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All the buzz around SolarCity’s acquisition of solar panel manufacturer Silevo – the single biggest piece of Gov. Andrew M. Cuomo’s Buffalo Billion initiative – sounded eerily familiar to analyst Shyam Mehta.

It reminded him of Solyndra, the high-profile solar panel maker that made waves in 2009 when it won $535 million in federal loan guarantees, only to go bankrupt two years later and touch off a political firestorm that bruised the entire solar power industry.

But is Silevo another Solyndra?

Mehta doesn’t think so.

“Silevo is not a guaranteed success story,” Mehta said. “But unlike with Solyndra, whose prospects we were skeptical of even during the best of times, there is legitimate cause for optimism in Silevo’s case.”

If Mehta is right, that will be good news for the Buffalo Niagara region, since Silevo and SolarCity are planning to build one of the world’s biggest solar panel factories here – a facility that will be five times bigger than state officials initially envisioned.

At the moment, the spotlight is squarely on Silevo after its $350 million acquisition by SolarCity, the nation’s leading residential solar panel installer. It shines even brighter because SolarCity’s chairman is billionaire Elon Musk, who has superstar status after co-founding PayPal and then launching electric car manufacturer Tesla Motors.

Musk’s involvement earned the Silevo deal headlines in the New York Times, the Wall Street Journal and other national publications. Not since Solyndra won its federal loan guarantees in March 2009 had another solar industry investment captured such attention in the mainstream media, Mehta said.

“The poisoned chalice has truly been passed on,” Mehta wrote in a report this week. “Silevo is now the next great American photovoltaic manufacturing startup hope.”

With its acquisition by SolarCity, plans for the factory Silevo intends to open in the RiverBend clean energy hub in South Buffalo went from a big factory that would employ 475 people and be more than 1½ times bigger than the average Walmart to one that’s got five times the capacity that was originally planned and provide well over 1,000 jobs.

To be sure, Silevo and Solyndra do have similarities. Both companies are from Fremont, Calif., in the San Francisco Bay area. Both companies were heavily backed by venture capitalists. Both developed proprietary solar panel technology to let them generate more electricity from rooftop solar systems. And both got significant government help, with Silevo’s assistance coming from the state’s $225 million investment to build the factories, infrastructure and equipment in the RiverBend complex.

But Mehta said the similarities end there:

• Silevo’s acquisition by SolarCity will give it a built-in customer base. If SolarCity’s business expands as its top executives predict, it will be installing enough solar systems by the end of next year to use up all of the Buffalo plant’s annual capacity, projected to be enough solar panels to produce 1 gigawatt of electricity. Solyndra, on the other hand, had to compete for buyers with other panel manufacturers.

• The technology behind Silevo’s high-efficiency solar panels “is evolutionary rather than revolutionary,” Mehta said. While there are some differences, the way Silevo’s solar panels are made isn’t vastly different from other methods for producing crystalline silicon panels. That allows Silevo to take advantage of the cost-saving steps and economies of scale already developed by the industry over the last two decades.

“Silevo, which is building a more familiar mousetrap, has been able to adopt a low-cost mentality right from the get-go,” Mehta said.

Mehta noted that costs from Silevo’s 32-megawatt solar panel factory in China have been “impressively low given the small scale of that plant. That bodes well for the competitiveness of the Buffalo facility.”

That wasn’t the case with Solyndra, which focused on the commercial rooftop market with a lower-efficiency tubular-shaped solar module that had a maximum efficiency of 11 percent, compared with Silevo panels that can convert 21 percent of the sun’s energy into electricity and have hit 23 percent in lab settings. Despite the low efficiency of its modules, Solyndra boosted the efficiency of its overall systems because its tubular design allowed it to capture energy from the sun’s rays more directly as the sun moved across the horizon.

But Solyndra’s unique design “forced it to reinvent the wheel when it came to manufacturing equipment and materials,” Mehta said. That pushed up its equipment and material costs – an issue that was compounded when Solyndra decided to open its first full-scale factory in Fremont, one of the most expensive parts of the country. Silevo’s costs in Buffalo will be much lower.

• Solyndra also had lousy timing. It started full-scale production of its panels in mid-2009, just as prices of the silicon from which its competitors’ panels were made started plunging, dropping from $500 per kilogram to less than $100, Mehta said. At the same time, the solar panel market was plagued by production that far outstripped the demand, and prices faced further downward pressure from low-priced Chinese panels.

The result: Conventional solar module prices plunged by 63 percent from 2008 to 2011, undermining the competitiveness of Solyndra’s technology, which didn’t rely on silicon as its main component. Solyndra was forced to slash its prices to compete, leading to fatal losses.

“Silevo, on the other hand, will be scaling up production during a much more stable phase of the photovoltaic manufacturing business cycle,” Mehta said.

The industry’s overcapacity problems have vanished, and while Mehta expects panel prices to drop further next year, he predicts that they will be far more gradual than in the past. Even better for Silevo, the federal government has taken preliminary steps to impose duties on solar modules imported from China, which would push up the price of those panels and make Silevo’s Buffalo-made panels more competitive.

“There are execution challenges here, but the Silevo technology could force the cost curve down for rooftop installations,” J.P. Morgan analyst Paul Coster said in a report. Those lower costs, if they come to pass, could help Silevo and SolarCity weather the significant hit the solar industry stands to face at the end of 2016, when the federal tax credit for solar installations is set to drop from the current 30 percent to 10 percent.

“While it’s far too early to anoint Silevo as a genuine contender for the module manufacturing crown, it at least has a fighting chance,” Mehta wrote. “Which given the recent history of American photovoltaic manufacturing startups, is all one can ask for.”

email: drobinson@buffnews.com