Tesla Responsible for Much of Slide in Home Solar Sales

Following years of growth in the double digits, installations of home solar units in the U.S. will fall this year for the first time, according to a new report released this week by GTM Research.

An analysis of data related to installations suggests that the majority of this year’s slowdown can be traced back to one company – Tesla Inc., which acquired SolarCity approximately one year ago.

For several years, SolarCity, with backing from Elon Musk the CEO at Tesla was the largest player for residential solar while being the driving force behind the market’s surge in growth.

When SolarCity was acquired by Tesla in 2016, Musk said the acquisition was an easy decision, saying Tesla and SolarCity shared the same sustainable energy goals.

However, under the ownership of Tesla, SolarCity has stopped for the most part its aggressive marketing and its ambitious expansion.

Because of that, SolarCity’s solar installations for rooftops have dropped sharply every quarter in 2017 compared to during 2016. During the third quarter, its installations were off 42% compared to the year before.

Tesla has said that while sales have dropped its margins are up. The company is expecting its solar installation for the fourth quarter to be higher than during the third quarter.

The residential market overall is expected to drop 13% in 2017 showed a quarterly report by the solar industry released this week. That is in comparison to a rise of 19% in 2016 and four consecutive years prior to that of increases higher than 50%.

SolarCity was behind much of the enormous growth in the industry, representing more than 25% of the 2016 national market and over 30% the two prior years. By this year’s third quarter, its share fell to 14%

The rapid growth of SolarCity was fuel partially by an offering of no-money down that helped residential customers by allowing them to pay a fee each month to be solar. The business was able to generate very high sales volumes but led to concern by investors over debt.

Earlier in 2017, Tesla also stopped selling door to door solar installations and now sells systems in retail locations that are high end where cars as well as batteries are sold.

The fall by SolarCity benefited competitors, Sunrun Inc., the largest standalone residential installer that is publicly held, increase its market share in 2017, and it is expected that its installations would rise by 15% during 2017.

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