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It has been five years since Tesla acquired SolarCity for around $ 2.6 billion.
To convince shareholders to approve the deal, Elon Musk hosted a sensational event in Hollywood, where he held up a shiny roof shingle, which he said was a miniaturized solar panel.
SolarCity was founded in 2006 by Musk’s cousins Peter and Lyndon Rive. He was backed by Musk, who served as board chairman of Tesla and SolarCity. Musk’s aerospace company SpaceX had also bought tens of millions of dollars in solar bonds from SolarCity.
“The goal is to create solar roofs that look better than a normal roof, generate electricity, last longer, have better insulation, and in fact have a lower installation cost than a regular roof. normal roof plus the cost of electricity. Why would you buy something? other? ”Musk said at the event in October 2016.
Roof tiles were going to be the next big innovation in residential solar energy, Musk said, and when Tesla and SolarCity are combined, the product would spur the growth of the business while providing clean energy to homeowners. .
After the deal was struck, however, Tesla-SolarCity’s new facility collapsed.
In Q4 2017, Tesla reported a 43% drop in solar deployments from when it purchased SolarCity. The company eventually lost its market leadership position in 2018 and now accounts for about 2% of the residential solar market, according to Wood Mackenzie. In the first and second quarters of 2021, Tesla installed 92 and 85 megawatts of solar power, respectively. This is less than half of what SolarCity installed per quarter before the acquisition.
Tesla moved some solar energy workers to work building the company’s electric cars and batteries, laid off other solar energy workers, and relocated others who were doing new installations to work on repairs and remediation.
Some of the solar roofs installed by the company caught fire. An employee who raised internal fire safety concerns and filed whistleblower complaints with federal government offices sued Tesla, saying he fired him wrongly as an act of retaliation.
Shareholders also sued, saying the acquisition amounted to a bailout for Musk and other businesses in his family.
While the judge won’t deliver his verdict in the derivative shareholder lawsuit until early next year, Musk said the SolarCity deal is key to realizing Tesla’s vision. He denied that SolarCity was in dire financial straits before Tesla acquired the business.
Today, there is growing demand and new government support for residential and commercial solar power across the United States.
But Tesla still does not mass produce and install a large number of Solar Roof tiles. Most of the growth in its Energy division has come from its energy storage systems – from back-up batteries for homes to large batteries for large-scale projects. Most of its residential solar income comes from traditional panel installations.
CNBC interviewed industry experts and recent Tesla solar customers to find out how the company is delivering on its solar promises. Their experiences were mixed, with customers in Washington, New York, and California lamenting poor customer service and unexpected issues with installing their solar panels, and others praising Tesla for making cars and systems that allow them to function in the sun.
Watch the video to hear their stories in full.
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