Shah, wants to sell panels for between $1.75 and $1.99 a watt, compared to the national average of $2.85.

Shah highlights two main ways Tesla will achieve these price reductions. The first is by standardizing more of its installations. Customers will now only be able to purchase panels in increments of 4kW or 12 panels. Secondly, they will be asked to perform parts of the home installation process such as photographing electric meters and circuit breaker boxes that would have normally required a visit from Tesla.

The changes are needed to revive a significant fall in solar panel installations, which dropped to their lowest levels in six years in the first quarter of this year. The Buffalo News notes that the company deployed 47 megawatts in the quarter, compared to 73 megawatts in the same period in 2018. The decline means Tesla dropped to third place in terms of solar installations in the US, behind Sunrun and Vivint Solar, according to the NYT.

Most of Tesla’s existing installations consist of traditional solar panels.
Image: Tesla

In the second half of this year, Shah says he expects to push sales of Tesla’s long-anticipated solar roof, a set of solar shingles that resemble ordinary roofing materials. The roof was announced back in 2016 and was installed on Elon Musk’s house in 2017. During Tesla’s last earnings call, Musk said that the company is still developing and testing the roof, but challenges with its durability have delayed its rollout.

Despite these challenges, Tesla’s solar business is still profitable. That’s more than can be said for the company as a whole after it lost $702 million last quarter off the back of lower-than-expected sales of its cars and the challenges of delivering them to Europe and China. Musk expects the company’s losses to continue into Q2, before returning to profitability in the second half of this year.


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