Silevo, the California solar panel manufacturer that is one of two companies slated to move into the RiverBend clean technology hub in South Buffalo, is being acquired by SolarCity, a leading solar energy systems installer.
The $200 million deal would make SolarCity the most valuable U.S. solar company and extend its operations into the production of solar panels.
SolarCity executives, in a blog post announcing the deal this morning, expressed interest in continuing with Silevo’s plans to build a solar panel manufacturing plant in Buffalo – and possibly expanding it to become one of the world’s largest solar panel production facilities.
The RiverBend hub is part of Gov. Andrew Cuomo’s ‘Buffalo Billion’ economic development initiatives.
“We are in discussions with the state of New York to build the initial manufacturing plant, continuing a relationship developed by the Silevo team,” the company said in the post.
SolarCity is led by technology entrepreneur Elon Musk, who also heads the Tesla electric automobile company.
That initial plant at RiverBend was envisioned to have the annual capacity to produce enough solar panels to generate 200 megawatts of electricity. But SolarCity executives said they were interested in expanding the capacity of that plant to be five times bigger than the original plan.
“At a targeted capacity greater than 1 gigawatt within the next two years, it will be one of the single largest solar panel production plants in the world. This will be followed in subsequent years by one or more significantly larger plants at an order of magnitude greater annual production capacity,” SolarCity said.
SolarCity executives said they view the Silevo acquisition as a key step in their efforts to reduce the price of solar energy systems to the point where they can compete with electricity generated from fossil fuels without the lucrative subsidies that now are needed to offset the higher costs of solar panels.
By combining Silevo’s technology, which is more efficient at generating electricity than most other solar panels on the market today, with lower production costs from the economies of scale that come from high-volume production, SolarCity executives said they believe they can make solar systems more affordable.
“What we are trying to address is not the lay of the land today, where there are indeed too many suppliers, most of whom are producing relatively low photonic efficiency solar cells at uncompelling costs, but how we see the future developing,” the blog post said.
“Without decisive action to lay the groundwork today, the massive volume of affordable, high efficiency panels needed for unsubsidized solar power to outcompete fossil fuel grid power simply will not be there when it is needed,” said the post.
Under the terms of the deal, the acquisition price could rise to as much as $350 million if Silevo hits certain performance targets, which are based on volume and costs.