Tesla has invested heavily in the solar energy sector over the past several years, and the 2010s saw a decade of rapid growth in Tesla’s solar energy production and acquisitions. Elon Musk said then and now that he sees Tesla as a company delivering “energy innovation” rather than automobiles, but how does that stack up to Tesla’s current solar energy standards?
Tesla makes high-quality solar panels despite manufacturing them exclusively through third-party partners and subsidiaries. Tesla bought the solar panel company SolarCity and partnered with Panasonic to bolster its solar energy production needs.
So what does this mean about the quality of the solar panels that Tesla sells and installs? Read on to learn more about how Tesla’s strange journey to the top of the solar energy market has led to some unique growing pains as well as some top-quality products.
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Does Tesla Have High-Quality Solar Panels?
The solar panels produced, distributed, and installed by Tesla are high-quality panels. There’s not much question about that. The panels meet tough industry standards and Tesla’s quality control. They’re also backed up by strong warranties. However, the quality of the panels is not dependent on Tesla’s production.
Even though all of Tesla’s panels have the same function and are protected under the same Tesla warranties, the panels themselves are manufactured by third-party solar panel manufacturers that Tesla has bought or partnered with. Here are the two main companies that Tesla incorporated into its solar energy production:
- SolarCity: SolarCity is a solar panel manufacturer based out of Fremont, California, that was acquired by Tesla for the sole purpose of spearheading its solar panel and solar technology production.
- Panasonic: Panasonic is a Japanese company that partnered with both Tesla and its subsidiary SolarCity to work together in the large solar battery plant known as the Gigafactory in Buffalo, New York.
Along with having Tesla’s direct oversight, both SolarCity and Panasonic were reputable companies in their own right before Tesla ever intervened in their businesses. This means consumers can safely trust the quality of the solar panels and solar cells produced by Tesla’s production facilities.
Panasonic Withdrawing From Tesla Solar Production
While Panasonic has historically been one of the biggest partners of Tesla when it comes to the construction of their solar panel technology, the impact of COVID-19 and other industry factors strained the relationship between the two companies in 2020. In early 2020, the companies announced they would cease joint production of solar technology at the Gigafactory 2. (Source: CNBC)
Is Tesla Still Partnered With Panasonic?
Tesla and Panasonic aren’t partnering in joint manufacturing of solar technology, but that doesn’t mean that they’re done doing business with each other. Tesla plans to continue to buy solar cells and other solar energy technology through Panasonic at least through the end of 2022.
Tesla and Panasonic are also working together on developing new battery technology for electric vehicles. Since these new, larger-sized electric batteries come with significant design challenges, it’s safe to say that Tesla and Panasonic have backed off of solar panel production and that Tesla has pointed Panasonic back in the direction of its electric car line-up. (Source: Bloomberg)
Who Will Manufacture Tesla’s Solar Technology?
With Panasonic withdrawing slightly from Tesla’s control and being re-directed to focus on car batteries in 2021, what companies are Tesla looking at partnering with to outsource solar cells and panels? Here are two companies that Tesla has been looking into operating with overseas for solar technology production:
- CATL: CATL is the largest maker of batteries in China and is one of the largest manufacturers of electric car batteries in the world. Tesla has begun working to partner with CATL to try and mitigate some of its issues with demand outstripping the production of solar technology.
- LG Chem (South Korea): LG Chem is a South Korean company that recently came to terms with Tesla to take over a large part of their battery cell production. This production is likely to include solar battery systems such as the Tesla Powerwall.
Even though both CATL and LG Chem have traditionally been electric battery companies, these manufacturers are among the best companies available to be retrofitted for mass solar energy production.
One of the biggest challenges with quality control that Tesla has learned to face is that the demand for these state-of-the-art technologies far outweighs the current production supply. This supply and demand imbalance could lead to lapses in quality as the company fights to expand too rapidly.
Does Tesla Have Its Own Solar Panel Brand?
As of spring 2021, Tesla does not have its own solar panel brand. It is producing solar panels strictly through partnerships and through control of its subsidiary company SolarCity. However, this doesn’t keep Tesla from being confident enough to put its name on the products that it outsources.
Here are a few reasons that Tesla’s solar panels can be trusted although they aren’t technically produced by Tesla:
- Warranty: Tesla has enough confidence in its quality control and inspection procedures that it offers robust warranties against defective solar panel technology that can last up to a decade.
