This is Where Tesla Makes (or Buys) Solar Panels


This is Where Tesla Makes (or Buys) Solar Panels

Since its 2016 acquisition of SolarCity, Tesla has been innovating within the solar industry to bring homeowners a variety of products that enable them to be less dependent on the grid. But just because these products are branded under the Tesla name does not mean that Tesla manufactures them.

Currently, Tesla is using panels made by Hanwha Q CELLS, a South Korean Company with a plant in Jincheon. Up until recently, Tesla had partnered with Panasonic to make solar panels in Buffalo, New York. The solar company has always used solar panels manufactured by other companies.

Any answer to a question about Tesla involves way more work than it should. The company’s penchant for dramatic reveals ahead of product reliability and, in some cases, development often makes for a convoluted history. Fortunately for you, the research on Tesla’s solar panels is all right here in this article. Read on to find out where Tesla buys its solar panels.

This is Where Tesla Solar Panels are Made

Information for this is not readily available on Tesla’s website. So while the answer is hard to come by, Tesla currently seems to be using solar panels manufactured by the South Korean company, Hanwha Q CELLS, which has headquarters in Seoul, South Korea, and in Thalheim, Germany.

Today, Hanwha Q CELLS manufactures solar cells and panels at many different locations throughout the world. Among the most significant are:

  • Jincheon in the Chungcheong province in South Korea
  • Dalton, Georgia, United States

Both factories are enormous, with the Jincheon facility occupying an area about the size of 26 soccer fields and the Dalton factory coming in at about 300,000 square feet. The Jincheon factory is described as fully automated using artificial intelligence and robotic technology, while the Dalton factory is said to employ around 650 workers.

It is not known exactly from which factory Tesla gets its solar panels (again, the company is no help here). Theoretically, they could come from either one, although it seems likely they would come from the plant in Georgia.

The Hanwha Company

Hanwha has a long history in South Korea that dates back to 1952 when the country was struggling through the compounded disarray of:

  • World War II
  • The Korean War

The company made its name at that time by manufacturing industrial explosives. This supplied a need brought about by the country’s growing infrastructure. Thus, Hanwha had a key role in the establishment of South Korea as it is known today.

When Hanwha discovered how to develop nitroglycerin, it was able to dramatically decrease its need on foreign suppliers. As a result, it could produce its product using materials from its own country.

The company has expanded to encompass a variety of industries since that time, including the solar industry starting in 2010 with Hanwha SolarOne. Later Hanwha SolarOne merged with a German solar manufacturer to form Hanwha Q CELLS. In addition to the ones already mentioned, Hanwha Q CELLS has plants in China and Malaysia.

Why Is This Information Hard to Find?

Tesla contracts its solar panels to other makers, but they are sold as a part of Tesla’s service. So, it makes sense that the solar company would not be as open about who is manufacturing their solar panels as they have been in the past for several reasons:

  • Since Tesla paid for the panels, they belong to Tesla as part of the service Tesla provides its customers.
  • Tesla has always striven for a unified aesthetic in its products.
  • Other companies can buy and sell the same panels.
  • If customers were to know where Tesla bought its panels, it would potentially make it possible for those customers to bargain shop since they would not be under an exclusive relationship with Tesla.

The last reason above is probably the most significant. Tesla does not appear to be in an exclusive relationship with Hanwha, so the company likely does not want their customers to be able to find their products elsewhere and go with another installer and solar energy provider. That said, Tesla is now offering a price match guarantee.

Tesla takes pride in its sleek approach to aesthetics, and it has been a big selling point for their solar products. The push for a more aesthetically pleasing solar panel product has come from Tesla, and they have innovated that look like an overall approach to solar energy, so in many ways, the solar panels are very much Tesla’s.

Not the least of which is the fact that Tesla owns the panels. Once the company has bought the solar panels, they belong to Tesla and Tesla’s service. As far as the customer is concerned, Tesla wants them to identify the panels as Tesla’s, no matter who made them.

Tesla Solar Panels Were Not Always Made in Korea

Tesla is known for manufacturing a variety of its own products. From cars to Powerwalls, Tesla has brought its product innovation to factories in the United States many times over. This even includes Tesla’s Solar Roof, which is manufactured at the Gigafactory in Buffalo, New York.

