Why Tesla Solar Hasn’t Worked Out The Way Elon Musk Promised



It’s been five years since Tesla acquired SolarCity for about $2.6 billion. The deal was immediately controversial with some shareholders suing Elon Musk. But fans looked forward to charging their Tesla electric vehicles on sunshine. CNBC interviewed industry experts and recent Tesla solar customers to see how the company is delivering on its promises today.

Correction (October 6, 2021): At 3:30 we incorrectly state that Elon Musk was a majority shareholder of SolarCity and Tesla. The correct statement is that he is a large shareholder, not a majority shareholder.

It’s been five years since Tesla acquired SolarCity for around $2.6 billion.

To convince shareholders to approve the deal, Elon Musk hosted a splashy event in Hollywood, where he held up a shiny roof shingle, which he said was a miniaturized solar panel.

SolarCity was founded in 2006 by Musk’s cousins, Peter and Lyndon Rive. It was backed by Musk who served as chairman of the board at both Tesla and SolarCity. Musk’s aerospace company, SpaceX, had also purchased tens of millions of dollars worth of solar bonds from SolarCity.

“The goal is to make solar roofs that look better than a normal roof, generate electricity, last longer, have better insulation, and actually have an installed cost that is less than a normal roof plus the cost of electricity. Why would you buy anything else?” Musk said at the event in October 2016.

The roof tiles were going to be the next big thing in residential solar, according to Musk, and once Tesla and SolarCity combined, the product would juice the company’s growth while delivering clean energy to homeowners.

After the deal went through, however, new installations by Tesla-SolarCity plummeted.

In the fourth quarter of 2017, Tesla reported a 43% drop in solar deployments compared with when it purchased SolarCity. The company ended up losing its market-leading position in 2018 and now hovers around 2% of the residential solar market, according to Wood Mackenzie. In the first and second quarters of 2021, Tesla installed 92 and 85 megawatts of solar, respectively. That’s less than half of what SolarCity was installing per quarter before the acquisition.

Tesla moved some solar employees to work on building the company’s electric cars and batteries, fired other solar employees, and moved others who had been doing new installations to work on repairs and remediation.

Some of the solar rooftops the company installed caught fire. One employee who raised fire safety concerns internally and filed whistleblower complaints to federal government offices sued Tesla saying it wrongfully terminated him as an act of retaliation.

Shareholders also sued, saying the acquisition amounted to a bailout for Musk and his family’s other businesses.

While the judge won’t deliver his verdict in the derivative shareholder lawsuit until early next year, Musk testified the SolarCity deal was essential to achieve Tesla’s vision. He denied SolarCity had been in dire financial straits before Tesla acquired the business.

Today, there’s growing demand and fresh government support for residential and commercial solar throughout the United States.

But Tesla still isn’t mass producing and installing large numbers of the Solar Roof tiles. Most of the growth in its Energy division has come from its energy storage systems — from backup batteries for homes to big batteries for utility-scale projects. Most of its residential solar revenue comes from installations of traditional panels.

CNBC interviewed industry experts and recent Tesla solar customers, to find out how the company is delivering on its solar promises. Their experiences were mixed, with customers in Washington, New York and California bemoaning poor customer service and unexpected issues with the installation of their solar panels, and others praising Tesla for making cars and systems that enable them to run on sunshine.

Tesla did not respond to multiple requests for comment on this story.

» Subscribe to CNBC:
» Subscribe to CNBC TV:
» Subscribe to CNBC Classic:

About CNBC: From ‘Wall Street’ to ‘Main Street’ to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.

Connect with CNBC News Online
Get the latest news:
Follow CNBC on LinkedIn:
Follow CNBC News on Facebook:
Follow CNBC News on Twitter:
Follow CNBC News on Instagram:

#CNBC

Why Tesla Solar Hasn’t Worked Out The Way Elon Musk Promised

38 comments

  1. Elon musk says why would you want anything else oh I don’t know maybe because us peasants can’t afford his solar panel roofs

  2. Are these issues with solar panels, installing and operating them, and customer service mainly exclusive to Tesla? Do many other companies have similar issues?

  3. Musk is a snake oil salesman that has been swindling government subsidies to prop up his ponzi scheme of companies under his belt.

