Solar City’s Push Towards Vertical Integration


Image Credit: Solar City

Image Credit: Solar City


Last week, what many think of as Elon Musk’d third company, Solar City, announced that it was purchasing Silevo, a comparatively small manufacturer of solar panels.  For Solar City, whose business is built on installing and often leasing solar power systems, not manufacturing them, the decision marks a change in strategy.

The reason Silevo, which currently manufactures in both China and California  stood out as an attractive acquisition is that its panel modules are more efficient than other, less expensive panels mass produced produced in China, and thus are able to be acquired at a competitive price.  Silevo had recently announced its intention to establish a new 200 mega watt factory in Buffalo, New York a decision which Musk now suggests may eventually be “super sized’ to a much larger scale than previously imagined. The Solar City Chaiman’s typically immodest goal is to reduce the cost of solar until it is  “cheaper than coal or fracked gas power.”

For those that follow SpaceX, or even Tesla more closely, the changes at Solar City, are intriguing, and seemingly a harbinger of a new effort to vertically integrate its production along the same lines that SpaceX has done, and Tesla is about to do with its own “giga factory” for electric car batteries.

Where this gets interesting for the subject matter covered by, is that if Solar City makes a hard move into solar panel production, it could help to drive the advance of practical improvements in solar technology. Hardly a day goes by without a announcement somewhere on the planet that new research is leading to new predictions of solar cell efficiency, or could lead to a reduction in manufacturing costs. With its obvious implications for off world support, covers such developments routinely.

What we see much less often however, are the real world results of such advances reflected in a noticeable drop in solar panel prices.  As someone who has an uncanny talent for driving innovation while progressively lowering costs, Elon Musk may very well bring the same results to Solar City. What is particularly interesting however, is that combined with Tesla’s focus on mass power storage, and SpaceX’s drive to field a robust  Mars capable transportation system, Mr. Musk is directly pushing all three of the most critical hardware links in establishing a permanent human presence on the Red Planet. Coincidence? Hardly.

Posted in: Solar Power

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