Tesla largely responsible for slide in U.S. home solar
sales
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[December 16, 2017]
By Nichola Groom
(Reuters) - After years of double-digit
growth, home solar installations in the United States are poised to fall
for the first time this year, according to a report released on Thursday
by GTM Research.
The reason? An analysis of installation data suggests that most of the
slowdown is traceable to a single company: Tesla Inc <TSLA.O>, which
acquired sister company SolarCity about a year ago.
For years, SolarCity, with early backing from Tesla CEO Elon Musk, was
the biggest player in residential solar and the driving force behind
that market's supercharged growth.
When Tesla bought SolarCity last year, Musk called the acquisition a
"no-brainer," saying the two companies shared "the same overarching goal
of sustainable energy."
But under Tesla's ownership, the company has largely stopped its
aggressive marketing campaigns and ambitious expansion.
![](http://archives.lincolndailynews.com/2017/Dec/16/images/ads/current/napa_sda_christmas_2015.png)
As a result, Tesla's rooftop solar installations have fallen sharply
each quarter this year compared to last. In the third quarter,
installations were off by 42 percent over the previous year.
Tesla declined to comment for this story, but has previously said that
while sales are down, margins are up. The company expects its
fourth-quarter solar installation numbers to be higher than those of the
third quarter.
Overall, the residential solar market is expected to fall 13 percent
this year, according to GTM's quarterly solar market report, released on
Thursday. That compares with a 19 percent rise last year and four
straight years before that of increases above 50 percent.
SolarCity was responsible for an outsized portion of that growth,
accounting for a quarter of the national market in 2016 and more than 30
percent the previous two years. By the third quarter of this year, its
share had dropped to 14 percent, according to GTM's U.S. PV Leaderboard
report.
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![](../images/121617pics/busine63.jpg)
Elon Musk, Chairman of SolarCity and CEO of Tesla Motors, speaks at
SolarCity's Inside Energy Summit in Manhattan, New York October 2,
2015. REUTERS/Rashid Umar Abbasi/File Photo
![](http://archives.lincolndailynews.com/2017/Dec/16/images/ads/current/modern_brake_lda_christmas_2015.png)
"If SolarCity accounted for a 30 percent share of the national market and you
cut those installation volumes effectively in half, that's really what we are
looking at in terms of the market downturn in 2017," said Austin Perea, who
tracks the U.S. residential solar market for GTM.
SolarCity's rapid growth was fueled in part by a no-money-down offering that
enabled residential customers to pay a monthly fee to go solar. The business
generated huge sales volumes but led to investor concern about debt.
In many ways SolarCity's rise helped lift the fortunes of smaller rivals.
"They spent a lot of money making people aware of what solar can do and all of
us little guys have been the beneficiaries of that," said Jim Petersen, chief
executive of Fremont, California-based PetersenDean, who said his company is
forecasting sales growth of 7 to 9 percent this fiscal year.
Tesla stopped selling installations door-to-door earlier this year, eliminating
a major way it reached new customers. It now sells systems in its high-end
retail stores, where cars and batteries are also sold.
![](http://archives.lincolndailynews.com/2017/Dec/16/images/ads/current/ldn_business_directory_small_2016.png)
SolarCity's fall has benefited some competitors. Sunrun Inc <RUN.O>, the largest
publicly held standalone residential installer, has gained market share this
year, and its installations are expected to rise 15 percent in 2017.
(Reporting by Nichola Groom; Editing by Sue Horton and Leslie Adler)
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