- Maintenance services: Along with installing solar panels, Tesla also offers solar panel cleaning and maintenance services. The inspections performed during these services help keep solar panels operating at maximum efficiency throughout the year.
- Technical support: Tesla provides many technical support options for all of its products from solar roofs to electric vehicles. This technical support makes it easy for anyone who runs into a quality control problem or technical issue to resolve it quickly.
Why Does Tesla Use third-party Solar Panels?
Tesla has been in the solar energy business for several years at this point, so many market analysts and consumers are probably wondering why they don’t go into business producing solar energy panels and components for themselves. There are a few reasons for that decision, most of them practical in nature.
Tesla Factories Were Not Prepared for Solar Manufacturing
Tesla production is historically outfitted for producing vehicles. Retrofitting factories for new manufacturing processes can take millions of dollars and lots of time to do right.
The manufacturing processes for making electric cars are nothing like the processes necessary for building solar cells and panels. It was easier for Tesla to outsource manufacturing to companies and factories that have already built their manufacturing processes around solar energy components.
It was cheaper than building manufacturing facilities from scratch, could meet a high production demand more quickly, and helped Tesla network with other solar companies in the industry.
Tesla Can Produce Solar Batteries Cheaper Overseas
While Tesla currently still uses SolarCity as its main subsidiary manufacturer for solar panels, this is because SolarCity was already the primary manufacturer of all solar panels in the United States.
There are many disadvantages to Tesla tying its manufacturing down to American facilities such as higher wages and production costs. Since China is Tesla’s largest growing market for electric vehicles, it also makes sense for Tesla to set up production directly where many of its new products will be sold.
Does China Make High-Quality Solar Panels?
No matter which solar panel company you purchase your solar panels from, chances are they include some technology that was manufactured in China. Over two-thirds of all solar panel equipment in the world is manufactured in China. (Source: Solar Reviews) It isn’t an exaggeration to call China the energy production hub of the world.
Tesla still performs most of its solar panel production through its American-based subsidiary SolarCity, but all signs point to Tesla investing in more solar energy production in China in the future. China has maintained a dominant market share in solar technology for years. Despite the imposition of export tariffs, it doesn’t look like that is going to change any time soon.
Since Tesla is aiming to become the world’s leading company in energy innovation, it’s no surprise that the company has invested heavily in a country that is known as the primary electric battery manufacturer of the world. (Source: Voice of America)
Partnering with China to produce its solar panels and electric car batteries allows Tesla to save money on manufacturing it can then invest in refining the technology it is trying to sell rather than producing it wholesale.
Are Tesla Solar Panels Affordable?
Tesla solar panels are high-quality, but are they affordable? The good news is that yes, one of the reasons tha Tesla already has a high degree of popularity in the solar energy sector is that it can manufacture solar technology at a significantly cheaper cost than solar technology from smaller companies.
Here are a few reasons that Tesla can offer its solar panels at a lower price than other solar energy companies:
- Tesla doesn’t have to market itself. Due to its popularity as a company and the iconic figure of Elon Musk at the helm, Tesla has to spend very little money in advertising its products. Most solar companies do not have Tesla’s global notoriety. Few people would know SolarCity outside of its association with Tesla. Reputation works in Tesla’s favor.
- Tesla needs less sales investment. From its beginning as an electric car company, Tesla has performed many of its sales online through digital storefronts rather than physical storefronts. This sales design greatly reduces the need to pay for employee wages, benefits, health insurance, and overhead for physical venues.
- Tesla is diverse. Because Tesla was a successful car manufacturer before the company moved into the solar energy sector, it can throw the working capital of the electric car industry behind all of its investments in solar technology. This positively impacts the scope of solar manufacturing and rapid expansion initiatives.
- Tesla is careful about production investment. Despite making great promises for quality and delivery, Tesla is careful not to over-extend itself financially when setting up new production facilities of its own. Instead, it chooses to use pre-existing facilities, which helps to keep solar panel production costs down.
When everything is said and done, Tesla can manufacture and sell solar panels at $1.49/watt in comparison to the average solar panel company which is only able to manufacture and sell solar panels at $2.18/watt. This might not seem like much initial difference, but these saved costs can add up over time as the solar panel system pays itself off.
