SolarCity executives are sticking with their forecast that demand for its solar systems will continue to rise rapidly – the fundamental underpinning of its plan to open a massive solar panel factory in Buffalo.
The company’s installations doubled in the second quarter to 107 megawatts, and SolarCity said it expects installations to reach 500 megawatts to 550 megawatts this year. In 2015, it expects its installations to nearly double again, rising to 900 megawatts to 1 gigawatt, or 1,000 megawatts.
SolarCity executives also said Thursday they expect to close at the end of the month on the $350 million acquisition of Silevo, a California-based manufacturer of high-efficiency solar panels that already planned to open a solar module manufacturing plant in the RiverBend clean energy hub in South Buffalo.
After the deal was announced, SolarCity executives said they planned to expand the Buffalo factory to five times its original size, boosting its potential employment from 475 people under Silevo’s original plan to well over 1,000, because of its forecasts for rapidly rising demand.
Lyndon Rive, SolarCity’s chief executive officer, said the company is in “active negotiations” with state officials about an expanded incentive package for the Buffalo factory, which would be a key part of the installer’s efforts to reduce the cost of its solar energy systems.While the state had agreed to invest $225 million into the RiverBend complex, SolarCity’s plan to boost the capacity of the Buffalo factory from the 200 megawatts envisioned under Silevo to 1 gigawatt prompted SolarCity to seek additional incentives from the state.
Gov. Andrew M. Cuomo, who has made the RiverBend project the biggest single piece in his Buffalo Billion economic development initiative, said last week he was optimistic that the ongoing negotiations over an expanded incentive package would be successful.
The Buffalo factory would become SolarCity’s in-house source of the high-efficiency solar panels that the company believes it will need to meet the rapidly rising demand for rooftop solar energy systems.
SolarCity executives believe they can reduce costs by using Silevo’s panels, which can convert about 21 percent of the sun’s energy into electricity, compared with about 18 percent for conventional panels. That increased efficiency would cut costs because SolarCity would need fewer panels and less mounting and installation equipment to generate the same amount of electricity.
“We are super excited about the acquisition and what it can do to reduce our installed costs,” Rive said.
A Buffalo factory also would allow SolarCity to avoid tariffs that are expected to increase on the solar panels it currently buys from China.
Despite the rapid growth, SolarCity’s second-quarter loss swelled to $47.7 million, or 52 cents per share, from $39.5 million, or 52 cents per share, a year ago. Excluding some items, SolarCity lost $88.5 million, or 96 cents per share, during the spring quarter, more than double the 43 cents per share that it lost a year ago, but less than the 99 cent loss analysts expected.
Second-quarter sales jumped by 62 percent to $61.3 million short of the $63.2 million analysts expected.