Dive Brief:

• SolarCity, the biggest U.S. rooftop solar installer, will acquire high efficiency PV module manufacturer Silevo, making it the 4th U.S.-based vertically integrated solar company capable of manufacturing, sales, and development after SunPower, SunEdison, and First Solar.
• SolarCity will pay $9 million in cash, take on $23 million in liabilities, and provide at least $168 million and potentially as much as $318 million in stock, depending on how Silevo performs at the production of its advanced, 21%+ efficient, hybrid crystalline silicon-thin film solar cells.
• SolarCity intends to expand the 200 megawatt manufacturing facility Silevo is now building in New York to a 1 gigawatt capacity within the next 2 years, making it one of the biggest module manufacturing factories in the world, and the company hopes to subsequently build two more such plants.

Dive Insight:

SolarCity Chairman Elon Musk said the acquisition is designed to assure adequate module supply as the company expands its installation capacity to “tens of gigawatts per year” through the next ten years. Analysts say vertical integration will also support SolarCity’s efforts to further reduce the cost of solar in anticipation of (1) the drop in the federal ITC from 30% to 10% at the end of 2016 and (2) the need to compete without subsidies before the end of this decade.

This buy follows an early move upstream by SolarCity through the acquisition of frame maker Zep Solar and CEO Lyndon Rive suggested the company will soon acquire inverter and storage technology suppliers. CTO Peter Rive said SolarCity has adequate access to basic modules but acquired Silevo, after considering 20 module manufacturers, to have access to new supplies of advanced modules.

Describing an ambition to ultimately have 10 gigawatts of production capacity, SolarCity executives talked about controlling solar's “installed cost per kilowatt-hour” and meeting an “infinite” market over the coming “30 or 40 years.”