Solar Boom Ends Amid SolarCity Slowdown

Residential solar installations in the U.S. are expected to decline this year in the wake of Tesla's acquisition of SolarCity.
Matthew HellerDecember 15, 2017

After years of stellar growth, home solar installations are expected to fall for the first time this year, reflecting a slowdown at SolarCity in the wake of its acquisition by Tesla.

The residential solar market increased 19% in 2016 and more than 50% in the four years before that. But in a new report, GTM Research predicts the market will fall 13% in 2017.

In the third quarter, U.S. installation of residential solar fell 10%.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

GTM attributes the decline in part to SolarCity, which accounted for a quarter of the national market in 2016 and more than 30% the previous two years. By the third quarter of this year, its share had dropped to 14%.

“If SolarCity accounted for a 30 percent share of the national market and you cut those installation volumes effectively in half, that’s really what we are looking at in terms of the market downturn in 2017,” said Austin Perea, who tracks the U.S. residential solar market for GTM.

As Reuters reports, SolarCity has largely stopped its aggressive marketing campaigns and ambitious expansion since it was acquired by Tesla last year.

The company stopped selling installations door-to-door earlier this year, eliminating a major way it reached new customers, and now sells systems in its high-end retail stores, where cars and batteries are also sold.

“As a result, Tesla’s rooftop solar installations have fallen sharply each quarter this year compared to last,” Reuters said. “In the third quarter, installations were off by 42 percent over the previous year.”

Tesla expects its fourth-quarter solar installation numbers to be up on the third quarter but competitors have gained market share. Installations by Sunrun, the largest publicly held standalone residential installer, has gained market share this year, are expected to rise 15% in 2017.