
Walmart alleges Tesla's solar panels started fires at seven of its stores, including this one in Indio, Calif. Source: State of New York |
Adding to the woes of Tesla Inc.'s faltering solar business, retail giant Walmart Inc. is suing Tesla Energy Operations, Inc over a series of fires that erupted on the rooftops of several stores across the country, allegedly sparked by shoddy solar arrays installed by SolarCity Corp., which the Silicon Valley electric vehicle and battery developer acquired in 2016.
In a lawsuit filed Aug. 20 in the state of New York, Walmart described its move as a "breach of contract action arising from years of gross negligence and failure to live up to industry standards by Tesla," which had committed to operate the systems "safely on the roofs of hundreds of Walmart stores."
The complaint came two days after Tesla CEO Elon Musk announced on Twitter that the company had relaunched its solar business with a new rental strategy, and as Tesla tries to douse fire safety concerns related to lithium-ion battery systems following a spate of recent fires not involving its own installations.
Walmart alleges that arrays Tesla inherited from SolarCity ignited fires at seven stores in California, Maryland and Ohio between 2012 and 2018, causing millions of dollars in damages. Fearing for the safety of its customers and worried over potential additional damages and store closures, the big-box retailer demanded in May 2018 that Tesla disconnect all of the roughly 240 systems SolarCity had installed. Tesla complied, disconnecting its entire fleet of Walmart solar projects, according to the complaint.
Shutting off the projects did not, however, prevent a fire on the roof of a store in Yuba City, Calif., in November 2018, caused by live wires, the suit alleges. Walmart asked the court to require Tesla to remove all of its solar panels from the retailer's locations and to award damages in connection to the fires.
'Rushed, negligent approach'
"Many of the problems stemmed from a rushed, negligent approach to the systems' installation," Walmart said in the suit, citing an "ill-considered business model that required it to install solar panel systems haphazardly and as quickly as possible in order to turn a profit." Contractors and subcontractors who installed the systems "had not been properly hired, trained, and supervised," the suit claimed.

Tesla has not provided Walmart with a root-cause analysis identifying precisely what triggered the fires, it added.
Tesla did not immediately respond to a request for comment on the allegations.
The company's solar division has seen installation volumes plummet since acquiring SolarCity, falling to just 29 MW in the second quarter of 2019, from 176 MW in the second quarter of 2017.
After shifting away from rooftop solar leases preferred by SolarCity, Tesla has sought to revive its solar business with a new roof-integrated solar tile, introduced more than two years ago. In April, Musk said the company was on "version 3" of the product, which Tesla plans to ramp up this year at a factory in Buffalo, N.Y.