However, some parts and products have always been made by other companies. This is true for Tesla and many other companies as well. These parts include:

  • Solar cells (which go into both solar panels and Solar Roofs)
  • Solar panels

But if the company makes its own Solar Roof in Buffalo, New York, why does it not make its own solar panels there? This question is further complicated by the fact that Tesla’s solar panels used to be made at the Gigafactory 2, but not by Tesla. They used to be made mostly by Panasonic, although Tesla bought some from other companies as well.

It has only been since 2020 that the company has gone elsewhere for the majority of its solar panels. The history of the partnership between the two companies actually dates back to prior to Tesla’s acquisition of SolarCity. As such, the two were closely linked for four years, during which time their solar panels were made in Buffalo.

What Tesla Gains from Outsourcing

On the surface, Tesla seems to have lost a pretty good deal. They no longer have oversight on the manufacture of their product in the location that they operate from. This is the ideal thing that Tesla has always striven for with their other products. Now that the partnership with Panasonic has ended, Tesla no longer has:

  • An exclusive solar panel product
  • Oversight and input into its manufacture

But the news is not all bad. Since 2019, Tesla has been in the position of trying to up its game in the world of solar energy. In 2019, the company reported the lowest number of solar installations in its history. They needed to make a change, and one of the areas they needed to change was the price.

By now being back in the world of non-exclusive third-party solar panels, they have the opportunity to shop around for a cost-effective product that will enable them to take part in more price saving initiatives such as:

  • Subscription service
  • Price match guarantee

Tesla uses the above price-saving initiatives to pass savings along to its customers.

Are Warranties on Solar Panels Affected?

Because they are coming to you through Tesla’s service, Tesla still warranties their products no matter who makes them or where they are made. Tesla is the one installing them, so they take on the risk of warranting the product that they are supplying to you, the customer.

Tesla has always had a good warranty which includes:

  • Warranty on the performance of 25 years
  • Warranty on the inverter for 12 and ½ years

The warranties offered on Tesla’s website in regards to its solar panels are still in place.

The Practice of Buying Third-Party Solar Panels

The practice of buying solar panels from a third party that manufactures them is not all that unusual. Solar companies have been doing this for years, and it has not led to a low level of service from any one provider. It is typical for providers to focus on:

  • Installation
  • Service
  • Maintenance

But solar companies rarely, if ever, participate in the manufacture of the solar panels that they sell to their customers.

As far as Tesla is concerned, this practice goes back to SolarCity days. At that time, SolarCity worked exclusively with third-party manufacturers. Even during Tesla’s partnership with Panasonic, the company still bought third-party panels, though the majority of them, almost 70 percent, they bought from Panasonic.

In fact, you could say that the unusual arrangement was the partnership that Tesla had with Panasonic. While they worked together, Tesla could claim to have its own brand of solar panels (they were simply rebranded from Panasonic) made in its own factory (even though they were made by Panasonic).

When looking at where Tesla solar panels are currently manufactured, it is important to understand where they were manufactured in the years prior and the circumstances that left Tesla to look for a manufacturer of their products in another location.

Tesla’s Partnership with Panasonic

For several years, Tesla had a partnership with the electronics company Panasonic. In that partnership, Tesla and Panasonic shared the use of Gigafactory 2 in Buffalo, New York. How they split up the division of who made what was kind of confusing, but here is the way it looked:

  • Tesla supervised their factory as a whole and made their Solar Roof tiles.
  • Panasonic manufactured the solar cells (which were used in the Solar Roof and the solar panels).
  • Panasonic also manufactured the solar panels exclusively for Tesla.

This arrangement was further complicated by Panasonic’s partnership with Silevo, which was a solar company acquired by SolarCity before SolarCity was acquired by Tesla. In the arrangement at the Gigafactory 2, Silevo worked with Panasonic on the manufacture of the solar cells.

