A deal between Panasonic Corp. and Tesla Motors Inc. will bring more cash and manufacturing experience to the SolarCity factory in South Buffalo as it prepares to begin making solar cells and modules this summer.
The companies said Tuesday they had finalized a deal announced in October that allows Panasonic to take on a major role in the solar manufacturing plant on South Park Avenue.
Howard Zemsky, chief executive of the state’s Empire State Development, said Panasonic will invest $256 million as part of the agreement.
“The finances and partnership are extremely strong, the experience is extremely deep and the prospects are really bright,” Zemsky said.
Tuesday’s announcement also confirmed that Tesla and Panasonic expect to begin making photovoltaic cells and modules in Buffalo this summer. They plan to hit full production in 2019.
Under the partnership, the Japanese manufacturer will help pay for capital costs at the plant, while Tesla has agreed to a long-term agreement to buy Panasonic solar cells and modules to be used in its products. Tesla, which acquired SolarCity in November, plans to include the solar cells in its glass tile roofs and other products.
Panasonic’s investment is significant because the Buffalo plant is expected to require more capital through the end of 2018 as it begins to ramp up production.
Zemsky pointed to the fact that both the world’s largest clean energy product manufacturer and one of the world’s largest solar cell manufacturers – which combined have a market capitalization of nearly $60 billion – have joined forces to do business in Buffalo.
The announcement by Panasonic and Tesla on Tuesday also affirmed a previous commitment by SolarCity to create 1,400 jobs at the Buffalo site, including more than 500 manufacturing jobs.
Tesla and Panasonic are already working together on a plan to produce electric car and grid storage battery cells at a plant in Nevada.
The cells and modules made at the SolarCity plant in Buffalo will be used to produce solar panels and eventually Tesla’s solar glass tile roofs. Research, development and testing of cells for the solar roof tiles have already begun at the company’s facility in Fremont, California.
Panasonic brings more than money to the table; it brings experience manufacturing photovoltaic cells. The company has been producing solar panels for three decades. SolarCity has never made its own solar panels except for at its pilot factory in Fremont, and neither has Tesla.
“I would say that hastened the ramp-up of that facility. It’s hard to ramp up a facility from zero miles per hour to full-speed production,” Zemsky said
The Buffalo factory, which will operate under the SolarCity name, sprawls more than 1.2 million square fit and will have the capacity to make up to 10,000 solar panels daily.
“Having the kinds of experience Panasonic has, coupled with the millions of dollars they’re investing, will prove to be a big plus for that plant and for Buffalo,” Zemsky said.
The $900 million SolarCity factory was built by the state as part of Gov. Andrew M. Cuomo’s Buffalo Billion economic development initiative. SolarCity is a wholly owned subsidiary of Tesla Motors.