Tesla has launched Rent Solar, a solar rental service, hoping to make a comeback in the solar industry. The customers can enjoy green energy for just US$50 a month, without having to shoulder the upfront cost of the solar energy installation. Tesla hopes to revive its Rooftop Solar Power efforts, of which installed capacity has fallen to 29 MW in Q2 2019.
Elon Musk has announced his new plan on Twitter last weekend: Tesla will launch Rent Solar, a solar module rental service, in California, Arizona, Connecticut, Massachusetts, New Jersey, and New Mexico. Consumers do not have to worry about the initial cost of installing solar modules. Nor is it a long-term contract. They can simply enjoy solar power.
The monthly rent for solar arrays is usually US$50 a month, except for California (US$65), according to Tesla. However, there are only three system sizes, including 3.8KW, 7.6KW and 11.4. KW. The average daily power generation of 3.8 KW solar panels is 9 to 12 kWh. Consumers can certainly purchase solar panel arrays directly. But the cost is relatively higher. There are three different sizes of solar arrays to choose from: small (US$7,049), medium (US$14,098), large (US$21,147).
According to Tesla's official website, this program is said to be able to help consumers save a lot of power bills. If you adopt Rent Solar in California, you can save up to US$650 per year.
Investment, like the proverbial double-edged sword, can make or break your finances. Before jumping on the Solar Rent wagon, it is advisable to read the contract as well as the fine prints thoroughly. Regarding the rental cancellation, the consumers can certainly cancel the monthly plan at any time. However, a payment of US$1,500 US dollars will need to be paid for solar array removal and roof restoration. Plus, Rent Solar does not come with a battery energy storage system. Musk explained that although it is better to buy solar panels directly, the monthly rental service highlights the economic benefits.
Can Rent Solar save Tesla’s solar energy business?
Tesla Solar has not been performing well this year. According to Tesla's 2019 Q1 earnings report, the first quarter has lost about US$700 million. The energy storage and solar energy business have decreased by 21% year-over-year. The PV installed capacity has decreased by 36% YOY, from 74 MW in Q1 2018 to 47 MW in Q1 2019. Tesla has installed only 29 MW of solar energy in Q2 2019, which has been declining for three consecutive seasons, down 38% from Q1 2019, and down 65% year-over-year.
The decline in Tesla's rooftop solar orders may be due to the cancellation of the cooperation with Home Depot in June 2018, a US home improvement and building materials retailer. According to the agreement, Tesla Solar will no longer be sold in Home Depot's 800 stores from 2019 on. While the distribution and personnel costs are saved, the visibility of Tesla Solar is also reduced.
In order to stop the business from plummeting into oblivion, Tesla also launched a series of reforms. For example, the price per watt is now lower than US$1.75 to 1.99, which, according to the Solar Energy Industry Association (SEIA), is 16% lower than the average of US$2.08 per watt. In addition to lowering the price, Tesla simplified the purchase process as well as shortening the duration between receiving the orders and field installations.
Tesla CEO Elon Musk has also previously set a new goal on Twitter: by the end of 2019, Tesla will produce 1,000 solar roofs per week. The development of the third-generation solar roofs will be accelerated. Taking into account the needs of consumers, he also plans to introduce solar batteries with a longer lifespan and easier installations.
Tesla has hoped to stimulate purchase activities via lowering solar prices and brand new sales policies. Now the innovation powerhouse has once again launched a brand new rental services for solar power. It remains to be seen if this is another of Tesla’s ingenuity at work.
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