The Bumpy Road to Tesla Solar: Lessons Learned and the Path Forward

Tesla's Solar Ambitions

When Tesla CEO Elon Musk first unveiled Tesla Solar in 2016, the project boasted some grand claims. The Tesla solar roofs were envisioned to be stronger, cheaper, and longer-lasting than any other options for generating solar power at home currently available on the market. Years on, and the grand vision of Tesla Solar has yet to materialize. Due to a number of setbacks, Tesla still hasn't had a major rollout of its solar generating technology, so far having failed to bring sustainable energy into the home as they have with cars. Given Tesla's reputation for the fast rollout of projects, this has left many wondering what exactly went wrong.

Tesla's Solar Background

Tesla's first foray into the world of solar came as a result of Musk's involvement with the solar-based company SolarCity. SolarCity was first founded in 2006 by Peter and Lyndon Rive, two cousins of Tesla CEO Elon Musk. The primary focus of SolarCity was the door-to-door installation of solar panels in residential homes. The business model made use of a lease agreement in which customers paid no upfront costs but agreed to purchase their power from the company for 20 years. This model proved popular and became the most widespread method of solar installation across the U.S. However, despite its popularity, SolarCity came under fire from consumer advocates and government regulators, and by 2016, the company was suffering under $1.5 billion in U.S. dollars in debt.

A Rocky Start

From the beginning, Elon Musk played a large role in the creation of SolarCity. His cousins, the Rive brothers, actually founded SolarCity based on a suggestion from Elon himself, and from the beginning, the Tesla CEO served as chairman of the company. With stakes in Tesla, SpaceX, and SolarCity, Elon Musk bore an interconnected responsibility toward the success of all three companies. So when it looked like SolarCity was heading for bankruptcy in 2016, the Tesla CEO redirected money from SpaceX to buy bonds in SolarCity, keeping the company afloat until Tesla could swoop in and buy it in August of 2016.

It was with the merger of SolarCity and Tesla that the first plans for Tesla Solar homes began to take shape. However, as Tesla acquired SolarCity, they were busy facing problems of their own. The Model 3 was facing an ongoing slew of production setbacks, and in order to get the car rolled out, the company needed to divert as much of its resources as possible to getting the Model 3 off the ground. This led to many SolarCity employees being diverted away from their work on solar projects towards car and battery manufacturing. But these were the ones lucky enough to keep their jobs, as Tesla came under fire for firing SolarCity employees in order to keep operations afloat and redirected installation teams to work on repairs, all of which slowed the rate of residential solar installation in the USA from 2017.

Production Problems

In preparation for their intended wide-scale rollout of the Tesla Solar Roofs, the company cut a deal with the state of New York to open a mega-factory in Buffalo, New York. The factory is technically owned by the state of New York, and construction was completed in 2016. From its inception, the facility was intended to become a sustainable energy powerhouse and research center in an effort by the state to revitalize rust belt industrial areas suffering from industry migration.

In 2014, SolarCity secured a deal to operate the facility and produce solar panels. The original agreement ensured that the operation of the facility would produce 3,000 high-tech jobs in Buffalo and 5,000 statewide, creating $5 billion of economic activity. These promises caused the state to award the facility an additional $750 million in incentives.

However, as Tesla took over the operation of the Buffalo facility in 2017, it was clear that the original promises made during the acquisition would not be fulfilled. In 2018, Tesla committed to creating roughly 1,400 high-tech jobs at the facility by 2020. Due to a number of setbacks, including the COVID-19 pandemic, production had to be scaled down numerous times, and in 2021, Tesla received yet another extension to their agreement. Should they fail to secure 1,400 jobs in the facility by the end of the year, they could face tens of millions of dollars in fines to the state of New York.

