Tesla started making its solar roofing tiles in Buffalo last month, meeting its goal to start shifting production by the end of 2017 to its South Park Avenue gigafactory of what it hopes will become a signature product for its renewable energy business.
The company on Tuesday confirmed that production of solar roofing tiles began in December, although it did not provide any details on how many of the roof tiles it has made at the RiverBend factory.
But the start of production of the solar roof in Buffalo is an important milestone, not only for the company, but also the region's economy, which is counting on the factory to bring more than 2,900 new jobs to the city.
Tesla said the workforce at the RiverBend factory now is approaching 500 people, although the company declined to say how many people are working for the electric vehicle maker at the facility and how many are working for other companies, such as Panasonic or other suppliers and service providers.
Tesla's partner, Panasonic, began making solar panels at the factory last summer, using solar cells that it imports from its factories in the Far East. Panasonic, which plans to start making solar cells in Buffalo by February, has said its workforce at the RiverBend factory would top 300 by the end of last year, with plans to add another 60 people by early spring.
Tesla had been largely quiet about its own involvement in the RiverBend project. Most of the company's focus in Buffalo revolves around its innovative solar roof, which looks like a conventional roof but has solar cells inside.
The company on Tuesday said hiring is ongoing and is on track to meet the job creation promises it made to the state in return for New York spending $750 million through the Buffalo Billion economic development plan to build the 1.2 million-square-foot factory and purchase a significant portion of the equipment that will be installed there. Tesla has promised to create 1,460 jobs in Buffalo, with suppliers and service providers bringing another 1,440 jobs to the region.
"The ramp-up for production is well underway," said Howard Zemsky, the Buffalo developer who heads Empire State Development. "Solar module production began last year and Tesla is now producing tiles for its solar roof, with hundreds of people already hired.”
Tesla said it is continuing to install and configure equipment within the Buffalo factory and that it expects the facility annually to produce enough solar panels and roofing tiles to generate more than 1 gigawatt of electricity, with the potential to double that output to as much as 2 gigawatts.
Tesla first unveiled its solar roof in late October 2016 and last May began accepting $1,000 deposits from interested homeowners. It previously said it was testing them on employee homes, but only now is the company saying that it is starting to install the solar roof on homes that are not owned by Tesla employees. The company also said it has completed tests to measure the reliability and weatherization capabilities of the new roofing product.
Initial installations had been done on a pilot basis on the roofs of a handful Tesla employees, including CEO Elon Musk, to make it easier to detect any issues that might arise with the new product. Those roofing tiles were made at Tesla's pilot production line in Fremont, Calif.
The Buffalo factory, which is owned by the state and leased to Tesla, is the centerpiece of the state’s Buffalo Billion economic development initiative. Tesla executives have said the factory’s capacity can be expanded to as much as 2 gigawatts. The factory is targeted to reach full production by the end of 2019.
Tesla has high hopes for the solar roof, even as it is reshaping the solar energy business it acquired in November 2016 through its purchase of loss-plagued SolarCity. A month after the purchase, in December 2016, Tesla made a deal to bring in Panasonic to make solar cells and panels at the Buffalo factory in an arrangement similar to one in place at Tesla’s massive battery gigafactory in Nevada, where Panasonic makes the cells that go into batteries for Tesla’s electric cars.
As part of the agreement, Panasonic agreed to invest more than $250 million in the Buffalo factory, easing the capital demands that Tesla was facing as it ramps up production on its more affordable Model 3 electric vehicle, which has taken longer than Tesla executives anticipated.
Since taking over, Tesla has revamped SolarCity's business, moving away from the no-money-down leases that fueled the rooftop solar installer's rapid growth but also piled up more than $3 billion in debt. Instead, Tesla is focusing more on installations where the owner finances the purchase and has dropped its door-to-door sales force in favor of sales that generate more cash.
Those changes, however, have caused Tesla's solar business to shrink. During 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.