The exodus continues at SolarCity's California executive suite, just as hiring starts to ramp up at its sprawling solar panel factory in Buffalo.
Only eight months after Tesla Inc. acquired SolarCity, all of the rooftop solar installer's highest-ranking executives have either left or plan to leave the electric vehicle-maker, including co-founders Lyndon and Peter Rive.
The departures, which include SolarCity's top financial executive and its top regulatory policy official, are part of a radical reshaping of the rooftop solar installer's leadership and strategy under Tesla.
That has major implications for the Buffalo Niagara region, since Tesla's solar energy business is planning to open a massive solar panel factory in South Buffalo later this summer, backed by $750 million in subsidies from state taxpayers as part of the Buffalo Billion economic development initiative.
The latest to go is Peter Rive, the co-founder of SolarCity and a key figure in the development of its solar roof that is expected to be a key product produced at Tesla's massive solar panel factory in South Buffalo. A Tesla spokesperson on Wednesday confirmed that Peter Rive was leaving Tesla "to explore new opportunities," without elaborating.
"Pete has played an instrumental role in expanding access to solar to hundreds of thousands of people across the country, helping to accelerate the world’s transition to sustainable energy," the spokesperson said.
Tesla didn't name a successor for Peter Rive.
"Pete’s responsibilities, including work on Solar Roof, will be distributed among Tesla’s existing engineering teams," the spokesperson said.
Just two months ago, Rive's brother, Lyndon, left SolarCity saying he wanted to focus on developing a new business venture.
The SolarCity exodus involved more than the Rive brothers. Tanguy Serra, SolarCity's chief financial officer, left the company following the merger. Jon Wellinghoff, a former top federal energy regulator who was SolarCity's policy chief, also left the company after the merger.
In the wake of Lyndon Rive's departure, Cal Lankton, Tesla's vice president of global infrastructure operations, took on an expanded role as head of sales and operations for energy products, which includes both the solar power business and Tesla's battery-making operations, centered around its Nevada gigafactory.
Peter Rive's departure, however, will break the highest profile tie that remained between the brothers who founded SolarCity and their cousin, Elon Musk, whose vision to create a renewable energy superpower is built around electric vehicles, solar panels and the advanced batteries to both power the cars and store the electricity produced by the solar arrays.
The Buffalo solar panel factory is a significant part of Musk's vision, and Peter Rive was instrumental in the development of the South Park Avenue gigafactory.
As SolarCity's technology chief, he was in charge of the company's focus on developing high-efficiency solar panel technology that the company hoped would be instrumental in driving down the costs of its rooftop solar arrays as states began to reduce the subsidies provided to the solar industry. He also played a key role in the development of Tesla's solar roof, which the company is counting on to become a major product produced at the Buffalo factory.
The news of Peter Rive's plans to leave Tesla came as its partner, Panasonic, ramps up its push to have between 120 and 150 workers on board by the end of August so it can begin producing solar modules in Buffalo that will be used in both the solar roof and conventional solar panels.
Panasonic already has hired 60 to 70 workers in Buffalo, said Mark Shima, the president of the Panasonic business unit that includes the Buffalo solar panel factory. Tesla brought in Panasonic as a partner last December under an agreement where Panasonic will make solar cells and modules in Buffalo that will go into the solar panels and solar shingles that Tesla produces there.
Mayor Byron W. Brown said Rive's departure from Tesla did not shake his confidence in the company's plans to begin production in its portion of the facility this summer.
"They haven't indicated any problems or reasons to be concerned," Brown said.
Howard Zemsky, the Buffalo developer who heads Empire State Development Corp., said he had met with Tesla executives in advance of Peter Rive announcing his plans to leave the company.
"They are putting more of their management in executive positions at the solar division," Zemsky said. "This is perfectly normal orderly and expected."
The state spent $750 million to build and equip the Buffalo factory for Tesla, in exchange for a pledge to create 1,460 jobs in the Buffalo Niagara region, along with 1,440 more local positions from suppliers and service providers.
The Rive brothers formed SolarCity in 2006, building on an idea from Musk, who provided financial backing for the venture and became its chairman. Under the Rives, SolarCity grew rapidly to become the nation's largest installer of residential rooftop solar energy systems. But it grew through a business model that required it borrow money so homeowners could lease their solar systems. As debt mounted and growth began to slow, Tesla bought SolarCity for $2.1 billion last year.
Since then, Tesla has made big changes to the solar energy business. It scrapped its door-to-door sales force to cut stubbornly high customer acquisition costs. It moved away from a growth-at-any-cost strategy in favor of a focus on more profitable installations, even if it meant slower growth or even fewer sales. Tesla's first-quarter solar installations were down 40 percent from a year ago.
Tesla also began to push a loan program that allowed consumers to buy their rooftop arrays outright, rather than lease them. That brought Tesla more in line with recent consumer preferences that favor direct ownership over leasing, but it also helped reduce the capital needs of the solar business.
And SolarCity worked closely with Tesla engineers before the merger to develop its solar roof, a groundbreaking — but costly — product that can generate solar power, but looks like a conventional roof. Musk is counting on the solar roof to be a way for Tesla to stand apart from the increasingly competitive solar industry and open up a new pool of customers among the 5 million U.S. households that need to replace their roof each year.