Tesla blames solar slump on interest rates as energy storage biz booms

Tesla’s solar installations are still slipping, the company told investors on Wednesday.

The automaker reported 66 megawatts’ worth of solar deployments during its second quarter of 2023, representing a 1 MW decline from the first quarter and a 40 MW decline from the second quarter of 2022. In other words, Tesla solar installations fell by roughly 37% from Q2 2022 to Q2 2023.

Tesla said the year-over-year decline was “predominantly due to a high interest rate environment that is causing postponement of solar purchasing industry-wide.” The firm’s energy deployments, however, are another story.

Compared to the same period last year, Tesla said it boosted energy storage installations by 222% to 3.7 GWh in Q2 2023. That’s not quite as stark a jump as we saw in the first quarter, when deployments popped 360%. However, the firm’s energy storage business still seems to be booming overall. Tesla said the Q2 results were in part “due to the ongoing ramp of our first dedicated Megapack factory (Megafactory) in Lathrop, CA.”

Second-quarter revenue from Tesla’s energy biz neared a record that the firm set back in Q1. The company reported about $1.51 billion in revenue in Q2 via its energy division, down slightly from about $1.52 billion in Q1 2023 and up substantially from the $866 million the firm reported for Q2 2022.