It is not currently known who Tesla will turn to for the manufacture of their solar cells, which are a significant component of their Solar Roof. But because of the end of the partnership with Panasonic, they have turned elsewhere for the manufacture of their solar panels (which also need solar cells but come with the panels they buy).

Development of Tesla and Panasonic at Buffalo

It seems that even before the acquisition of SolarCity, Tesla wanted control of the design of its solar panels as well as oversight of their manufacture, including where they would be manufactured. This is consistent with the approach the company has taken with almost all its other products.

In October of 2016, a letter of intent was released on behalf of the two companies explaining the deal that they had made of manufacturing solar panels at the Gigafactory in New York. It was, of course, contingent on Tesla’s acquisition of SolarCity, which was not voted on until November of that year.

Nevertheless, what is interesting is that the partnership always had the location focus of the Gigafactory 2 in New York. This location was especially significant to the state of New York. While the factory is typically thought of like Tesla’s, it is actually owned by the state and leased to Tesla as long as they:

  • Employ at least 1,462 people at the plant
  • Generate employment locally

The state of New York insists on these conditions because they invested around $750 million in the plant for the purpose of bringing jobs to the region.

Problems with Tesla and Panasonic at Buffalo

While the relationship seemed to be a golden one when Tesla unveiled its new solar panel made by Panasonic in April of 2017, it faced growing difficulty over the next two years because of Tesla’s poor performance in the solar industry.

Tesla installed fewer and fewer megawatts worth of new systems in the US until they had their poorest showing in 2019. This significant drop in performance meant that the company was buying less of the solar cells and panels from Panasonic than they had originally thought they would.

As a result, it was revealed in May of 2019 that Panasonic was selling most of its solar cells overseas and comparatively few to Tesla. Because solar cells are essential to the production of solar panels, this means that Tesla was not buying as many of Panasonic’s exclusive solar panels as they had hoped.

End of the Tesla and Panasonic Partnership

In February of 2020, Panasonic announced that it would end its partnership with Tesla making solar cells and solar panels at the Buffalo, New York Gigafactory 2.

The dissolution was initially delayed by the pandemic. Because of the lockdown, no work was done at the factory for a couple of months. But by the time 2021 came around, Panasonic was no longer operating out of Gigafactory 2, and Tesla was buying their solar panels from a company in a different location.

The Move to Non-Exclusive Third-Party Solar Panels

In moving to a non-exclusive agreement with a third-party supplier of solar panels, Tesla is going back to the old SolarCity way of doing things. Oddly enough, that was back when SolarCity was the top solar energy provider in the nation. It is a common industry practice, but not a common Tesla practice, so maybe it is time they changed.

For example, with their cars, they operate a factory in Fremont, California, taking up 370 acres. With the Solar Roof, Tesla has tried to maintain as much control over the product as possible by:

  • Manufacturing it in house
  • Creating their own workforce for the roof installations

But perhaps Tesla’s bid for control over every aspect of their products has been their downfall. Their cars have had production problems, and their Solar Roof still struggles to get into full production, to say nothing of the level of installations per week that they want to achieve.

It is clear that Tesla tried to do a hybrid of this kind of approach with the Panasonic agreement, making them unique in the industry and giving them a selling point that they were clearly proud of. But moving to a third-party supplier who makes the solar panels in different locations is not a bad thing. It may even help the company gain ground.

Conclusion

As Tesla moves forward with trying to regain their once-legendary status in the solar industry (which was due almost entirely to the work of SolarCity), it remains unclear as to how they will proceed with supplying their solar panels. Will they continue to buy from Hanwha? Will they try to forge another relationship like what they had with Panasonic?

It seems likely that the company will try yet again to carve out an approach that allows them to have a measure of input and control over their product, similar to the way they did with Panasonic.

What is clear is that, while the company as a whole made a profit in 2020, the solar arm of Tesla still has work to do to make them a viable part of that company. The end of the Panasonic agreement seemed like another blow, but Tesla is nothing if not tenacious, so whether they continue with Hanwha or not, they will keep supplying solar panels.

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Greg

Hi, I'm Greg. My daily driver is a Tesla Model 3 Performance. I've learned a ton about Teslas from hands-on experience and this is the site where I share everything I've learned.

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