Tesla’s solar power generation installations are decreasing, but the battery business is doing well

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Tesla’s once-leading solar power business is in decline, according to the latest numbers from Tesla’s fourth-quarter 2023 earnings report.

Tesla’s solar installations totaled 223 megawatts (MW) last year, up 36% from 348 megawatts (MW) in 2022. Tesla’s contraction comes as the U.S. overall had a record year, although high interest rates slowed solar power growth in some markets. According to estimates by the solar power industry association SEIA, the United States will add 33 gigawatts of solar power capacity in 2023.

This year has been a bad year for Tesla solar, the worst year since 2020. But zooming in, the final quarter of 2023 looks even worse. In Q4 2023, Tesla’s solar installed capacity was 41 MW, down 59% year over year from 100 MW in Q4 2022.

But Tesla’s power generation and storage business is doing relatively well (surprise, surprise). The company announced that energy storage deployments in 2023, including Powerwall home batteries and utility-scale Megapacks, exceeded 14,724 megawatt hours (MWh), an increase of 125% from the previous year.

Tesla has commented that energy deployments are expected to fluctuate somewhat from quarter to quarter, and the company’s fourth quarter results reflect this. The automaker installed 3,202 MWh in the fourth quarter of 2023. This was a decrease compared to the previous three quarters, but an increase from the fourth quarter of 2022.