Japanese electronics giant Panasonic has already helped Tesla Motors move into the market for giant batteries.
Now Panasonic will aid the Palo Alto electric automaker’s planned expansion into solar power as well.
The two companies announced late Sunday an agreement under which Panasonic will begin the production of solar cells and modules in Buffalo, N. Y., next year, with Tesla packaging and selling the solar arrays. Tesla wants to sell the arrays in conjunction with batteries, which can store power for use when the sun is not shining.
San Mateo’s SolarCity, which Tesla plans to buy for $2.6 billion, is already developing a solar manufacturing plant in Buffalo and had expected to begin production there in 2017. The agreement between Tesla and Panasonic is contingent upon Tesla and SolarCity shareholders approving the acquisition.
Panasonic is already helping Tesla build and run its massive $5 billion battery Gigafactory near Reno. Under a non-binding letter of intent between the two companies, Tesla plans to sign a long-term purchase agreement for Panasonic’s solar cells.
“We are excited to expand our partnership with Panasonic as we move towards a combined Tesla and SolarCity,” said J. B. Straubel, Tesla’s chief technical officer, in a statement. “By working together on solar, we will be able to accelerate production of high-efficiency, extremely reliable solar cells and modules at the best cost.”
The Buffalo solar manufacturing plant, located on the site of a former steel mill, already has a complicated history.
It was initially intended to be the first factory for Fremont startup Silevo, which had developed a process for making high-efficiency solar cells at low cost. SolarCity bought Silevo for $200 million in 2014 and immediately announced plans to expand the Buffalo plant’s proposed size. Now Tesla and SolarCity shareholders are scheduled to vote Nov. 17 on the planned combination of their two companies.
SolarCity does not own the 1.2 million-square-foot plant. The factory and the surrounding technology park, called RiverBend, are owned by the State University of New York, with the state devoting $750 million to building the solar plant. SolarCity will lease the facility and has agreed to spend $5 billion on capital costs, operational expenses and other costs associated with it.
According to an update issued Monday by New York State officials, construction of the factory is nearly complete, with workers now finishing the interior and installing manufacturing equipment. A SolarCity spokeswoman said production should begin next summer.
SolarCity had been planning to use Silevo’s production process at the plant, not Panasonic’s. But the spokeswoman said the two processes would both contribute to the plant’s products.
“Both SolarCity/Silevo and Panasonic have been working on similar cell architecture on similar process equipment already,” wrote spokeswoman Kady Cooper in an email. “Together we will combine the best cell components from both and integrate them into the new solar module that will be produced in Buffalo.”
New York officials appeared pleased to have a company of Panasonic’s pedigree and global reach join the project.
“Tesla’s partnership with Panasonic will bring world-class manufacturing expertise to the table, strengthen the company’s competitiveness and position the entire region for future economic revitalization,” said Howard Zemsky, CEO of Empire State Development, the state’s economic development authority. “By bringing Tesla and Panasonic together, this innovative partnership will transform Buffalo into a national leader in the production of affordable, reliable clean energy.”
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