SpaceX, Tesla and SolarCity entrepreneur Elon Musk wants to put the world on the fast track to sustainable energy, and he’s putting his money where the future is.
The solar panel installer’s chairman announced this week the acquisition of solar panel manufacturer Silevo, which will produce panels for SolarCity in a new 1-gigawatt factory in Buffalo, New York — a factory that will be “an order of magnitude” larger than contemporary plants, according to Musk.
SolarCity — already the largest residential solar installer in the U.S. — will become the fourth vertically integrated solar company in the country as a result of the $128 million stock and $9 million cash deal. The company will assume $23 million in liabilities, but its shares went up almost 14 percent immediately following the announcement.
“If we don’t do this we felt there was a risk of not being able to have the solar panels we need to expand the business in the long term,” Musk said on a Tuesday conference call, according to the Associated Press.
Musk has been planning a factory on a similar scale for his leading electric automobile company Tesla Motors, which will be the largest of its kind in the world and produce batteries for Musk’s cars and other interested parties.
Both factories are part of Musk’s goal to ensure the critical components of his future vision are both available, and produced on a scale to make them cheap enough to beat the fossil fuel market.
Musk’s vision — albeit a far off one — is to give his customers the freedom to ignore traditional energy companies entirely. SolarCity panels would generate enough power to charge a Tesla in an owner’s garage, and a Tesla battery would power the home overnight with stored solar energy.
Both endeavors still have to make significant production progress before they’ll become widely affordable. The initial cost of solar conversion is still out of most consumers’ reach compared to traditional energy costs (and that doesn’t even include battery backup), and electric cars make up less than 1 percent of the overall auto market.
Musk is, however, known for crafting forward-thinking ideas and setting goals deemed “impossible” by fellow industry moguls — and then making them possible.
SpaceX, Musk’s space transport manufacturer, was the first private company to build a spacecraft to dock with the International Space Station, and is currently in the best position to snatch a NASA contract to develop the next manned spaceflight program — the first step toward a manned mission to Mars.
Run by Musk cousins CEO Lyndon Rive and Chief Technology Officer Peter Rive, the solar giant is taking on panel manufacturing at a risky time — the market is flooded with them, which has already forced former industry leader Suntech Power into bankruptcy.
Part of Musk’s plan to counter that is to build better panels, which will be better-looking, more efficient and cheaper thanks to the expanded production afforded by the unprecedented factory size. Silevo’s current panels already generate greater power per square foot than their market contemporaries.
Negotiations are currently underway in New York with an expected building time of two years, after which the factory will pump out enough panels to power 200,000 average-sized homes, or 1-gigawatt of electricity, every year.
That’s “just the start” according to Musk, who said future factories would produce ten times as much.
“We want to have a cool-looking aesthetically pleasing solar system on your roof,” Musk said, indicating the same sense of style he brought to electric cars will also go into solar homes. That strategy bridged the gap for many luxury auto consumers — a market base that wanted sustainability without having to sacrifice power or style.
Tesla brought both and is now the leader in its market. If history is any indication, SolarCity is on track to do the same.