Tesla Solar Roof: Production Boosts Planned Alongside Panel Price Cuts

Tesla plans to cut the prices on its solar panels to reach up to 16 percent below the national average, according to report published Tuesday. The company’s aggressive new effort to stay competitive in the clean energy market arrives as it also works to ramp up production of its solar roof tiles and energy-storing Powerwall battery.

Sanjay Shah, Tesla’s head of solar, told the New York Times that the firm plans to offer panels for somewhere around $1.75 to $1.99 per watt. The national average is around $2.85 per watt, which includes $1 for inspections and permitting.

The company recently declared a renewed focus on its solar energy efforts, as the dust settles from ramping up production of its entry-level Tesla Model 3 to 5,000 cars per week. CEO Elon Musk stated in March that 2019 would be the year of the Solar Roof and Powerwall, following a resource-starved year, as the firm “had to basically allocate all resources to Model 3 production.” These products leverage the battery storage advancements also used in its electric cars.

These savings will come from a number of cost-cutting measures, similar to how Tesla last month reduced prices on its electric cars by scaling back its retail presence. Customers will have to buy the solar panels online from now forward, and they’ll have to complete tasks previously left to employees, like taking photos of electrical equipment around the property. The panels will also now be solved in sets of 12 only, equivalent to four kilowatts. While the average solar home installation generates 7.6 kilowatts, Tesla’s early solar roof installations have reached around 10 kilowatts.

Tesla, an electric car company working to transition the world onto more sustainable energy forms, merged with solar panel provider SolarCity in a $2 billion deal in November 2016, after a showy debut in October on the former set of Desperate Housewives. Musk said at the time that the two firms “arguably we should have done it sooner,” as Tesla’s battery storage expertise pairs well with SolarCity panels that need somewhere to store energy when the sun isn’t shining.

In that flashy debut of the new Tesla Solar Roof set-up on the TV set, a Tesla Model 3 charged in the garage, a Tesla Powerwall battery provided power to the house, and a Tesla Solar Roof harnessed energy from the sun. It also enjoyed publicity from a flagship project in Puerto Rico aimed at helping to bring the hurricane-struck island back online.

Tesla experienced big solar profits at the end of 2018, along with competitors Vivint Solar and Sunrun. However, analysis from Wood Mackenzie found Tesla lost its lead to Sunrun in terms of residential installations in the third quarter of that year, installing just 156 megawatts versus Sunrun’s 163 megawatts. Tesla also only completed a limited number of Solar Roof installations.

Alongside boosts to production, Musk also teased earlier this month that a third version of the solar roof would launch soon. As it aims to ramp up production and command a lead, it seems the firm is also considering how the future of solar may look.

Update 5/2 12:30 p.m.: An earlier version of this story stated that Tesla’s prices were now 38 percent below the national average. This has now been corrected.