Tesla solar sees best quarter in 4 years, but ‘semiconductor challenges’ spell trouble

Tesla’s mythical solar roofs may be on ice right now, but its conventional solar business is a whole ‘nother story.

This afternoon, the automaker said the division notched its “strongest” quarter in more than four years, with a total of 106 megawatts deployed in Q2 2022. “Although we continue to experience import delays beyond our control on certain solar components,” Tesla reported, “we have expanded our supplier base to enable growth in this business.” Compared to the same quarter last year, Tesla upped solar deployments by 25%.

Speaking of delays: Tesla’s energy storage arm, which includes home and commercial battery systems, saw a year-over-year 11% drop in deployments to 1.1 gigawatt-hour. The firm blamed the decline on “semiconductor challenges,” which are at least due in part to Russia’s war in Ukraine.

Tesla’s solar business is still far from the highs it reported right after buying SolarCity, the insolvent company originally launched in 2006 by Elon Musk’s cousins. In the final quarter of 2016, shortly after the acquisition closed, Tesla said deployments had topped 201 MW. Months later, Tesla halted solar door-to-door sales and laid off hundreds of staffers. The division’s U.S. market share plummeted over the next few years. In other words, Tesla’s solar business is still recovering.

Tesla’s solar roofs may not be helping much. Though the company sells lots of panels that sit atop roofs, it has struggled to get its solar-tile business off the ground, so to speak. Musk publicly set high expectations for Tesla’s solar tiles, saying in 2016 that they “should last longer than the house” and could even become cheaper than a standard roof.

The CEO set a goal of 1,000 home installations per week back in 2019, but the company has reportedly failed to get anywhere close—earlier this month Electrek reported the company installed just 2.5 megawatts of solar roofs in Q2 2022. That would equate to roughly 20 medium-sized (9.6-kilowatt) home installations per week, according to my own back-of-the-napkin math. Tesla hasn’t said much on the record lately about its solar roof business.