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SolarCity’s expanded solar panel manufacturing plant in Buffalo will be one of the biggest in the world – and it could be just the beginning.

With its $200 million acquisition of Silevo, a keystone in the state’s RiverBend clean-energy hub, SolarCity, backed by billionaire Elon Musk, immediately supercharged the state’s efforts to turn the Buffalo Niagara region into a hot spot for clean-energy businesses.

It also eased some of the lingering concerns among skeptics who wondered whether a pair of small startup companies could form the foundation for an ambitious push to create a new industry, essentially from scratch, with $225 million in backing through Gov. Andrew M. Cuomo’s Buffalo Billion economic-development initiative.

“Our partners went from being a promising company with an emerging technology to a publicly traded company with a market value of almost $6 billion,” said Howard A. Zemsky, co-chairman of the Western New York Regional Economic Development Council.

“People have been asking, ‘Is the Buffalo Billion working? Where are the jobs?’ ” said Erie County Executive Mark C. Poloncarz. “Well, in just two years, we could have more than 1,000 jobs in a sector of the economy where today we have zero.”

The acquisition, which could be worth $350 million if Silevo hits certain volume and cost targets, has enormous implications for the RiverBend project:

• It immediately positions Buffalo as a major player in the U.S. solar power industry, with a plant that will be one of the world’s biggest solar module production facilities.

It brings one of the nation’s biggest solar power companies to the RiverBend project, and the massive size of the planned solar panel plant gives it the scale that will help it become a magnet for other businesses that supply components and services to the Buffalo factory.

“There will be suppliers. There will be engineering companies,” Poloncarz said. “It’s not just going to be one company.”

And that could mean many more jobs, beyond the more than 1,000 positions that SolarCity envisions at its Buffalo factory.

“I absolutely think it’s going to change the game,” said Christopher Beitel, the Silevo executive vice president who has been coordinating the plans for the RiverBend factory.

The expanded RiverBend factory “is going to bring opportunities to co-locate the entire ecosystem associated with making solar panels on or very near the manufacturing complexes that we create.”

“That’s really going to be critical to the scale to drive the costs to where we need it to be,” he said. “What’s exciting for Buffalo is not just the 1,000 jobs or so that we’re going to create for the Silevo manufacturing facility, but from all of our partners upstream and downstream.”

And if state officials succeed in luring another major solar panel manufacturer, Solar Frontier, to open a plant in Buffalo Niagara, it will further establish the critical mass needed to attract suppliers and other ancillary jobs to the area. State officials earlier this year signed a preliminary agreement with Solar Frontier to explore the feasibility of the Japanese solar panel-maker opening a significant factory in Buffalo Niagara.

• The acquisition also brings much deeper pockets to the RiverBend project. SolarCity’s chairman, Musk, is a billionaire who also is CEO of electric car-maker Tesla Motors.

The company had $164 million in sales last year and is forecasting that demand for the solar power systems it installs will jump to as much as 1 gigawatt (1,000 megawatts) in 2015. That would roughly match the annual output of the Buffalo factory once it’s running at full steam.

• The deal gives Silevo, a California-based startup with limited production capacity at its Chinese factory, the backing of a major U.S. solar power system installer. Instead of having to find customers on its own, the production of the Buffalo factory will largely be used to install solar energy systems for the surge SolarCity expects in its customer base.

SolarCity, which has more than 110,000 customers, expects to install solar energy systems with a total capacity of up to 550 megawatts this year. At the moment, those installations use solar panels that SolarCity buys from other companies. Once the Silevo acquisition is completed and the Buffalo factory is running, probably two years from now, SolarCity will be able to supply those panels from its own factory on the old Republic Steel site.

“They don’t have to worry about selling to anyone anymore,” said Shyam Mehta, a solar industry analyst at GTM Research.

• And this could be just the beginning. SolarCity executives don’t think the Buffalo plant will be big enough to handle all of the growth they see in the solar power industry – not by a long shot.

They said the Buffalo factory, which would be one of the biggest in the world, could be dwarfed by future production sites that are 10 times bigger in order to achieve the economies of scale needed to drive down prices to their lowest possible point – assuming that demand grows as rapidly as SolarCity executives think it will.

“That could be an expansion of the Buffalo factory, or it could be another location,” said Lyndon Rive, SolarCity’s co-founder and CEO.

Those decisions likely are years away, but for now, SolarCity’s push to meet its forecast boom in demand is centered squarely in Buffalo.

“If we don’t do this, we felt there was risk of not being able to have the solar panels we need to expand the business in the long term,” Musk said.

“We’re concerned that if you look two or three years down the road, there will not be enough production capacity to supply what we need,” he said. “We ultimately expect to be installing tens of gigawatts a year.”

Getting there means bringing the cost of solar power systems down to the point where they are on par with electricity generated with fossil fuels, such as coal or natural gas. In most places, other than high-cost areas such as Hawaii, consumers must rely on subsidies, including federal tax credits, to make solar power systems competitive, Mehta said.

Silevo’s high-efficiency solar panels will be a big factor in SolarCity’s plans to bring those system costs down, especially with the 30 percent federal tax credit on solar projects set to expire at the end of 2016.

“Silevo is a very important part of SolarCity’s long-term strategy,” Mehta said. “It is a huge validation of their technology.”

And it is that technology that caught the eye of state officials when they were seeking tenants for the RiverBend complex, and SolarCity executives when they were looking to expand their business into solar panel manufacturing.

Silevo’s technology allows its solar cells to convert about 21 percent of the sun’s energy into electricity and has the potential to boost its efficiency rate as high as 24 percent. That’s better than the industry average of about 17 to 18 percent and competitive with the efficiency of panels made by the most efficient producer in the market, SunPower Corp.

The downside to higher-efficiency panels is that they tend to cost more, but SolarCity executives said Silevo’s technology, which has fewer production steps and uses copper as a key material rather than more costly silver, has the potential to produce panels that can be more competitive on cost as they move into high-volume production.

That could lower the overall cost of installing a solar power system because the higher-efficiency means that fewer panels are needed to generate the same amount of electricity, which also lowers installation costs by reducing the amount of hardware and labor needed.

“This seems very transformational,” said Patrick S. Jobin, an analyst at Credit Suisse, “kind of buying a competitive advantage in terms of cost and supply.”

email: drobinson@buffnews.com