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Tesla slips to third place for solar installations in the U.S., Sunrun keeps lead

Tesla throws the towel on growth in residential solar, Wood Mackenzie says

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By Claudia Assis, MarketWatch


Bloomberg News/Landov
A solar panel is displayed on a wall at a Tesla Inc. showroom in New York.

Tesla Inc. dropped to third place in U.S. residential solar installations and Sunrun Inc. gained market share and kept its lead, according to a report Wednesday by consultants at Wood Mackenzie.

Tesla /zigman2/quotes/203558040/composite TSLA +1.36%  installed 6.3% of U.S. residential solar capacity in the first quarter of this year, Wood Mackenzie said, the first time the company slipped to third place since the consultancy has been tracking solar-installer market share back in 2013.

See also: Tesla shares rise after Elon Musk says there is no demand problem

“Tesla has essentially thrown in the towel on pursuing growth in the residential solar space because it has concluded that acquiring customers is simply too expensive,” analysts at Wood Mackenzie said. “Rather, Tesla will rely on its brand power and low-cost referral methods to keep the solar business afloat until it stabilizes.”

Vivint Solar Inc. /zigman2/quotes/202100570/composite VSLR -2.37%  reclaimed the No. 2 spot for the first time since falling to third in the third quarter of 2017, Wood Mackenzie said.

Sunrun /zigman2/quotes/205021014/composite RUN -0.32% , which overtook Tesla for first place in the second quarter of 2018, gained market share over both Tesla and Vivint Solar, installing 11% of all home solar capacity installed in the first quarter of the year, its highest share ever, Wood Mackenzie said.

Sunrun, Vivint, and Tesla combined installed a quarter of U.S. residential solar-power capacity, Wood Mackenzie said. At its peak, Tesla alone accounted for more than a third of the U.S. residential solar market.

“Despite stronger growth from the rest of the market, the growth outlook for 2019 – like 2017 and 2018 – continues to be hampered by Tesla’s decisions to cut back on its customer acquisition channels, though less severely than in previous years,” Wood Mackenzie said.

Related: Nvidia and Volvo join forces on driverless trucks

The consultancy forecast that the U.S. residential solar market to grow a “modest” 3% by the end of the year. Although the three larger residential solar companies will remain important, smaller local and regional players will continue to drive long-term growth, it said.

At a presentation during Tesla’s annual shareholder meeting last week, the company featured its solar and storage business in one out of 20 slides. Tesla’s energy generation and energy storage revenue fell 13% quarter-on-quarter, the company said in its first-quarter letter to investors. It promised “energy generation and storage revenue should increase significantly in 2019.”

Tesla unveiled its “solar roof,” glass roofing tiles that embed solar cells and look similar to roofing materials, three years ago. It said it plans to offer financing in the U.S. for the product this year.

Tesla bought SolarCity Corp., then the largest U.S. home-solar-panel installer, in June 2016 for $2.6 billion. Tesla Chief Executive Elon Musk was then chairman and largest shareholder of both companies, and SolarCity was founded and run by Musk’s cousins.

/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 261.41
+3.52 +1.36%
Volume: 2.82M
Oct. 16, 2019 11:15a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$46.20 billion
Rev. per Employee
$439,627
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/zigman2/quotes/202100570/composite
US : U.S.: NYSE
$ 6.80
-0.17 -2.37%
Volume: 219,402
Oct. 16, 2019 11:14a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$846.47 million
Rev. per Employee
$114,210
loading...
/zigman2/quotes/205021014/composite
US : U.S.: Nasdaq
$ 17.16
-0.05 -0.32%
Volume: 226,612
Oct. 16, 2019 11:15a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.02 billion
Rev. per Employee
$172,723
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Claudia Assis is a San Francisco-based reporter for MarketWatch. Follow her on Twitter @ClaudiaAssisMW.

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