Reading the Tesla tea leaves
The future of Tesla’s solar roof tiles is murky and uncertain
March 13, 2018 by John Bleasby
Maybe they will change the way we live in our homes. Maybe they’ll find their way to the scrap heap of history. Any way you look at it though, Elon Musk and his Tesla solar roof tiles have enjoyed free publicity unlike any other environmental product.
You’ve seen the press releases. You’ve been told how Telsa tiles will revolutionize the world of residential solar by simply looking like any other roof material when viewed from the street — apparently curb appeal is all that it will take for homes around the world to go solar. Yet, the response has been amazing. Thousands of homeowners have slapped down deposits for Tesla solar roof tiles, even though most will not see delivery for a year or more. It’s going to get even more hectic as Home Depot and Lowes will soon start offering Tesla solar tiles and PowerWall storage battery systems for sale in kiosks at hundreds of outlets across the USA. (There are no such plans for Canada.)
The salad days for Canadian residential solar are past
The financial viability of small scale residential solar in Canada has changed dramatically. As covered both in print and on-line by Canadian Contractor, the rooftop PV array solar industry has been slip-streaming behind a truckload of government subsidies for a decade, either installation grants or over-the-top power purchase agreements. Those days are over. Today, if a homeowner wants a PV array system installed on the roof, it’s out of concern for the environment and their personal carbon footprint, not for financial payback.
A niche within a niche
PV arrays on a home’s rooftop are expensive. As government subsidies peter out, it’s becoming a niche market in Canada. Tesla takes this even further. At roughly triple the installed cost of a standard array, Tesla is a niche within a niche. Coupled with a solar photon conversion efficiency of perhaps only 70 per cent of standard arrays, one is left scratching one’s head.
The solar slump is in the USA too
It’s not just Canada. According to the Buffalo News, “The nationwide [USA] residential solar market is expected to shrink by 13 percent this year – the first-ever decline in the rooftop solar market… Most of the decline is because of Tesla. Through the first three quarters of this year alone, Tesla’s total installations – which include an undisclosed number of commercial projects – were down by 32 percent, or 208 megawatts. That doesn’t include what is likely to be a substantial decline in its fourth quarter deployments. Its share of the residential solar market has shrunk from 35 percent in 2015 to 14 percent during the third quarter, according to Reuters.”
Can Tesla even survive in the future?
However, there’s more the story than that. What you are not maybe hearing is the serious issue of financial viability of both the product itself and the company behind it. One big question is: Can Tesla survive as a company survive? Don’t take our word for it. Here are observations from a sampling of news and industry media following the Tesla story.
“One commentator has gone so far as to call Tesla “structurally bankrupt.” By this, he means that the firm’s operations are not self-sustaining and that it is unable to function as a going concern without access to capital markets” (see chart)
“Oh, how the mighty have fallen… According to the recently released fourth-quarter results, Tesla only installed 87 MW of solar, an astonishing decline … and another sign that solar may be slowly dying at Tesla…. Overshadowing the decline in solar is Tesla’s production problems with the Model 3 [electric car]. The product has been delayed by at least two quarters, and if delays continue it won’t matter what happens in the solar business because Tesla will burn through billions in cash.”
From the New York Times
“This summer, Tesla’s stock-market valuation at times rose above those of Ford and General Motors, and its worth exceeded $60 billion. It did not seem to matter to investors that the company had never made an annual profit, had missed its production targets repeatedly and had become enmeshed in controversy over its self-driving ‘autopilot’ technologies…”
“Since its inception, Tesla has burned cash in a rush to bring its creations to market. The company now faces a cash crunch that will force TSLA to raise capital sometime in 2018. Analysts rate Tesla’s bonds as having junk status, which makes issuing more of them a less appealing prospect.”
Competitive products are on the way
From architectureand design.com
“A solar roof tile offering from an emerging Australian company is setting high performance goals for a similar product recently launched by international giant Tesla. Tractile solar roof tiles from Trac Group Holdings … compare very favourably on several aspects including product features, versatility, performance and pricing. According to Trac Group managing director Jason Perkins, when the two products are compared, the Tesla products are simply left in the shade… on several aspects from the price of the roof, the weight of the roof, roof area requirement and the amount of electricity…”
“US-based PV installer RGS Energy has struck an exclusive deal with Dow Chemical to exclusively sell its third generation (3.0) solar shingles under the ‘POWERHOUSE’ brand said to use conventional crystalline silicon solar cells rather than the original CIGS (Copper, Indium, Gallium, Selenide) thin-film substrates.”
“Hanergy has launched its version of the solar-embedded roof tile. Hanergy Thin Film Power Group Ltd is a Chinese multinational clean energy company. The company claims to be the world’s leading thin-film solar power company committed to changing the world using thin-film solar.”
This story risks evolving into a discouraging narrative. Here at Canadian Contractor we’ll likely leave it alone for a while and will simply wait until the final death notices arrive.
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