Tesla discontinues Solar Roof tiles after years of low sales

Tesla has discontinued its Solar Roof product, a solar-tile roofing system it first unveiled in 2016, with the company reportedly concluding the product is not financially viable [1, 2]. The move formalizes a retreat that has been visible for years, as Tesla stopped reporting Solar Roof deployment figures in early 2024 and removed the product from its marketing [1].

Economic challenges and missed targets

Tesla informed third-party installers it would no longer supply solar roof tiles, opting instead to provide only conventional solar panels [1, 2]. The company's dedicated Solar Roof webpage now redirects to its solar panels page, and "Solar Roof" has been removed from the Energy navigation menu, which now lists only Solar Panels, Powerwall, and Megapack [1, 3].

The Solar Roof was central to the pitch for Tesla's roughly $2.6 billion acquisition of SolarCity in 2016 [1]. However, the product's installed prices came in significantly higher than initial quotes of around $22 per square foot, leading to a class-action lawsuit in 2023 that Tesla settled for $6 million [1]. One customer's contracted price reportedly jumped from about $72,000 to roughly $146,000 before installation [1].

Volume targets were also consistently missed. CEO Elon Musk repeatedly stated Tesla aimed to produce and install 1,000 Solar Roofs per week by late 2019 and early 2020 [1]. However, Wood Mackenzie data indicates that at its peak, Tesla was installing approximately 21 to 32 Solar Roofs per week, falling more than 95% short of its goal [1]. In total, the firm estimated Tesla installed only about 3,000 Solar Roof systems in the US over roughly seven years [1, 2].

Pivot to conventional solar

The discontinuation completes Tesla's pivot towards conventional rooftop solar paired with its Powerwall battery storage [1]. Earlier this year, Tesla introduced new 420-watt solar panels manufactured at Giga New York, featuring a 20.5% module efficiency and a low-profile design [3]. The company is also reportedly planning a new $10 billion factory near Houston, Texas, to increase solar panel production [2].

The Solar Roof's manufacturing complexity, labor-intensive installation, and shading limitations contributed to its economic unviability, making it primarily suitable for expensive homes where buyers were not price-sensitive [1].

What to watch

• Monitoring Tesla's progress on its plans for large-scale US solar panel manufacturing, as discussed by Elon Musk [1].
• The performance and market adoption of Tesla's new 420-watt solar panels, which offer 20.5% module efficiency [3].
• How competing solar shingle options from other manufacturers fare in the market following Tesla's exit from the integrated solar roof tile segment [1].

The discontinuation highlights the challenges of scaling integrated solar roofing solutions, despite the initial appeal of the concept for new construction or roof replacements [1].