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Tesla Helps Buyers Afford Their Solar Technology
On top of Tesla’s solar panel production costing less per watt than any other solar technology currently on the market, Tesla also has other options on offer to help consumers afford the upgrade to solar panels.
Along with the option to pay for the entire solar energy system with cash up-front, Tesla also offers loan programs and even long-term leasing. However, these leasing programs aren’t offered in every area.
Tesla also encourages consumers to take advantage of the federal tax credit for the purchase of green energy and solar-based technology. Once purchased, a solar panel owner can get back 26% of their solar energy system purchase as a federal tax credit. Some state and local governments also run similar green energy incentive programs that can be beneficial. (Souce: Tesla)
Are Tesla Solar Panels Efficient?
Tesla solar panels are rated among the most efficient solar panels that are currently available on the market. Tesla is manufacturing its solar panels through SolarCity, but they’re also manufacturing through a South Korean company called Hanwha.
Tesla’s solar panels sourced through Hanwha are reported to have a 19.6% efficiency, which is higher than most of the Chinese solar panel products on the market at 17%. (Source: Solar Reviews)
From a technical standpoint alone, this makes Tesla solar panels one of the most efficient solar panels on the market. But there are other aspects of Tesla’s solar panel production which increase their efficiency too. Here are some aspects of Tesla’s production and distribution that contribute to the efficiency of its solar energy systems:
- Purchase efficiency: Tesla’s digital storefronts and online sales have made purchasing a solar energy system a snap compared to experiences with purchasing a solar energy system only a few years ago. Their financial flexibility also makes it easier for consumers to come to payment terms that work for both them and the company.
- All-in-one service: Tesla not only sources production of the solar panels it sells, but it also handles distribution, installation, financing, and maintenance. This streamlines the entire process of setting up a solar energy system in the home.
- Integrated smart technology: One of the biggest unspoken advantages of getting a Tesla brand solar energy system is that the system is designed to integrate seamlessly with other Tesla products. Using smart software, Tesla can keep energy consumption as efficient as possible by making micro-adjustments for energy efficacy.
Problems with Tesla’s Solar Panel Efficiency
The biggest challenge facing Tesla with its leap into the solar energy sector is securing the production to back up the sales. This has been an issue for the rapidly-growing company since its inception, and has affected its solar energy expansion as well as its production and distribution of electric cars.
Over the past several years Tesla has struggled to manufacture solar technology at a rate that came close to meeting the demand for the technology, with some Powerwall systems taking over a year from commission to installation and others delayed indefinitely.
While it seems like many of Tesla’s production issues are smoothing out through its outsourcing partnerships with other major manufacutring companies like LG Chem and CATL, these growing pains are expected to continue as Tesla continues to expand in leaps and bounds at the cutting edge of what the industry can support.
Advantages of Tesla Solar Panels
The quality of Tesla solar panels is only one of the many advantages associated with the brand. Tesla Energy may be a relatively new sector of the company, but it is also one of the fastest growing departments in Tesla.
These are just a few of the benefits you can enjoy from investing in Tesla solar panel technology:
- Free online quote: Doing comparison shopping for a solar energy system is important since these systems are designed to last for decades and can involve investing thousands of dollars. Tesla provides a free online quote for their solar energy system so that consumers can get a good idea of the costs before financial commitment.
- Complete installation: Many home renovations that consumers order involve a lot of micro-management of different contractors and workers, but Tesla’s all-in-one setup allows consumers to take a hands-off approach to getting their solar system installed. After payment, Tesla will handle everything else from installation to annual maintenance.
- Price match guarantee: Tesla is so confident in its ability to bring consumers affordable solar panel technology that it’s willing to do a price match for any competing manufacturer’s solar panels. Since Tesla’s solar technology is arguably the cheapest on the market despite its quality, they don’t have to price match often.
- 24/7 software monitoring: Tesla provides consumers a way to monitor their solar energy system’s operation twenty-four hours a day through their integrated Tesla software application that uses a smart device to allow consumers to hook into the system remotely at any time.
- Confident warranty system: All Tesla-based solar panels come with a 25-year warranty despite their relatively cheap price compared to other solar panels on the market. Solar energy consumers who go with Tesla know they’re going with a company that has a strong reputation around the world for customer service and support.
