SAN FRANCISCO — When Tesla CEO Elon Musk pitched a solar-powered future a few years back, his vision for independence from fossil fuels dazzled.
Houses equipped with Tesla Solar Roof would feed energy to Powerwall, a sleek storage unit designed to act as an electricity fill-up station for both the house and a Tesla electric car.
But that sunny promise has come with a rain check. Slow production rates have meant too few Powerwalls are available for customers interested in the three-year-old product. And Tesla installed its first Solar Roofs for customers earlier this year, some two years after unveiling these futuristic solar-paneled glass shingles.
Meanwhile, the former SolarCity, bought by Tesla for $2 billion in 2016, has lost market share over the years to rival installers who are benefitting from the excitement generated by Musk’s off-the-grid overtures.
It’s a situation familiar to many fans of Tesla and its brazen CEO, whose vision for upturning the transportation and energy industries can’t seem to keep up with the factories and systems tasked with making his future a reality.
With solar, a combination of factors — including Musk’s focus on ramping up mission-critical Model 3 car production, demands for the batteries that go into Powerwall from its electric cars and industrial energy storage products, and a repositioning of his SolarCity gambit — means homeowners now willing to purchase rival products need to add a dollop of patience to the purchase price.
March into a Tesla store and show interest in a $6,000 Powerwall, and you’ll be told the wait is six to nine months. Ask about upmarket Solar Roof and you’ll come away with a price estimate and a possible installation date of 2019 or beyond.
And walk into any one of Home Depot’s locations within driving distance of its Palo Alto, California, headquarters, and you might not get any answers. Tesla recently announced it would pull out of its new partnership with the big box retailer at the end of the year, and a recent 9% Tesla staff cut means it’s tough to find salespeople there now.
But Tesla counters that all is going to plan.
The company is going to double down on selling solar through its 110 U.S. Tesla stores, which it has reconfigured in past months to ensure that Powerwall is on prominent display and in-house solar experts, some of whom worked Home Depot aisles for Tesla, are at the ready.
“No one should see us as stepping back from solar, in fact, it’s the opposite,” Tesla chief technology officer JB Straubel tells USA TODAY. “It’s like with Model 3. People have come flooding in and are waiting on the product. So now we’re aggressively ramping our capacity.”
At the moment, Tesla says can’t keep up with deposits put down on Powerwall or the interest shown in Solar Roof, which are produced as its Nevada Gigafactory and a Buffalo, N.Y., plant, respecitvely.
Straubel wouldn’t give details on how many Powerwall sales or deposits Tesla has booked and by how much it plans on expanding factory output to meet that demand. He says production will pick up later this year for Powerwall, reducing wait times. On Solar Roof, production is expected to accelerate next year, he says.
While Tesla can outfit a home with traditional PV, or photovoltaic, panels made by SolarCity within six weeks, its once dominant market position has slipped against rivals Sunrun and Vivint Solar. Tesla had a 16% share of the market for installations in 2017 down from 33% in 2015, according to GTM Research.
Barry Cinnamon has been installing solar systems in homes around San Jose for years. His Cinnamon Energy Systems would install Tesla’s new wares. But that’s not an option right now, so he steers customers to other products that are available such as storage units from LG Chem and Panasonic.
Says Cinnamon: “Tesla has done a terrific job of promoting the benefits of battery and solar tech, but it seems to be conflicting with their efforts to be a profitable automaker.”
Residential solar a ‘tough business’
The pressure on Tesla to turn Model 3 into a market leading electronic vehicle and financial success story has some analysts wondering if solar might stay on the back burner.
With the current delay on Powerwall and Solar Roof, Tesla may have lost “first mover advantage” after creating interest in such categories, says Dylan Miller, solar research analyst with Ibis World. “People will gravitate to whoever has product if the savings are there to be had now.”
Allison Mond, solar analyst with GTM Research, says she won’t be surprised if “Tesla’s residential solar business shrinks in the coming quarters. (That’s) a really tough business to be in, especially if that is not your sole focus.”
