Tesla Energy Operations, Inc. is the sustainable energy division of Tesla, Inc. that develops, manufactures, sells and installs photovoltaic solar energy generation systems, battery energy storage products and other related products and services to residential, commercial and industrial customers. The division was founded on April 30, 2015, when Tesla CEO Elon Musk announced that the company would apply the battery technology it developed for electric cars to a home energy storage system called the Powerwall. In November 2016, Tesla acquired SolarCity, in a US$2.6 billion deal, and added solar energy generation to Tesla Energy's business. This deal was controversial; at the time of the acquisition, SolarCity was facing liquidity issues. The company's current power generation products include solar panels (manufactured by other companies for Tesla), the Tesla Solar Roof (a solar shingle system), and the Tesla Solar Inverter. The company also makes a large-scale energy storage system called the Megapack. Additionally, Tesla develops software to support its energy products. In 2023, the company deployed solar energy systems capable of generating 223 megawatts (MW), a decrease of 36% over 2022. In 2024, it deployed 31.4 gigawatt-hours (GWh) of battery energy storage products, an increase of 113% over 2023. The division generated $10.1 billion in revenue for the company in 2024, a 67% increase over 2023.
History
Tesla's expansion into battery energy storage
As Tesla, Inc. developed batteries for its electric car business, the company also started experimenting with using batteries for energy storage. Starting in 2012, Tesla installed prototype battery packs (later called the Powerpack) at the locations of a few industrial customers. In November 2013, Tesla announced that it would build Giga Nevada, a factory to produce lithium-ion batteries. The Tesla Energy brand was introduced on April 30, 2015, as CEO Elon Musk announced that the company would apply its battery technology to a home energy storage system called the Powerwall. Five hundred pilot units were built at the Tesla Fremont Factory in California and installed during 2015. The Giga Nevada factory started limited production of Powerwalls and Powerpacks in the first quarter of 2016 using battery cells produced elsewhere, and began mass production of cells in January 2017. This battery technology is not an innovation of what is available in the market but, according to Musk, the company offered a product that is easy to install, more attractive, less expensive and can also be easily maintained.
Tesla buys SolarCity Brothers Peter and Lyndon Rive, the cousins of Tesla CEO Elon Musk, founded SolarCity in 2006 to sell and install solar energy generation systems as well as other related products and services to residential, commercial and industrial customers. Musk suggested the solar company idea to the Rive brothers and he later served as the chairman of SolarCity. In June 2014, SolarCity committed to building a second factory, later called Giga New York, in Buffalo, New York, that would build photovoltaic cells and would be triple the size of the next largest photovoltaic manufacturing plant in the United States. By 2016, SolarCity had installed solar energy systems for over 325,000 customers and was one of the largest solar installation companies in the United States. On August 1, 2016, Tesla announced that it would be acquiring SolarCity in an all-stock $2.6 billion acquisition. Tesla's mission since its inception has been "to accelerate the world's transition to sustainable energy". Musk said the purchase would advance Tesla's mission by helping the world move from a mine-and-burn hydrocarbon economy towards a solar electric economy. The announcement cited (as benefits of the acquisition) operational and cost synergies, as well as allowing for integrated sales of products from Tesla's existing battery energy storage products division. The announcement of the deal resulted in a more than 10% drop in Tesla's stock price. The proposal for acquisition was approved by antitrust regulators in August 2016. More than 85% of unaffiliated shareholders of Tesla and SolarCity voted to approve the acquisition on November 17, allowing the deal to close on November 21, 2016.
Tesla Energy product roll-out Shortly after the acquisition announcement, Tesla announced that it would be building a new version of the Powerwall and also introduced the Tesla Solar Roof, a solar shingle product. Elon Musk presented the products using the homes on Colonial Street set on the Universal Studios backlot. The presentation was intended to gain investor support for the acquisition. These roof tiles were later revealed to be not "fully working". Members of the anti-Tesla group TSLAQ have cited Musk's fake solar roof tile reveal as a major point of contention and an impetus for organizing. The Solar Roof was to be made at the Giga New York factory, which opened in late August 2017 and would be operated as a joint venture with Panasonic. The factory was not able to start producing the shingles in volume until March 2020 and Panasonic left the joint venture in early 2020, before it exited the solar business entirely in January 2021. In mid-2017, several of the former SolarCity executives left the company. Chief policy officer John Wellinghoff departed in April 2017, co-founder Lyndon Rive left in June 2017, and his brother Peter left shortly thereafter.
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