Tesla Supercharger, Courtesy of Tesla Inc.

Tesla Energy: Brief Profit Analysis, Megapack & Powerwall Batteries, Solar Panels

As everyone knows, Tesla is particularly known for its high-tech electric cars, but its business doesn’t end there. The company led by Elon Musk has a subsidiary called “Tesla Energy” dedicated to the sale and installation of stationary batteries and solar PV panels, both for homes and for industrial applications; A company that currently operates in different parts of the world and the company earns a fraction of its income. But how much does this business actually yield to Tesla? Can you really make money?

Tesla calls it “energy generation and storage” in its books of accounts, and therefore it collects all products related to stationary batteries and solar PV. We are talking about Powerwall, Powerpack, Megapack, Solar PV Panels and Solar Tiles; A business that witnessed during the first quarter of 2022 lights and shadows for the company.

Lights and Shadows because each of the two parts of this work had very different results in the first quarter of the year. Starting with the bad news, solar installations are down 48% compared to the first quarter of last year. In the first three months of 2022, Tesla installed a total of 48 megawatts of photovoltaic panels, including all products in this group. According to the company, this reduction compared to the previous year is due to “delays in importing some solar components that we cannot control.”

Tesla offers two types of solar energy products: conventional solar photovoltaic panels, which can be installed in the home (on an already built roof) or in industrial applications; And the solar tile, which is installed at the time of building a new roof and almost goes unnoticed, as it looks just like black slate tiles.

Tesla Solar Panels, Courtesy of Tesla Inc.

Stationary batteries, on the other hand, have done well so far: The energy storage business increased 90% year-over-year, to 846 MWh installed in the first quarter of 2022. This significant growth has been driven by the strong deployment of domestic Powerwall units, according to For Tesla, although in this case supply chain issues played a limiting role. With demand continuing to far exceed capacity, growth has been limited by a lack of more key components. However, Tesla will increase production of stationary batteries to meet the increasing demand; Tesla uses LFP cells (nickel and cobalt free) in its stationary batteries, a technology also used in some of its electric cars.

Megapack, Courtesy of Tesla Inc.

Batteries for home installations (Powerwalls) have a capacity of 13.5 kWh and essentially provide 5 kWh of continuous power. However, depending on the needs of each customer, they can be installed in larger numbers. Next, Powerpacks are designed for industrial and commercial installations: they have a capacity of 232 kWh and deliver up to 130 kWh of power per battery. Finally, the largest stationary battery is the Megapack, which is intended to be used as a backup for large wind or solar farms: each Megapack has a capacity of 3 megawatt-hours. As we recently reported, Tesla has deployed 360 megawatt-hours of this type of battery in a solar park, one of its most recent projects.

Megapack, Courtesy of Tesla Inc.

Overall, Tesla Energy generated revenue of $616 million in the first quarter of 2022 from the stationary battery and photovoltaic business, an increase of 24.7% year-over-year compared to $494 million entered during the first quarter of 2021. However, the cost of revenue was 688 million dollars; Revenue cost is the total cost of producing and distributing any particular products or services; In other words: what it costs to manufacture and sell them. Then, by doing simple math, we can see that Tesla essentially lost $72 million in the stationary battery and solar panel business in the first quarter of 2022.

Model 3, courtesy of Tesla Inc.

On a percentage level, stationary power generation and storage equates to just 3.3% of Tesla’s total revenue ($18,756 million in Q1 2022). Of that total, $16,861 million goes to the electric vehicle business (Model 3, Model Y, Model S and X), which includes vehicle sales, rental income and CO2 regulation credits.

All images provided by Tesla Inc.

Nico Caballero is Vice President of Finance for Cogency Power, which specializes in solar energy. He also holds a diploma in electric vehicles from Delft University of Technology in the Netherlands, and enjoys doing research on Tesla and EV batteries. It can be accessed at Tweet embed on Twitter. Nikko covers the latest Tesla and electric car events at Torque News.

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