SolarCity Corp. announced plans to acquire Silevo Inc. for up to $350 million, with the ultimate goal to achieve “a breakthrough in the cost of solar power.” SolarCity is the U.S.’s largest solar-panel residential installer. Buying Silevo will lower installation costs for SolarCity by allowing it to produce its own more efficient solar panels. The company is set to release new cost-reduction targets in the next few months, SolarCity officials said in a conference call with analysts following the announcement.
In a statement, SolarCity Chairman Elon Musk, also the CEO of electric car maker Tesla Motors Inc., said the move is aimed at economies of scale, better technology, and making sure SolarCity has access to the best solar panels so unsubsidized solar power will out-compete fossil-fuel grid power. Silevo had the best technology team among the PV makers the company looked at, and it produces highly efficient cells which use copper instead of the more expensive silver, SolarCity's Chief Technology Officer Peter Rive said.
Although no other acquisitions are currently being contemplated, SolarCity may acquire additional photovoltaics companies as needed to ensure clear technology leadership and we plan to grow internal engineering significantly.
Solar City is in discussions with the state of New York to build the initial manufacturing plant, continuing a relationship developed by the Silevo team. At a targeted capacity greater than 1 GW within the next two years, it will be one of the single largest solar panel production plants in the world. This will be followed in subsequent years by one or more significantly larger plants at an order of magnitude greater annual production capacity.
The statement continued, "Given that there is excess supplier capacity today, this may seem counter-intuitive to some who follow the solar industry. What we are trying to address is not the lay of the land today, where there are indeed too many suppliers, most of whom are producing relatively low photonic efficiency solar cells at uncompelling costs, but how we see the future developing. 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.
"Even if the solar industry were only to generate 40 percent of the world's electricity with photovoltaics by 2040, that would mean installing more than 400 GW of solar capacity per year for the next 25 years. We absolutely believe that solar power can and will become the world's predominant source of energy within our lifetimes, but there are obviously a lot of panels that have to be manufactured and installed in order for that to happen. The plans we are announcing today, while substantial compared to current industry, are small in that context," the statement concluded.