Tesla unveils its newest energy product – a rooftop solar panel

Tesla is rededicating itself to rooftop solar, a decade after it bought the then-leading company in that sector, SolarCity.

The pioneering electric car maker has continued to sell rooftop solar through its energy division since the SolarCity acquisition. But the Solar Roof product — essentially roof tiles that generate energy and which was touted in 2016 as a reason for investors to approve the acquisition — never achieved the pacesetting status that Tesla’s Powerwall did for home storage or its Megapack did for large grid batteries.

On Thursday, a day after reporting year-end earnings for 2025, Tesla unveiled its newest energy product during an event at the company’s retrofuturist Tesla Diner in Los Angeles. And the buzzy new item is, in fact, a rooftop solar panel, launched at a tumultuous moment for both Tesla and the residential solar market.

“This is the first time that we’ve actually fully designed and manufactured our own solar panel, aside from everything that we’ve been doing on the Solar Roof,” said Colby Hastings, who runs the residential energy business at Tesla Energy. ​“This is available now. This is very real-world.”

Tesla has already begun manufacturing the new panel at its factory in Buffalo, New York, where it built a line capable of more than 300 megawatts of annual production, with room to grow, Hastings said. Tesla also assembles the Solar Roof at that location.

The new design offers ​“superior aesthetics,” Hastings said, thanks to its low-profile, all-black appearance, with no visible bus ribbon needed to conduct electricity from the cells. Tesla also leaned on its dataset of 500,000 solar installations performed by its in-house teams, Hastings said, to streamline the parts needed to secure the modules to a roof. For instance, the new panel cuts out the rail architecture typically used to fasten panels.

“We’re always looking for ways to eliminate unnecessary pieces and improve time,” Hastings said.

On Wednesday, Tesla reported a drop in revenue (its first full-year revenue drop), vehicle deliveries, and gross profit for the full year 2025. Perhaps the company’s most surprising announcement, though, was that it plans to scrap production of its Model S and Model X cars and instead use those factories to manufacture bipedal automatons. (The solar panels, however, will still be ​“proudly made on Earth by humans,” per company materials.)

While Tesla’s core business suffered last year, its energy division shone brightly — as automotive revenues fell by 10% for the year, ​“energy generation and storage revenue” grew by 27%, though the division still makes far less money than its core business. The company deployed an immense 46.7 gigawatt-hours of storage in 2025, more than 10 times the rate just four years prior. But while Tesla freely discloses battery capacity delivered by its generation and storage business, it does not share solar capacity deployed, making it hard to gauge the significance of solar relative to energy storage.

As with Tesla’s vehicle sales, the rooftop solar market is experiencing a downturn. First California, the biggest residential market by far, overhauled the rules for solar compensation in a way that crushed sales. Then the Republican-backed budget law ended the federal tax credit for households that buy their own rooftop solar systems. However, that law kept a tax credit for systems leased by third parties.

Tesla launched a lease offer last year to monetize those remaining tax credits; customers can choose to buy out their systems after five years. As a U.S.-based domestic manufacturer, the company also should be able to claim the advanced manufacturing production credit (45X) for its production in Buffalo.

So in spite of the market turbulence, Tesla can still avail itself of supportive federal policies even though the budget law passed — over the protestations of CEO Elon Musk. But Tesla is far from alone in making solar panels in America these days: It will be competing against the likes of Qcells, the most prolific manufacturer of residential panels in the U.S., which operates more than 8 gigawatts of module capacity, compared with Tesla’s 300 megawatts.

Scale matters in this industry. Lacking that, Tesla does have an advantage: its connected ecosystem of home energy products.

“To my knowledge, we’re the only manufacturer out there that’s directly producing electric vehicles, charging, storage, mounting hardware, solar panels, all of the controls that you can use to integrate these devices and make them work together for your home, and one app to have that full experience in,” Hastings said.

That could be enough to carve out a profitable niche in what’s left of the U.S. rooftop solar market in the second Trump administration.