To boost sagging solar business, Tesla will let customers rent panel systems
In an effort to boost its flagging consumer solar panel business, Tesla now allows new customers to rent their solar-panel systems at prices starting at $65 a month in California.
Tesla CEO Elon Musk on Sunday introduced the solar-panel rental program via Twitter, saying the new program is “like having a money printer on your roof if you live in a state with high electricity costs.”
“One click to order & save ~$500/year in utility bills with no long-term contract (cancel anytime),” he tweeted.
The move to juice its solar business comes after Tesla reported another disappointing quarter for solar installations. During the second quarter of this year, Tesla installed a record-low 29 megawatts of solar systems, down from 47 megawatts during the first quarter of the year, and 84 megawatts in the second quarter of 2018.
“This is Tesla trying to stoke demand for its solar products,” said Gene Munster, managing director at Loup Ventures. “It’s Elon thinking outside the box. But its important to keep it in context.” Munster noted how in early 2018, Tesla ended a partnership in which it had tried to sell solar panels to consumers at Tesla kiosks inside of Home Depot stores after the effort failed to take off.
Tesla said that in California, the rental program will initially be available to customers of Pacific Gas & Electric, Southern California Edison, San Diego Gas & Electric and the Los Angeles Department of Power & Water. Solar-system rentals also are available to residents of Arizona, Connecticut, Massachusetts, New Jersey and New Mexico; in those states, monthly rentals start at $50 a month.
The new program bases its rental fees on the type of system Tesla estimates a house will need for its particular size. The $65-amonth price is for a house that’s 1,000 to 2,000 square feet in size. Tesla says a medium-sized system, for 2,000- to 3,000-squarefoot homes, can be rented for $130 a month; largescale solar panel systems will cost $195 for homes greater than 3,000 square feet.
Tim Bajarin, president of tech research firm Creative Strategies, said offering solar panels rentals could be significant for Tesla because “the option introduces a new model in solar installations and could be the catalyst that helps Tesla’s Solar business take off.”
Tesla said the rental packages come without any long-term contracts or service cancellation fees. If a renter chooses to have the solar panels removed, and their roof restored to its prior state, they will have to pay $1,500 to cover Tesla’s removal costs. The company said it won’t make a profit off those cancellation fees.
Musk said on Twitter that it was “still better to buy” a Tesla solar-panel system, but “the rental option makes the economics obvious,” and that solarpanel renters could save as much as $500 a year on their electrical bills.
One perk that renters won’t receive is the federal tax credit that comes with buying a home solar-power system. For example, Tesla said that a customer who purchases a system for a small home will get a federal tax credit of $3,249, which would bring the purchase price to $7,581. The tax credits increase along with the sizes of the solarpanel installations.