Tesla Energy’s solar and battery systems are hitting major milestones

(Credit: Tesla)

The full potential of Tesla’s first-quarter in 2020 may have been limited by the outbreak of the coronavirus, but this hasn’t stopped the company’s Energy business to hit several important milestones. As indicated in the Q1 2020 Update Letter, Tesla Energy saw significant progress in the company’s solar and battery storage products.

Tesla’s flagship solar product, the Solar Roof, took a while before it entered mass production. The company launched the third version of the solar shingles last year, and it has been ramping the product’s output ever since. Gigafactory New York was able to produce 4 MW worth of Solarglass Roof V3 tiles every week in the first quarter. That’s enough to accommodate 1,000 homes weekly. Tesla noted in its Q1 2020 Update Letter that feedback from Solar Roof customers has been very positive so far as well.

Tesla’s gargantuan Megapack battery storage units have also been gaining significant traction, with the product’s demand being above the company’s capacity to manufacture it. The grid-scale battery systems are pre-assembled in Gigafactory Nevada as a single unit, allowing for quick installations.

Large scale battery storage products like the Megapack hold the key to Tesla’s disruption of the energy sector, an idea that is becoming more and more feasible amidst the success of battery installations like the Hornsdale Power Reserve.

Even the residential-grade Powerwall battery saw its own milestone in Q1 2020, with Tesla installing its 100,000 home battery unit. Interestingly enough, over 40% of Tesla Solar’s customers end up purchasing at least one Powerwall battery to provide their homes with off-grid capabilities. Just like the milestones of the Solarglass Roff V3 and the Megapack, the Powerwall’s breakthroughs in the first quarter hints at the potential of Tesla Energy, a business that is rarely considered by analysts covering the company.

It is important to note that Tesla Energy’s momentum was cut short in the first quarter due to the outbreak of the coronavirus in the United States. With states going on quarantine and social distancing rules being encouraged, installations of Tesla’s energy products have been largely halted. Had Tesla Energy been able to complete the first quarter without being disrupted, its results would have been even more impressive.

Tesla Energy usually takes a backseat to the company’s electric car business, but its potential is vast. Legendary billionaire investor Ron Baron has previously noted that he believes Tesla Energy could account for $500 billion of Tesla’s market cap by 2030. By that time, it would be just as big as the company’s EV business. Tesla Energy’s milestones this Q1 2020 may very well be a step towards this future.

Simon Alvarez: Simon is a reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday.
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