Solar Flare: Tesla’s Price Hike leads to spotting among customers

Became a Tesla Energy customer after seeing Jeanne Frack, an electrician and skydiving instructor who lives outside Rockford, IL A video of snow spins one of the company’s new solar roofs spontaneously. This was just proof that he was looking for Tesla’s innovative glass roof tiles to work with embedded solar cells in icy climates as they do in sunny parts of the country like California.

“It was impressive,” said 50-year-old Frakes. The Reporter Door.

His excitement immediately faded after receiving an email from Tesla, stating that the original estimate for the 10.58kW project would increase from $ 53,764 to $ 53,649 – a jump of 54 percent.

“It feels so wrong that I could hardly believe it,” Frakes said.

The Frax was not only a left-sun kissed by the huge price increase of Tesla. In early April, customers began waiting for the installation of their Tesla solar roofs to give notice that their prices would sometimes go up by 100 percent. The Reporter Door Talked to 11 Tesla Solar Roof customers around the country who have canceled or are considering canceling their orders. They are commending each other in chat groups, broadcasting their complaints online, and starting petitions to raise awareness of the issue. Some are also considering filing a class action lawsuit against Musk’s company.

Tesla offers two solar products: traditional solar panels, which are installed on the customer’s existing roof; And the solar roof, which replaces current roof slats with those capable of soaking up the sun’s rays and converting it into energy. The solar roof is designed to fit the style of each home, like asphalt, slate and Spanish barrel tile.

It would later be known that the company underestimated the complexity of some roofs. Tesla CEO Elon Musk said in an earnings call on April 26, saying how the company had calculated the cost of installing “significant mistakes”. Tesla tried to shock some aggrieved customers by giving them free Powerwall home batteries upon renewing their order.

But this may not work. Even before the price went up, solar rooftop customers were filing lawsuits claiming that Tesla had never destroyed its credit rating by requesting a loan. The price increase is the latest self-inflicted wound that has caused Tesla’s once-hit solar business, which was originally acquired in 2015, to lose market share as more companies become involved and the price of solar nationwide It is done.

In early March, everything was going well for Amrit Kadar, OB-GYN from East Greenwich, RI and a solar rooftop project. He took out two loans and started paying premiums. And he had obtained the necessary permits from his utility company and local townships. Kader, owner of the Tester Model Y, was excited about adding another Tesla product to his lifestyle.

But a few days before the project began, he received word from Tesla that it would be rescheduled in late April. After that, he was told that his project would be delayed indefinitely due to the company’s inability to secure an installation crew in Rhode Island. After some back-and-forth, Tesla informed Kadar that it would increase its price by $ 3,000, or 30 percent.

Kadar was imposed. He filed a complaint with the state’s Attorney General’s Consumer Division, accusing Tesla of “abandoning the contract, extortion and willful misleading and misinformation.” He is in talks with a lawyer about filing a lawsuit against the company, and hopes to suspend or revoke Tesla’s license in his state.

As his own command, Kader’s initial reaction was to dig in his heels. “I did not cancel my signed contract and made it clear that I am not canceling,” he said. But eventually he decided that it was not worth the effort and informed Tesla that he would not go ahead with the project. And he started shopping for other cheap solar roof products.

“Honestly, I would not trust them to install their roof, even if they would honor the original contract,” he said. But the Model Y in its driveway serves as a constant reminder of the entire debacle.

“It definitely made me feel that I took no pride in riding my Tesla car,” Kader admitted, “[and] Advertise for them. “

On paper, Tesla’s energy division is booming. The company said it installed 92 mega-watts (MW) of solar power in the first quarter of 2021, more than double the first quarter of 2020 – its strongest quarter in two-and-a-half years. Tesla generated $ 494 million in sales on its solar roofs, including storage products such as powerwall batteries. For all of 2020, Tesla installed 205 MW of solar power compared to 2019, an 18 percent increase.

Musk claimed in an earnings call that Tesla’s demand for solar roofs “remains strong.” But overall, the division is unprofitable and the company has moved away from the largest rooftop solar installer in the US in recent years, falling behind San Francisco-based Sunroon.

Tesla’s solar ambitions date back to 2015, when it acquired SolarCity, a company owned by Musk’s cousin. A year later, Musk previously unveiled the solar roof set of desperate Housewives, Claiming that the roofs would look “nicer or better” than traditional roofs.

But from the beginning the deal proved to be a thorn in Musk’s favor. Critics called it a “bailout” of the struggling SolarCity, which had accumulated huge amounts of debt over the years. Several Tesla shareholders sued Musk over the deal, alleging that they overvalued SolarCity and did not recover themselves from the deal. Tesla’s board of directors settled the lawsuit Without Musk last year, the CEO was left the lone defendant in the case.

Its share has also been seen in the market slip. Tesla lags far behind Sunroon, the largest installer of solar panels in the US. Wesbush’s Dan Ives said it lagged far behind, with Wall Street analysts not paying attention to the company’s Department of Energy report.

“Street doesn’t really provide a value for Tesla’s solar business,” Ives said, “because it is relatively unproven until now.”

Tewla has really focused on solar over the years, “it’s choppy, to say the least”. This is amidst competition, pricing and execution issues. I think they have gained some upward momentum over the last nine to 12 months, but it is definitely more of a black look at the overall Tesla story. “

Seth Blumsack, professor of energy and environmental economics at Penn State, said Tesla’s decision to raise prices on its Solar Roof customers also flies because of a falling price trend for solar installations. The price of traditional solar panels that are installed above a customer’s roof – which is different from Tesla’s solar roof – has gone down 90 percent in the last decade.

“The pace of these cost declines is still beyond what many experts had even predicted,” he said.

According to the Solar Energy Industry Association, installations are gaining momentum, where they are about 13 times higher than they were a decade ago.

Blumstack said it is not unheard of for energy companies trying to bring new technology to market to underestimate initial costs. If enough customers “bite the bullet” and decide to absorb the cost increase, it could send a signal to Tesla’s competitors about which direction this technology is heading.

“It will be interesting to see if they can start running the cost of solar roofs in the same way that we have seen the cost of traditional solar panels fall.”

A Tesla spokesman did not respond to a request for comment, which terminated the company’s own public relations division and did not respond to a request to comment on the company for more than a year.

Texas resident Wissam Mehio is not among the customers who are ready to “bite the bullet”. He immediately canceled his order after being informed by Tesla that it would be priced at $ 104,000 from the previous estimate of $ 69,000.

“Tesla was very happy to let me go, my $ 100 [deposit] My credit card was returned less than 24 hours later, ”she laughed.

It was particularly disappointing how Mahio began to tell friends about his new “beautiful solar roof” how proud he was. He also expected a slight price increase, and budgeted an additional $ 5,000–10,000 for it, noting that Tesla stated that the price it had given him was an estimate and likely once an onsite valuation. Will change after But Messio said he slammed him with a 50 percent increase before coming for an onsite evaluation.

He said, “With such a move, I think Tesla Energy wants to change from ‘solar to everybody’ solar to ‘solar’.” No hard feelings, but I’m out. “