Things are shaking up at Tesla as the company strives to move forward both in auto manufacturing and solar installations. To help regain its spot as the nation’s largest home solar installer, the company announced it would slash the prices of average home solar installations by up to 25 percent or between $3,000 and $5,000.
Prior to being purchased by Tesla in 2016 SolarCity was the nation’s largest residential solar installer, installing as much as 253 megawatts of solar on homes and businesses in one quarter, the fourth quarter of 2015. But customer acquisition costs were high and after Tesla purchased the company it changed its marketing strategy, eliminating first, door-to-door sales and then its relationship with Home Depot to sell solar in 800 stores.
Those changes dropped its new installations to as low as 76 megawatts in the first quarter of 2018. Even in the first quarter of 2014 it saw more installations at 82 megawatts of new installs.
The company is now focussed on developing its internal sales channels. “As a result of the vertical integration of our solar products into Tesla’s retail stores and the increased efficiencies we’ve realized over the past year by closing more expensive sales channels like door-to-door sales, we are now able to reduce prices for our solar power systems. As a result of this pricing change, our average customer will see a savings of between $3,000 and $5,000,” the company said in a widely reported statement.
Analysts estimated that customer acquisition costs through Home Depot and other outlets could add significant expense to solar installations—up to $7,000, according to Reuters report Nichola Groom, who first reported the price drop Nov. 15. She added that Sanjay Shah, Tesla senior vice president of energy operations, said the company has been able to halve such sales and marketing costs streamlining its sales operations.
Shah anticipated the lowered prices will help make the company’s solar systems more competitive and that it wants to offer the lowest-cost solar systems in the US. That’s despite offering highly efficient modules its building at its Buffalo, NY, Gigafactory 2 with Panasonic.
The price cuts only cover its solar panel installations. They aren’t related to its Solar Roof system, which the company is still working to bring to market.
The company also opened up the doors at its Buffalo, NY, Gigafactory 2, kind of. Yesterday (Nov. 15) reporters were allowed to tour the facility but weren’t allowed to take photos or bring in news cameras. The company said the sprawling facility has 800 employees already and that it will have 1,460 jobs at the facility by April 2020.
Tesla and Panasonic are manufacturing solar at the plant. Panasonic is producing photovoltaic cells there and Tesla is developing its Solar Roof shingles there as well as producing solar panels for its solar panel installations.Tweet