ADVERTISEMENT

Gov. Andrew M. Cuomo said Monday he is optimistic that an expanded incentive package will be worked out for Silevo and its potential acquirer, SolarCity, to build a sprawling solar panel factory in South Buffalo.

“It’s not done yet, but I have a good feeling,” Cuomo said Monday in Buffalo.

Last November, the state agreed to invest $225 million to develop the RiverBend clean-energy and technology hub on the site of the former Republic Steel plant in South Buffalo.

Silevo, a California-based manufacturer of high-efficiency solar panels, was one of the two initial companies that agreed to move into the RiverBend complex, with plans to build a factory that would have the annual capacity to produce enough solar panels to generate 200 megawatts of electricity.

But those plans changed dramatically in June, when Silevo agreed to be acquired by SolarCity, the nation’s largest installer of residential solar energy systems, in a deal worth as much as $350 million. SolarCity executives immediately said they wanted to vastly expand the scope of the Buffalo factory, making it five times bigger, with the capacity to make enough solar panels to generate 1 gigawatt, or 1,000 megawatts, of electricity.

With the expanded scope of the RiverBend factory, which now is expected to employ well over 1,000 people, compared with 475 under Silevo’s original plan, SolarCity executives have been seeking additional aid from the state.

“It’s bigger, so it’s going to be more everything. More funding. Bigger footprint, etc., if we can get it done,” Cuomo said, without disclosing how much more of a state investment SolarCity is seeking.

“It’s an evolution from the agreement we had,” Cuomo added. “It is still ongoing, but it is on a positive track.”

The solar panel factory would be one of the biggest of its type in the world and would immediately establish Buffalo as a center for solar module manufacturing. State officials hope that it will help create the critical mass needed to attract suppliers and other businesses to support the solar energy industry in Western New York, making it a magnet for other businesses in the industry and for workers with expertise and skills.

“It would be huge for Buffalo,” Cuomo said. “I mean, really, of everything we’ve done, I think it would be the single biggest thing.”

Under SolarCity’s plan, the Buffalo factory would become its in-house source of high-efficiency solar panels that the company believes it will need to meet the rapidly rising demand for rooftop solar energy systems. Those systems still typically require hefty federal tax subsidies – through a 30 percent federal tax credit that is set to expire at the end of 2016 – to be financially viable. But demand has increased as the price of solar panels has dropped and efficiency has improved.

SolarCity executives have said they believe they can further 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 means that SolarCity would need fewer panels and less mounting and installation equipment to generate the same amount of electricity, further reducing costs. Building a factory in Buffalo also would allow SolarCity to avoid tariffs that are expected to increase on the solar panels that it currently buys from Chinese producers.

Cuomo said the RiverBend project, combined with growth on the Buffalo Niagara Medical Campus, improvements at Canalside and development along the Buffalo waterfront and other investments through his Buffalo Billion initiative, is helping to build a positive buzz about the Buffalo Niagara region.

“You’re starting to feel the momentum come to us,” Cuomo said. “In the beginning, everything was uphill. In the beginning, I would say to a company, ‘Why don’t you think about going to Buffalo?’ And they would say, ‘What?’

“Now I say, ‘I want to talk to you about Buffalo,’ and they say, ‘You know, I’m hearing a lot about Buffalo.’ ”

email: drobinson@buffnews.com