Tesla is increasing solar prices as supply chain costs are rising

After achieving the best prices in the solar industry, Tesla has significantly increased solar panel installation prices as supply chain costs are causing pressure on the whole solar industry.

Last year, solar rooftop installations saw their first increase in price since 2014. While deployment increased, Solar Energy Industries Association said that supply chain constraints pushed solar prices 18% higher in the US.

Tesla had recently achieved the lowest prices in the industry in 2020 with several updates to its solar panel business, including a new price match policy. At the time, the company was claiming a price of just $1.96 per watt.

The prices have crept up over the last year, but several potential buyers have notified us of a big price increase that appears to have been adopted by Tesla over the last week.

Pricing a system in Southern California, right now, results in a price of $2.31 per watt:

When I priced the same system for the same location last year, I got a price per watt of $1.98 per watt, which is consistent with the rest of the industry having to raise prices, too.

In 2021, Tesla’s solar deployment grew significantly (68%) for the first time in years; the company deployed 345 MW last year. This number includes both solar panel installations and solar roofs, which also saw an important increase in price last year.

Tesla had big plans to significantly accelerate solar deployment, and while it increased last year, the magnitude that Tesla has been trying to achieve hasn’t materialized yet. CEO Elon Musk said that he expects Tesla’s energy business to grow as big or bigger than its automotive business.

Aside from the price increase, the supply chain issues are also affecting the actual availability of materials. We previously reported that Tesla has started to delay solar installations because of supply issues.

While Tesla ended its referral program for cars last year, the program remained for its solar roof and even increased its referral award to $500 – showing that the company is actively trying to secure more solar customers.