But other analysts disagree, arguing that if Tesla is ready to pounce with good products once the market matures, the current delivery lag might prove insignificant.
“The market size isn’t an issue for Tesla, they just need to manufacture product to a level of quality that people demand,” says Mark Osborne, founding editor of solar news website PV Tech. “If they can do that, the opportunity for Tesla long term is fine.”
Tesla CTO Straubel says the company not only will be offering industry leading products, but by moving its sales channel to its stores it can better control a process that traditionally relies on door-to-door sales and cold calls.
“We’re focused intently on the customer experience, not on having a higher market share,” says Straubel, brushing off the fact that in March Tesla/SolarCity lost the top spot in residential solar installs to Sunrun. “We’re looking at the bigger picture.”
Solar poised to double by 2023
Once a fringe home accoutrement favored by eco-conscious consumers, solar does appear poised to mushroom as costs come down and homeowners welcome reduced utility bills.
A recent Morning Consult poll revealed that 58% of Americans would be open to adding solar, while 63% said they would favor state regulations that echo a new California rule requiring that by 2020 most new homes feature solar.
By the end of this year, the number of U.S. single-family homes with solar is expected to hit 2 million, which is a doubling from 2016 and half the 4 million projected by 2023, according to the Solar Energy Industries Association.
Those 2 million homes represent just 2% of all U.S. homes. “Across the country, solar really still is in its infancy,” says SEIA spokesman Dan Whitten.
While nearly half of those houses are in California, with Arizona and New York following, growth also is being experienced in less obvious places.
“We opened up in Illinois and they’re clamoring for the service for reasons such as wanting clean energy and energy independence,” says Anne Hoskins, chief policy officer for Sunrun. “We’re just at the beginning. A growing number of people want control over their electric bill.”
That control comes largely in the form of energy storage devices such as Powerwall, which recently added a feature that allows users to program the unit to buy power from the grid at cheaper, off-peak times.
Powerwall has rivals in the storage arena, including Sonnen and Swell. Like Powerwall, these cost many thousands of dollars, but they are available without delay.
Ultimately, battery storage is considered critical to boosting solar adoption because with fewer states allowing consumers to sell back power to the grid — so-called net metering — the next best solution is to hang onto your solar juice until you need it.
“Batteries will be an important part of the solar story going forward, especially as prices come down and more people buy electric cars,” says David Bywater, CEO of Vivint Solar, echoing Musk’s pitch. “But it’s still a very new market.”
Just how new the storage market is becomes clear when looking at California, the nation’s hottest state for solar.
Although some 725,000 homes have solar on their roofs, only 4,000 of those homeowners have applied for a rebate from the state’s battery incentive program, according to the California Solar and Storage Association.
Will Tesla fans wait?
Although Tesla won’t disclose the level of demand for Powerwall, Straubel says “it’s a big success,” particularly in Australia and Europe, and its deliveries currently prioritize customers who have bought both panels and Powerwall.
Some of its current solar capacity also has been siphoned off by high-profile efforts such as helping Puerto Rico switch to solar power in the wake of last year’s hurricane.
Tesla also has made big efforts to secure enterprise contracts, such as the one in Australia where it will provide 50,000 homes with panels and Powerwalls, and another deal with PG&E that will provide 3,000 Powerpacks (an industrial version of Powerwall) at a California substation.
All of that means if you’re interested in going solar with Tesla right now, you’ll have to be patient. And some will be.
In New Bedford, Massachusetts, installer and solar energy blogger John Weaver says for some of his customers “the feeling is if you want the hottest and latest stuff, you have to go with Elon. The hope is still that he’ll deliver all of this at a price that works for the masses.”
Straubel insists that remains a safe bet.
“We’re not worried,” he says. “The growth ahead will be enormous.”
Contributing: Ryan Suppe
Follow USA TODAY culture writer Marco della Cava on Twitter: @marcodellacava