A solar panel is displayed on a wall near the signage at the entrance to Tesla Inc.’s new showroom in New York.
Mark Kauzlarich | Bloomberg | Getty Images
A U.S. federal agency is considering evidence of a former Tesla employee’s complaint about how the company managed and communicated about fire hazards and defects in its solar facilities, CNBC learned from documents received through an application. of the Freedom of Information Act.
The U.S. Consumer Products Safety Commission is conducting an investigation and also interviewed the former Tesla employee who filed the complaint in the spring of 2019, Steven Henkes, who was then Tesla’s solar field quality manager.
CNBC learned of the investigation by asking the CPSC for a complete copy of the whistleblower’s complaint. The agency declined to provide the full complaint, but revealed: “The records we are withholding are related to an open investigation and consist of internal and external reports.” The precise scope and focus of the investigation are not known at this time.
Henkes is also suing Tesla, alleging retaliation.
In a lawsuit filed in Alameda County in November 2020, Henkes said he was fired from his job at Tesla on August 3, 2020, after raising security concerns internally and filing formal complaints with government offices when Tesla failed to take action to repair and accurately communicate with customers about what he said were unacceptable fire hazards on the company’s solar facilities.
Henkes declined to speak directly to CNBC, but answered some questions via email through his lawyer, Robert Wallace. Henkes believes that “there remains a real fire threat due to serial defects at Tesla facilities,” said a statement from Wallace. “Consumers have not been properly informed about the risks”.
Tesla entered the solar business in late 2016, when it acquired SolarCity for $ 2.6 billion. Among other things, Tesla Energy installs photovoltaic, terrestrial and garage solar energy systems.
Tesla does not share revenue from solar energy on its own. “Energy generation and storage” accounted for only 6% of the company’s total revenue in 2020, but grew 30% compared to last year, according to its year-end financial report. In a January 27 earnings conference call, Musk told analysts: “We are putting a lot of attention on solar energy and it is growing rapidly. So I think it will not be long before Tesla is by far the market leader in solar energy. . “
Tesla systems were installed in homes, including military housing units in Fort Bliss and other bases, schools in the Los Angeles unified school district, and commercial facilities, including Walmart stores and Amazon warehouses.
As CNBC previously reported, Tesla’s solar facilities have previously caught fire. In August 2019, Walmart sued Tesla for negligence after the solar roof systems installed by Tesla Energy were triggered at several Walmart locations.
In lawsuits, Walmart said Tesla failed to properly monitor, repair and maintain these systems, even after the fires occurred. The fires caused significant damage and defective systems posed serious risks to employees, customers and companies, according to Walmart’s complaint at the time.
On November 5, 2019, the companies issued a joint statement saying that they expected “a safe re-energizing of our sustainable energy systems”. The exact terms of the companies’ agreement – and costs for Tesla – were never disclosed. A spokesman for Walmart pointed to a subsequent statement in January 2020, which noted: “Part of that work may include replacing certain solar equipment.”
Tesla did not immediately respond to a request for comment.
The risk of fires is still very low in solar photovoltaic power, whether in home systems or on a large scale, according to Greg Sellers, CEO of a solar maintenance and repair company in Morgan Hill, California. The research by the Fraunhofer Institute for Solar Energy Systems supports its field observation.
Without specifically commenting on Tesla, Sellers explained: “For those of us on the repair and safety side, any incident is too much. Fires are still very rare. That’s why they get so much publicity when they happen.” He said that a fire is generally more likely to be caused by a failed installation practice than by a component failure. And he said that solar installers have become increasingly better as these systems proliferate.
Public security concern
CNBC asked the CPSC – a federal agency charged with “protecting consumers of products that pose a fire, electrical, chemical or mechanical risk” – a copy of Henkes’ complete complaint after it was referenced in his lawsuit in the fourth quarter of 2020.
The director of the CPSC’s Freedom of Information Act, Abioye Ella Mosheim, declined, citing an exemption for records related to an open investigation. She wrote, “The records you requested are from the Office of Compliance and Field Investigation of the active law enforcement investigation files.”
Henkes, through his lawyer, Wallace, confirmed that the CPSC interviewed Henkes and asked the former Tesla employee to submit additional materials to the agency. The items that Henkes presented to the feds in a “CP-15” complaint included:
· Fault analysis reports from a third-party engineering company
· Minutes of internal meetings, reports and emails
· Customer notification examples
· Photos of thermal events linked to customers’ homes
· Minutes of meetings and presentations related to a supplier called Amphenol and Tesla
Henkes wants Tesla to “rethink its clarity with the client,” said his lawyer on his behalf. The former employee was working on implementing “a permanent countermeasure” for the problems he encountered before he was fired, the lawyer added. However, Henkes claims that he was “continually frustrated and then fired for continuing to work on behalf of public security” at the end of his tenure at Tesla.
Another former Tesla solar employee, who asked not to be named because he still works in the solar industry, corroborated many of Henkes’ claims in the public case.
In particular, that person said that many of Tesla’s solar system installations, especially those including certain roof rack components and Amphenol H4 connectors, pose a significant fire risk and that Tesla’s remediation or modification efforts were not transparent or effective. The person also said that the company has not yet repaired or removed all systems with known fire hazards.
Tesla used to outsource remediation and maintenance efforts to its aging solar fleet, but is now canceling at least some of these contracts and bringing the process back home, according to this former employee.