Tesla settles class-action Solar Roof lawsuit for $6 million

Tesla agreed to pay just over $6 million to settle a class-action lawsuit brought by customers who faced sudden Solar Roof price hikes in 2021 after agreeing to have the systems installed at their homes.

The Tesla Solar Roof was formerly known as Tesla “solarglass.” CEO Elon Musk first promoted the system in 2016 as an architecturally appealing roofing product that would generate energy and look just as good as the shingles on a home without solar panels. The glassy, solar roof tile he held up at a presentation for shareholders, while touting Tesla’s then-planned acquisition of SolarCity, was later revealed to be a prop and not a working prototype.

As CNBC previously reported, Tesla Solar Roof customers had signed contracts with the company and prepared to have the systems installed at their homes, when they were surprised by sudden price increases in 2021 that required higher payments to move ahead with their installations.

The price hikes were no small change. A lead plaintiff in the class action, Matthew Amans, saw his solar roof price increase from around $72,000 in his original contract to around $146,000 per court filings.

Tesla hiked prices for its solar installations at least twice that year, and made it a requirement for customers ordering solar panels or roof tiles to order the Powerwall home energy storage system as well. 

According to the amended class-action settlement agreement, filed with a U.S. District Court in San Francisco on July 10, 2023, as of the end of June this year, approximately 8,636 Tesla customers were part of the group affected by the price hikes, and the surprise of the changing costs and terms for customers resulted in just over 6,300 canceling their Solar Roof contracts with Tesla Energy.

Tesla completed 1,656 Solar Roof contracts at the original price quoted to customers, according to the filing, with another 57 customers slated for Solar Roof installations at the original price as of the end of June. The remaining customers who have not yet canceled or booked installations at the original price amounted to 616 people.

Wood Mackenzie estimated that, as of the start of 2023, Tesla had only installed 3,000 of its Solar Roof systems in the U.S. since touting the technology seven years prior.

In its energy segment, Tesla’s overall solar deployments (including both traditional solar panels and the roof tiles) dropped by nearly half to 48 MW in the first quarter of 2022 versus the same time in 2021.
Tesla had said the declines in solar deployments at that time were caused by import delays on certain components that were beyond the company’s control.

By the first quarter of 2023, Tesla’s overall solar deployments amounted to 67 MW, representing 40% year-over-year growth. At the same time, Tesla’s growth in energy storage systems soared 360% in the first quarter of 2023 from a year earlier, illustrating that its home- and utility-scale backup batteries, far more than solar installations, are driving Tesla’s Energy division revenue.

The national average cost for a 10-kilowatt solar panel installation in 2022 was around $20,000 after taking into account federal solar tax credits, according to EnergySage, a marketplace that connects energy companies and customers.

Read the full settlement terms from the class-action lawsuit (Amans v. Tesla, Inc. 3:21-cv-03577) here:

Correction: This story has been updated to reflect Tesla’s correct solar deployment totals in the first quarter of 2022 and 2023, respectively.