SolarCity, the rooftop solar system installer headed by Lyndon Rive and whose chairman is billionaire Elon Musk, is buying solar panel maker Silevo for up to $350 million.
As part of the announcement, SolarCity also said it's in talks with the state of New York to build a 1 gigawatt solar-panel module factory in New York within the next two years. Once built, it will be one of the largest solar panel production plants in the world, according to a company blog post authored by Musk and SolarCity co-founders Peter Rive and Lyndon Rive. The factory will be followed by one or more "significantly larger plants," according to the company.
Under the acquisition deal, SolarCity will pay $200 million in stock for Fremont, Calif-based Silevo and may pay another $150 million if the solar panel manufacturer meets certain production targets, according to the U.S. Securities Exchange Commission filing.The acquisition is expected to close in the third quarter of 2014.
SolarCity is one of the nation's largest rooftop solar system installers. The company helped revolutionize the financing of solar projects when it started to sell millions of dollars worth of bonds backed by leases for solar arrays installed on residential rooftops to institutional investors like pension and hedge funds. Earlier this year, the company launched an online system that allows regular folks and organizations to buy asset-backed securities.
Now SolarCity is hoping to use massive economies of scale from the planned solar panel factory to achieve a breakthrough in the cost of solar power. Musk and the Rive brothers acknowledge there are too many suppliers already. But they argue those suppliers are producing panels with relatively low photonic efficiency solar cells at "uncompelling costs."
"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," Musk, Peter and Lyndon Rive wrote in the blog post.
Thumbnail photo: SolarCity