Tesla Brings Back Solar Panel Leasing In 6 States

Electric carmaker Tesla Inc TSLA announced a sales initiative Monday to boost its home solar panel business, which was born out of the 2016 acquisition of its cousin company SolarCity.

What Happened

Tesla introduced a new leasing option where consumers can rent solar panels starting at $50 a month with no upfront cost and no long-term contract.

The smallest option includes a platform that can generate up to 19 kilowatt-hours of power on average daily in a sunny state like California. In less sunny states like New Jersey, the smallest option can generate up to 14 kilowatt-hours.

Tesla's home solar business has shown clear signs of slumping since 2017, The Wall Street Journal reported. In 2017, the total megawatts deployed across residential and commercial clients fell by 38% year-over-year.

Most recently, Tesla acknowledged in a letter to shareholders in the first quarter of 2019 that its solar business isn't properly positioned to take full advantage of demand.

Why It's Important

Tesla and competing solar panel companies' prior ambitions in leasing products failed to gain any traction, according to WSJ. Companies aggressively promoted deals to lease panels for little to no money down, and their bottom line was impacted.

Tesla is now making a fresh bet that electricity prices will move higher to the point where many consumers will want to cancel their traditional power supplier and embrace a Tesla solar panel, Roth Capital Partners analyst Philip Shen told WSJ.