Report: Tesla to slash photo voltaic panel costs by 38% to stymie market share loss

Enlarge / Close-up of brand for Tesla Solar, a house solar energy technology resolution supplied by Tesla Motors, San Ramon, California, March 28, 2018. (Photo by Smith Collection/Gado/Getty Images)

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In Tesla’s first-quarter monetary assertion final week, the corporate mentioned that it could revitalize sluggish photo voltaic panel gross sales by streamlining the acquisition course of. “Our residential customers can now purchase solar and energy storage directly from our website, in standardized increments of capacity,” the corporate wrote.

Now, the New York Times is reporting that Tesla intends to slash photo voltaic panel costs by 38 % at this time, with, Tesla Senior Vice President of Energy Operations Sanjay Shah telling the paper that “Tesla customers could expect to pay $1.75 to $1.99 per watt, depending on where they live.” The Solar Energy Industries Association says the typical price of residential photo voltaic panels is presently $2.85 per watt.

Tesla’s plan to undercut its opponents is ostensibly doable as a result of the corporate is eliminating many so-called “soft costs” of photo voltaic panel set up. Instead of sending contractors out to a home to design and optimize a photo voltaic panel set up, prospects will now order photo voltaic panels on-line, in preset increments of energy. Each increment will be capable to produce four kilowatts (kW) of energy with 12 panels.

The Times stories that “To further reduce costs and complexity, customers will be asked to do many of the tasks Tesla employees used to do. Homeowners will photograph electric meters, circuit breaker boxes and other equipment and send the images to the company, reducing the need for site visits.”

Ars Technica has contacted Tesla for affirmation of this report, and we’ll replace if we obtain a response.

In 2018, the National Renewable Energy Laboratory (NREL) launched a paper saying that the largest barrier to decreasing residential photo voltaic panel costs was bringing down the smooth prices that Tesla seems to be focusing on. Soft prices are accrued as provide chain prices, labor prices, and gross sales and advertising and marketing prices—principally something that does not pertain to the bodily development of the photo voltaic panel itself.

Since Tesla acquired SolarMetropolis years in the past, it has been aggressive about chopping gross sales and advertising and marketing prices. Tesla discontinued SolarMetropolis’s door-to-door advertising and marketing, it closed various SolarMetropolis set up places, and it discontinued a partnership with Home Depot. But these prices additionally had a return: they introduced prospects into the fold. So whereas Tesla lower photo voltaic prices, quarter after quarter it misplaced market share to SunRun and different main US photo voltaic corporations.

Meanwhile, Tesla has been making an attempt to get an enormous photo voltaic manufacturing facility in Buffalo, New York, as much as full pace. The manufacturing facility is meant to churn out not simply photo voltaic panels but in addition the promised “solar roof” tiles that Tesla CEO Elon Musk has hyped for years. But final summer time Reuters reported that Tesla and its companion Panasonic had been experiencing meeting line points, and Tesla says it will not ramp up photo voltaic roof set up till later this 12 months.

In Buffalo, Tesla has a hiring quota that it should attain this 12 months to fulfill native authorities agreements. Tesla says it expects to satisfy the quota.

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