US SEC Investigating Tesla Solar Panels


Following a whistleblower complaint, the U.S. Consumer Product Safety Commission and U.S. Securities and Exchange Commission have launched an investigation into Tesla regarding the company’s solar panels.

According to reports, defects in the solar panels have been linked to fire risks, which could affect more than 60,000 residential customers and 500 commercial or government customers.

Tesla’s Solar History

The company first announced that it was entering the solar market at the end of 2016, opening preorders for rooftop solar photovoltaic systems in May 2017.

That system used a mix of regular and solar shingles featuring solar-collecting tiles—not panels—in two tile styles.

At that time Tesla began taking $1,000 deposits for the tiles, which the company said cost roughly $21.85 per square foot. The solar roof system was supposed to debut in the United States that year and expand to other countries in 2018; however, the launch of the Solar Roof V3 didn’t occur until 2019, and Tesla canceled many of the preorders.

As systems finally began being installed in 2019, the company also started renting out solar panel rooftop systems. In addition to delays and changing business models, two lawsuits were filed near the end of 2019 against Tesla regarding solar panels.

The first lawsuit highlighted that SolarCity, the 2016 acquisition that made Tesla's solar business possible, was in financial trouble at the time and that Musk knew about the financial trouble. The other came from Walmart, which sued Tesla because of solar panels that reportedly went up in flames over several rooftops.

In summer 2020, Tesla rolled out the online order form that it originally said would cut costs for consumers by one third.

By the end of that year, Mississippi Power and Southern Power announced a partnership to build a “smart neighborhood.” Dubbed “Enzor Place,” the homes exclusively feature the Tesla Solar Roof as well as Powerwall batteries, energy efficient equipment and appliances, and smart home automation.

In May, however, Tesla Musk admitted to “significant mistakes” in its solar roof project rollout, nodding to recent cost hikes and changes during the company’s first-quarter earnings report meeting. At the time, Tesla reported $494 million in sales in its energy generation and storage sector, however, the segment is still reportedly not profitable.

To mitigate some of the issues, Musk reported that Tesla would only sell its solar panel products paired with the Powerall battery, rather than selling everything separately—a move Musk thought would help to streamline the process and costs.

Whistleblowing & Solar Hazards

While Tesla has long been pushing to be apart of the solar market, in 2019 a whistleblower complaint about the company accused its officials of failing to properly disclose the potential injury or property damage that could result from panel defects after it acquired solar developer SolarCity.

In his complaint, former field quality manager Steven Henkes also stated that he had been fired after raising concerns over safety. Since the complaint, it has been reported that a SEC investigation was launched into the solar panel products and their potential fire risks.

The investigation was disclosed as a part of a Freedom of Information Act request by Henkes. Reports have indicated that Henkes is also suing Tesla, alleging retaliation. A lawsuit was officially filed in November 2020 in Alameda County, California.

According to Raymond James analyst, Pavel Malchanov, the overall impact of the investigation could remain small, in that SolarCity is just a small portion of Tesla’s overall clean energy and automotive operations.

“If such an investigation were to apply to SolarCity individually, it would be potentially a big deal. But what remains of SolarCity represents a meaninglessly small part of Tesla’s business,” Molchanov said. “It may be that this investigation will spur Tesla executives to invest even less resources in the solar business, but regardless, it is immaterial for the overall company.”

Additionally, Greg Sellers, CEO of a solar maintenance and repairs business in Morgan Hill, has gone on record to report that the risk of fires is still very low in solar photovoltaics, whether home or larger-scale systems. Sellers field observations have also been backed by research by the Fraunhofer Institute for Solar Energy Systems.

“For those of us in the repair and safety side, any incident is too many. Fires are still very rare. That’s why they get so much publicity when they do happen,” he said. Sellers further explained that fires on solar panels would be more likely to be caused by a failed installation practice than a component failure.

Regardless, it has been confirmed by Henkes’ lawyer that the former employee had been interviewed by the U.S. Consumer Product Safety Commission and had submitted the following items in a CP-15 complaint:

  • Failure analysis reports from a third-party engineering firm;
  • Internal meeting minutes, reports and emails;
  • Customer notification examples;
  • Photos of thermal events linked to customer houses; and
  • Meeting minutes and presentations pertaining to a supplier named Amphenol and Tesla.

According to CNBC News, a second former Tesla solar employee, who asked to remain unnamed because he still works in the solar industry, corroborated many of Henkes’ claims from the public lawsuit.


Tagged categories: Good Technical Practice; Health & Safety; Health and safety; Lawsuits; NA; North America; Safety; Solar; Solar energy; Technology

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