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SolarCity may seek a partner to make its solar cells

SolarCity is thinking about bringing in a partner to make the solar cells – one of the main building blocks of a solar panel – that will be used in the modules that it will start making in Buffalo next year.

The company said this week that it expects to use solar cells that it buys from an outside supplier when it begins panel production by the end of June 2017.

But Elon Musk, SolarCity’s chairman, said during a conference call that SolarCity, which has agreed to be acquired by Tesla Motors for $2.6 billion, has had discussions about bringing in a partner for its solar cells. That would be an approach similar to what Tesla does with its electric vehicle batteries, where Panasonic makes the battery cells that are used in Tesla’s batteries.

Musk’s comments indicate that SolarCity could seek to establish a more sweeping supply deal for the dozens of solar cells that are used in each solar panel. The solar cells, which convert sunlight into electricity, are the core part of a solar panel.

Musk said SolarCity is “entertaining some discussions with strategic partners on the solar cell manufacturing. And some of those could head in an interesting direction.”

Musk, who also is Tesla’s CEO, said if Tesla and SolarCity win shareholder approval for their merger, the “default path” would be for the merged company to continue to do its solar cell engineering internally and to add to its engineering staff.

“There may be some merit to bringing in a strategic partner, as Tesla has with the battery cell manufacturing,” Musk said.

Panasonic is spending $1.6 billion so it can produce battery cells within Tesla’s $5 billion battery gigafactory, now under construction in Nevada.

SolarCity’s 1.2 million-square-foot factory in South Buffalo, which is being built with $750 million in state incentives, will be the biggest solar panel plant in the Western Hemisphere when it reaches full production, probably sometime in 2018.

The plant’s original plan called for producing enough solar panels to generate 1,000 megawatts of electricity, although Peter Rive, SolarCity’s chief technology officer, said this week that improvements to the equipment design and factory layout could allow it to produce more than 1 gigawatt in panels.

The Buffalo factory is expected to produce high-efficiency solar panels, using technology that SolarCity acquired when it bought panel developer Silevo.

Those panels are expected to be able to convert about 22 percent of the sun’s energy into electricity, up from around 18 percent for many conventional panels.

The higher efficiency is expected to help SolarCity reduce the cost of its rooftop systems, since it will need fewer panels and less associated equipment to generate the same amount of electricity as a system using conventional technology.


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