Tesla eliminates “soft costs” to bring down solar panel installation and cut down costs.
The company intends to bring down panel prices by almost 38 percent, says Senior Vice President Sanjay Shah from Tesla. By this, the company hopes to regain its market share in the solar sector.
Tesla has slashed prices after it slid to the third position as a rooftop solar company. To stay in the competition, it is looking for ways to bring down its price. Customers can now pay $1.75 to $1.99 for a watt. The price depends on the location they live in.
Shah says that by standardizing its installations and making the home installation process easier, price reductions will become feasible.
The National Renewable Energy Laboratory (NREL) has said that Tesla has reduced soft costs to reduce residential solar panel prices. Soft costs are those costs that do not relate to the solar panel’s physical construction.
Tesla bought SolarCity in 2016. It cut costs in various ways such as bringing down marketing cost and cutting sales expenses. It slowly lost its market share too, to its competitors SunRun and Vivint Solar.
Tesla has been reducing costs for quite some time in the solar energy product division to restructure SolarCity. In November, it reduced prices in household solar panel installation to increase sales. The company hopes to become a one-stop shop for all products related to energy, such as battery packs, roof tiles, and cars.
In the second half of 2019, Shah expects to pull up sales in the solar roof. This will help to bring up profits in the company by the second half of 2019.
The company has posted a loss of $702 million in the last quarter. With lower sales of its cars and challenges in delivering them, profits have decreased, says CEO Elon Musk. The loss will continue to the second quarter after which it will become profitable, he says.