- Integration into other Tesla systems: With every iteration of Tesla’s solar energy technology, it develops a more seamless integration between different devices such as the Tesla vehicle, Powerwall, and solar roof. Integrating these systems allows users to set up a smart home that is customized for maximum energy efficiency.
The solar panels offered by Tesla may originate from third-party manufacturing sources, but that doesn’t mean that they aren’t held to the same high standards for quality and innovation that the rest of Tesla’s products have developed a reputation for.
Tesla provides the cost benefits associated with a large corporation since it has been able to re-invest in its production lines to streamline costs, but its focus on digital support and state-of-the-art software has put Tesla solar panels at the forefront of the market when it comes to solar panel quality.
Disadvantages of Tesla Solar Panels
There are many benefits associated with Tesla solar panels, but there are also a few drawbacks associated with them too that consumers should consider. Here are a few standout disadvantages to buying and installing Tesla solar panels:
- Involvement in Chinese industry: Many consumers may have ethical questions about purchasing equipment from China due to human rights violations and poor working conditions. Tesla may have once manufactured the majority of its solar power components in California, but this is rapidly changing in the 2020s.
- Unreasonable wait times: Up until recently, Tesla’s solar energy production was severely bottlenecked, with some consumers reporting wait times of over a year from the time they commissioned a solar energy project through Tesla to the time it was actually installed. This is an issue that is still affecting delivery of Tesla systems today.
- Leasing unavailable in all areas. Even though Tesla has a worldwide reputation for innovation and excellence, it is still a new and fairly small company in the grand scheme of things. As a result, Tesla has struggled not only with producing enough products to meet demand, but also in some aspects of supporting or financing those products.
Tesla’s solar panels may come with a few setbacks, but overall the advantages associated with going through Tesla for your solar energy needs far outweigh the disadvantages. And a few of the disadvantages of using Tesla, such as Chinese manufacturing, are disadvantages faced by companies in solar energy across the board.
Benefits of Solar Panel Technology
There are advantages to going with Tesla solar panels specifically, but what about the advantages of going with solar power in general?
There are many aspects of converting to solar panel usage that can make consumers leery about making the jump, such as high up-front costs and a lack of familiarity with the technology. However, ther’es never been a better time to invest in solar energy for your home or business. Here are just a few of the reasons why:
- Solar energy increases energy security. One of the best things about solar energy systems is that they allow consumers to stockpile electrical energy for later use in case the traditional power grid goes down. This is a useful quality for many users, especially those that depend on stable energy access in unstable grid conditions.
- Solar energy is environmentally friendly. In the 21st century the issue of extreme climate change has become a flashpoint in popular culture, and one way that the average person can fight back against excess carbon emissions is to switch to green sustainable energy sources.
- Solar energy is cheaper over time. While it might take a little under ten years for most people to use their solar energy system enough for it to pay itself off, installing a solar energy system makes you more energy-conscious overall and can contribute to lower utility bills as you seek out other ways to reduce your energy consumption.
- Solar energy works worldwide. Some types of green energy such as geothermal energy or energy that is generated by water or wind is restricted by the types of areas where this natural energy source can be efficiently collected. The sun shines all over the planet, however, which makes it the most accessible form of green energy available
- Solar energy systems can increase the worth of your home. Clean energy systems are a worthwhile investment for residences since they have long-term durability and can help save the home in utilities over time. Green systems like solar are especially popular in “off-the-grid” locations like the rural Northwest and Alaska.
- Solar energy provides freedom from the grid. Being dependent on a government utilities grid for electricity leaves consumers vulnerable to negligence. In extreme cases such as the Texas winter storm of 2021 that left millions without power for weeks in extreme cold temperatures and killed over a hundred people, dependence is dangerous. (Source: New York Times)
Solar energy may not have caught on in a mass transition from fossil fuels yet, but there’s no doubt that it is one of the fastest growing energy sectors in the world. Consumers who invest in solar energy now will benefit from being on the forefront of the most advanced energy generation technology in the world.
Tesla Produces High-Quality Solar Panels
There are several business decisions that Tesla has made over the years that may make consumers question whether their products live up to the massive amount of hype associated with them.
But when it comes to Tesla’s solar energy sector, the hype is real. Through strategic management of its financial resources and by networking with major solar tech suppliers around the globe, Tesla has managed to maintain a high level of production quality for its solar panels at the same time as they reduce costs for the technology and make it more accessible.