June 18, 2014
By: David Robinson
Source: The Buffalo News
Musk firm’s purchase of Silevo means panel factory at RiverBend may be 5 times bigger
solar panel factory slated to be part of the RiverBend clean-energy hub
in South Buffalo could be more than five times bigger than originally
planned, after the California-based company agreed Tuesday to be
acquired by one of the nation’s biggest installers of solar power
Instead of creating 475 jobs, as originally promised by
the solar panel-maker Silevo, the $200 million deal and the expansion of
the Buffalo factory could create “well over 1,000 jobs” under the
company’s new owner, SolarCity Corp. of San Mateo, Calif. Its chairman
is Tesla Motors founder Elon Musk.
“We’re interested in going
bigger and as fast as possible,” said Christopher Beitel, Silevo’s
executive vice president, who has been coordinating the company’s
development efforts at RiverBend. “We don’t want to derail some of the
work that’s already been done at the site.”
Silevo is one of the
two companies that have agreed to open a factory in the $225 million
RiverBend complex, one of the key initiatives in Gov. Andrew M. Cuomo’s
Buffalo Billion economic-development initiative.
“It’s going to dwarf what had been discussed,” Beitel said in an interview.
If the expanded plans come to pass, Buffalo could be home to one of the largest solar panel factories in the world.
said the plant’s expansion likely will lead to a redesign of the
RiverBend complex, which originally was envisioned as a series of
buildings running along a central spine. With the solar panel factory
now envisioned as five times larger, the complex now may have fewer but
bigger buildings than originally planned.
Cuomo hailed the
announcement. “It is truly a sunny day in Buffalo,” he said in a
statement. “The prospect of thousands of new solar energy jobs coming to
the region, marking another landmark investment and economic
game-changer taking place in the new Western New York.”
Kaloyeros, CEO of the SUNY College of Nanoscale Science and Engineering
in Albany, said the deal is a validation of the Cuomo administration’s
efforts to establish a clean-energy and technology hub in Buffalo, using
the same model that the state successfully used over the last two
decades to establish a thriving semiconductor industry in the Capitol
The SolarCity acquisition of Silevo will lead to a “significantly expanded relationship with New York,” he said.
about getting on the map with the solar industry in a hurry,” said
Buffalo Mayor Byron W. Brown. “This project will move even more quickly
Musk, SolarCity’s chairman and its biggest shareholder, is
founder and CEO of electric car-maker Tesla Motors and CEO of Space
Exploration Technologies Corp., a private space travel company.
SolarCity carved its niche by offering rooftop power systems to
customers who sign long-term contracts to buy the power generated.
company, which had $164 million in sales last year, is forecasting
rapid growth in the demand for the solar energy systems it installs,
rising from an estimated 550 megawatts this year to as much as 1
gigawatt in 2015.
“Solar is going to continue to grow,” said
Shyam Mehta, an solar industry analyst at GTM Research. “Solar is only
going to get cheaper and, at best, electricity from fossil fuels will be
Howard A. Zemsky, co-chairman of the Western New York
Regional Economic Development Council, said the merger is a vote of
confidence by SolarCity in Silevo’s technology and a key step in
creating the critical mass the state is seeking for the solar power
“It’s good to see such a significant player like Musk
and SolarCity validate New York state’s confidence in the technology of
Silevo,” Zemsky said. “And, of course, SolarCity’s larger size and more
varied market segments open up more opportunity for Western New York.”
J. Rive, SolarCity’s co-founder and chief technology officer, said in
an interview that the Buffalo site has several advantages, including the
expectation that the factory will receive low-cost electricity from the
Niagara Power Project. Its location near significant rail lines,
highways and Great Lakes shipping lanes makes it easy to ship products
in and out. And the company also liked the engineering talent available
from local colleges and universities, including the University at
Under the deal, SolarCity agreed to buy Silevo for $200
million in stock, with the potential for $150 million in additional
payments if Silevo meets certain performance and cost targets.
acquisition will allow SolarCity, already one of the nation’s biggest
solar power companies, to branch out into manufacturing as part of a
push to improve the efficiency of solar energy systems and drive down
their costs to make them more competitive with electricity produced by
fossil fuels such as coal and natural gas. Silevo’s panels can convert
about 21 percent of the sun’s energy into electricity, compared with
about 18 percent for conventional solar modules, and SolarCity
executives said they think Silevo’s efficiency eventually could reach 24
“I think this acquisition will come as unexpected to
some, probably to most,” Musk said during the conference call. SolarCity
had stayed away from solar panel production in the past because “we
didn’t think until now there was a need to do this.”
demand for its rooftop solar panel systems soaring – rising by 78
percent in the first quarter – SolarCity executives changed their minds.
“If we don’t do this,” Musk said, “we felt there was a risk of not
having the solar panels we need to expand the business in the long