As the state of New York essentially built and equipped this factory for free in exchange for promises of job security and productivity, many parties have been disappointed by the lack of follow-through that the gigafactory in New York has produced. Not only have the proposed job targets not been met, but Tesla is reported to have outsourced their solar panel production to China instead of the domestic production that was promised to take place in Buffalo. All these issues regarding the solvency of the Buffalo plant have played a major role in slowing the large-scale rollout of Tesla Solar, and until the Buffalo plant can reach its targets, it's unlikely that the project will be able to materialize on a scale that will allow the solar roofs to be both accessible and affordable.

Unrealistic Promises

Straight away, when Elon Musk took to the stage to announce Tesla's master plan for producing solar-paneled roofs, doubts began to surface. The designs that Musk showcased were noteworthy for their strikingly different appearances from traditional solar panels. Rather than the traditionally large photovoltaic panels that most people are used to, Musk unveiled the design for a series of photovoltaic shingles. This would allow customers to have their entire roofs constructed out of solar panels and still look exactly like conventional roof tiling. In practice, this would allow for the ability to harvest far greater amounts of energy than traditional residential solar panels.

However, the issue was that the photovoltaic tiles showcased by Musk were not yet functional. The tiles used for the unveiling were just design samples, and Tesla had yet to even develop a working prototype. With the technology itself still in early development, a lot of the hype surrounding the solar roof quickly fell flat. Industry experts, in particular, were highly skeptical of the technological promises being made by Tesla. The technology necessary for the kind of photovoltaic tiles Tesla promised in 2016 is notoriously tricky to get right, and previous attempts to do so were abandoned due to the lack of economic viability.

Tesla CEO Elon Musk has admitted that many of the promises made as part of the solar roof initiative were unrealistic, as the company underestimated the difficulty of the technology and the amount of personalization that each installation would require. With both Tesla and SpaceX projects ramping up in intensity over the previous few years, Musk has increasingly been forced to turn to third-party contractors to take care of all current Tesla Solar installations.

Customer Complaints

While Tesla Solar may not have entered widespread rollout as planned, they do still service a large number of people. The solar-tiled roof only makes up a tiny fraction of Tesla Solar's installations, numbering in the hundreds. The vast majority of their solar customers still possess traditional solar panels, and the company has installed over 200,000 of its Powerwall solar power generators around the world.

However, things have proven to be anything but smooth sailing for many of these customers. Tesla has come under fire a number of times for supposed price hikes in their services. Many customers reported being given a quote only for the quote to increase come the time of installation. Several lawsuits were launched toward the company for these supposed price hikes, which prompted Tesla to announce that they would reverse the price increases in question.

Beyond that, the quality of customer service offered to Tesla Solar clients has been a setback for many customers. Customers regularly report experiencing bugs and dead ends on the Tesla app, which is designed for monitoring the Tesla Solar system's energy production and usage, as well as for scheduling maintenance and repairs. The Tesla Solar hotlines have become notorious for seemingly infinite wait times, and many customers report that the overall process of installing Tesla Solar was far more lengthy and expensive than they were promised at the outset.

These hiccups in customer service have led to bad press, which has left many skeptical toward Tesla Solar and slowed its widespread growth even further.

The Path Forward

With all these production setbacks and customer complaints, many have been left wondering what the future holds in store for Tesla's grand plan to bring sustainable energy production to as many residential homes as possible. Well, in response, Elon Musk has begun devoting an increase in manpower to the development of solar glass, a key new technology that could help in the widespread use of solar energy production.

What's more, Tesla is focusing more resources into improving the efficiency of its roof units, as well as constantly improving the efficiency of its Powerwall units. These Powerwall units are essentially giant battery storage units, and as they improve in efficiency, they are likely to incentivize more and more customers and businesses to go off the main power grid and adopt solar power.

Although Tesla Solar has faced many setbacks, CEO Elon Musk is still determined to explore all the possibilities of solar energy and continues to pursue his goal of bringing sustainable energy to all. And despite the setbacks with food production, long-distance travel, and even space exploration, all making use of solar power technology, Tesla Solar may very well have a bright future.