The pall hanging over Tesla Inc.'s solar energy business brightened, with the company reporting Wednesday that its installations bounced back solidly during the third quarter from the five-year low it hit this spring.
Tesla said Wednesday its solar energy deployments rebounded by 48% during the third quarter after the company launched new programs allowing consumers to rent their solar arrays for as little as $50 a month and launched a new online ordering system for commercial customers.
And the company plans to take the wraps off the third version of its long-awaited, but long-delayed, solar roof during an announcement on Thursday afternoon, CEO Elon Musk said during a conference call.
"I think this is a great product," Musk said, adding that production of the solar roof is "scaling up" at the company's solar factory in Buffalo, without providing specifics. Musk said in June that the company was working on "Version 3" of the solar roof, but the company has never provided any details about it.
The revamped solar business, accompanied by a flurry of tweets by Musk promoting the solar energy business in recent weeks, helped Tesla deploy 43 megawatts of solar energy generating capacity during the quarter.
While that was a big improvement from the 29 megawatts it deployed during the second quarter – its lowest installations for any quarter since at least 2013, dating back to its days as the stand-alone SolarCity business – the pace of Tesla's solar energy business remains subdued.
Despite the big increase, its solar energy deployments during the third quarter still were its second-lowest in more than five years. A year ago, Tesla's solar business deployed 93 megawatts of generating capacity, so its installations are down 54% from a year ago.
The announcement on Thursday about the solar roof could be a sign that Tesla is nearing a point where it can move toward high-volume production of its long-awaited product. The solar roof is expected to be the main product at the factory on South Park Avenue that was built with $750 million in taxpayer money under the state’s Buffalo Billion economic development program.
The improvement in the solar energy business came as Tesla surprised analysts by reporting a quarterly profit during the third quarter and saying it was “highly confident” that its electric vehicle business would exceed 360,000 deliveries this year. Tesla also said key projects – a Chinese factory and its Model Y SUV – are ahead of schedule.
Tesla is counting on its solar roof product to jump-start its solar energy business – but the roofing tiles have been nearly three full years in development and that slow pace has affected the pace of hiring in Buffalo. In the interim, Tesla has broadened the products it makes at the Buffalo factory beyond solar energy, to include electrical components for its batteries and its electric vehicle charging stations.
Those products are a way of bringing more work and a more diverse product line to the Buffalo factory with the company six months away from a requirement that it almost double the size of its current workforce or face a $41.2 million penalty from the state. The Buffalo plant now employs around 800 people between Tesla and its partner, Panasonic. It has promised to have 1,460 workers in Buffalo by mid-April.