Tesla (NASDAQ:TSLA) has owned SolarCity for less than six months, and in that time, it's blown up the business. The solar factory in Buffalo, New York, that was building 1 GW of capacity with technology acquired from Silevo has been turned over to Panasonic, installations have slowed dramatically, and now the door-to-door sales force that's driven SolarCity's growth is being "reassigned" or laid off.
There's clearly a different vision for solar within Tesla, it's just not clear if that vision will ever become a reality.
The end of door-to-door sales at Tesla
One of the hidden secrets of the residential solar industry is that it's long been driven by door-to-door sales. SolarCity has long used it and Vivint Solar (NYSE:VSLR) was actually built on a door-to-door model. But that leads to high customer acquisition costs because thousands of sales people have to be paid, which has been a stubborn cost for residential solar companies to reduce.
Tesla has always said that it would transition to more online sales and bring solar to its retail locations to reduce costs. And that thinking makes sense if it's replacing door-to-door sales with... something.
But Greentech Media reported recently that solar has yet to show up in Tesla stores and it's not clear how online sales will keep the company's installation teams busy (solar is a notoriously time intensive sales process). And if installation crews aren't busy they'll keep getting paid with nothing to do. That was always the biggest risk in Tesla acquiring SolarCity's ~$1 billion in operating costs.
The solar roof deadline has come and gone
One product that could excite customers and justify the installation crews from SolarCity is the solar roof. Elon Musk tweeted that customers could begin ordering the solar roof in April (a tweet that's since been deleted) but on May 1 as I'm writing there's no sign of a solar roof. No pricing, no technical details, and certainly nowhere to order it or schedule installation.
The solar roof along with the Powerwall were supposed to be the products that completed the renewable home energy product lineup, along with the electric vehicle. That vision becoming a reality is currently on hold.
What is Tesla doing with solar energy?
In a way, it makes a lot of sense for Tesla to shut down door-to-door sales of solar, but it has to replace those sales with something. If solar isn't being rolled out in retail locations and the solar roof is still on hold for unknown reasons it just looks like Tesla is slowly shutting down its solar operations.
This is another time where I wonder why Tesla bought SolarCity at all. The company's greatest assets have been shut down and Tesla's future plans for solar appear to rely on capabilities SolarCity never had in the first place (retail stores and the solar roof). Until Musk releases more information, solar looks like a back burner issue for Tesla, which is odd because it means the slow deterioration for SolarCity, who was once the dominant name in rooftop solar.