  4. CNBS with a typical fear, uncertainty & doubt post, you guys hate that Tesla does not contribute to your ad revenue, I dont trust anything you publish

  5. The biggest Elephant In The Room is the fact that lithium batteries have too great an energy density for their own good, and are actually fire bombs that are impossible to extinquish if they start burning. Under no circumstances they should be charged even close to buildings. Insurance companies are starting to wake up because of the risks involved, and already couple of cities in Germany are restricting storage and charging of electric cars that have lithium batteries. If a solar battery system starts burning, the whole house will be lost. That is why the cost of house insurances will go high when the companies find out the reality.
    All renewable energy is net harmful for the human kind. Even if the CO2 would warm the climate more than now known 0,5 degrees C per doubling of the concentration (over 130 studies already), renewables are not "green". I know because I work for the renewables company as a Technical Advisor, and have international patents from the field. The whole "Climate Change" hysteria as it is portrayed in the media is the greatest hoax of the human history. Practically nothing IPCC tells us is true after the scandal of 1995.
    So, as it takes over 14 years of Tesla car use before it is as environmentally good as a car with a normal internal combustion car from the showroom, the history written in the future sees us as the greatest suckers of the whole human history. We had means to check things but we blindly believed Snake Oil Salesmen and corrupted politicians. With all the money wasted to the renewable energy, we could have fed the poor and cured the sick. That is why the "Green Movement" is a crime against the humanity.

  6. Tesla and less costs in the same sentence!! The irony is strong on this one. It is one of the greediest companies on the planet. Once Germans, Chinese and Japanese perfect their electric vehicles, costs alone will have Tesla at a disadvantage.

  7. I love how the Tesla roof customer considers a 30k difference “a wash” like it’s a rounding error. Delusional with too much money to burn.

  8. LOL what of his promises has worked out so far? no robotaxis, aint no way we gona fly "earth to earth", hyperloop was so bad that he gave up in it and " let others handle it", the Tesla bot? the vegas "loop"??

  9. having shouted for years that "the emperor has no clothes", its nice to see others waking up to the fact.

  10. It's like everything else Musk. He generates interest by describing a wild scheme. Then he makes unsupported performance and cost claims. He launches a test product or prototype that is a shadow of what is promised. He then swears as good as it sounds, it will be even better in the near future. He fails to deliver what he describes.

  11. You're source is some guy from Twitter that has to be anonymous to avoid harassment? I'm so tired of defending yall come on DO BETTER

  12. why it has not worked is because of musk himself. he is a vapor ware sales man who sales what he aint got. his greed is also destroying his companies

  13. My nephew had Tesla install solar. Followed by leaks from install. He stopped paying for the installation. NYC area.

  14. Solar, wind and a renewable fuel like hydrogen or “something” else is the only way any of it. Becomes economical, reliant on just one or two won’t cut it..

  15. Solar roofs are one of the worst ways of generating solar electricity. Conventional panels are cheaper and more importantly they are easier and cheaper to maintain. They have another rarely discussed advantage. By sitting above the roof they reduce roof heating on hot summer days. Because of the bad idea of covering entire rooves with solar tiles the electrical production per area covered is lower than per panel production from panels that are simply on surfaces at an optimal angle for electricity production.

    In addition Tesla itself is a problem. Considering the bad reputation Tesla cars have for poor fit and finish compared to other electric cars. Tesla would be the last company I would buy a solar panel installation.

  16. I live in Australia and have a 5kW solar system installed with a 10kWh Sonnen battery. Cost was just under AU$20k (about US$14.4k). Installed in one day, a month after ordering, and now I pay $49 a month for electricity (I'm in a VPP plan with Sonnen Flat) instead of $250 a month which is what I paid in 2018, the last year before I had solar. So it will take about 8.5 years to pay itself off and each year, so far, we've been very close to carbon neutral.

  17. I got my solar panels from Solar City in a program that put them on my roof for free. I just pay for the electricity generated. It was a good deal for me, not sure about Solar City.

  18. My problem is CNBC and there reputation for misleading info.Its hard to look at whats going on tesla and why its not at solar city,there must be some deeper issues that Elon has not resolved. I believe it will turn out positive in the near future ,the cars and space ships are taking all his time.hell find some smart engineering students eventually.

  19. They need to make each tile more durable and robust so they'll last to warranty.Then take the tiles and form a system that is foolproof.

  20. without bills, can in 30 years 300 000 usd credit to take up and this in venture to turn 5 years turn back… how gone up gas strom fuel prize since 30 years wath shall in next 300 years?

  21. Because he is a globalist and holds back on important tech. Him Gates Soros have failed and now their tech for the new world order has been exposed. They're finisished. Solar is just another diversion for for their plans for nuclear. Elon only plans to have solar, hydro and wind controlled at the local level.

  22. They will never fail because people are so indoctrinated in the Tesla "vision". Even those idiots who paid huge amounts of money for under delivering solutions still market them to others?!
    You have to respect Musk, he makes wild claims that no one calls him out on, so why not keep doing it?

Leave a comment

Your email address will not be published.