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Clean Power Image Credit: Silevo

Published on August 28th, 2014 | by James Ayre

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SolarCity’s Planned 1 GW Solar PV Plant Will Cost Up To $450 Million

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August 28th, 2014 by
 
Image Credit: SilevoWhile SolarCity’s recent acquisition of the solar PV panel manufacturer Silevo has certainly opened up a number of interesting options for the company, none of them are likely to be cheap.

According to recent reports, SolarCity’s newly planned 1 GW integrated PV manufacturing plant for Silevo’s technology is expected to cost somewhere between $400–$450 million.

Deutsche Bank analyst Vishal Shah commented on that figure in a recent research note to investors, noting also that SolarCity’s goal of completing the largest solar PV manufacturing plant in the US was still on schedule for 2016. Negotiations with the state of New York are reportedly under way.

The note also mentioned that the company is expecting its own capital expenditure contribution for the project to “only” be in the several hundred million dollars range — which means that the company will likely need to make a secondary public offering of stocks in order to fund it.

Shah also stated that he was expecting SolarCity to continue to see “strong near term bookings momentum” — possibly resulting in the company exceeding its projected 2015 deployed guidance, which currently is set at somewhere between 900 MW and 1,000 MW.

While on the subject, when the deal between SolarCity and Silevo was first announced, we covered the possibilities in great detail. While the news above is of course the most expected action following the acquisition, there are still some other things to consider as well, such as the effect that acquisition will/could have on the “overall solar picture”. The linked article is worth a read in my opinion.

[Update] Here’s an important comment from one of our readers (slightly edited):

The actual note stated a “few” hundred million. A nuance, but reflects a more minimal net capex requirement as opposed to the critical view $1.5 billion of net capex needed.

Also, the “secondary” has a high probability of being mostly as convertible bond offering. The day of the Silevo announcement, Lyndon Rive stated this, so it is absolutely no secret or revelation that they would be doing a convertible offering. It’s only fair you mention this, but seems to be left out for some reason.

SolarCity’s latest ABS was three times oversubscribed, so there potentially could be a strong demand for the convertible bond as well. This is important information since it would arguably indicate SolarCity could raise the required capital at favorable terms minimal short term dilution.

Image Credit: Silevo

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.



  • Wayne Williamson

    Just trying to figure out the numbers…1 gw is 4 million 250w panels(a year I guess). So 400 million or 100 dollars a panel is pretty amazing….

    Wonder what are the other costs…. material, people, power, taxes, etc…

    Just wondering if its smarter to install the first year at the plant its self….lets see…
    1gw * 5hrs * 200days is 1twh a year or 100million at 10cents a kilowatt hour.

    Oh yeah, all the numbers are just guesses……

  • jonbohmer

    $450M would be a steal. That would give them a 3x advantage over traditional PV manufacturers. However, that was never part of the pitch of this technology, so I doubt it is the case. The $1.5B mentioned above is much more likely.

  • inductancereluctance

    By the time the factory is built, technology will advance to more exciting, high efficiency technologies that are now leaving the lab. So good luck with that one.

    • DDG

      Modern facilities are adaptable. Do you think this one will not be?.

      • http://solarboss.net/ Jon Ferraro

        Completely true. There is no reason to think that the lab wouldn’t be able to adapt with the evolving times.

        • inductancereluctance

          Assembly of the modules would be adaptable but proprietary patented technology that outperforms Silevo’s design would not be adaptable without licensing.

    • JP

      I agree with DDG, factories (or at least modern ones) are built to be configurable, interchangeable, and modular. Facilities and equipment can be upgraded and modified, they are not set in stone.

      Technological improvements do not mean you need to completely replace equipment or an entire factory.

  • Guest2

    The actual note stated a “few” hundred million. A nuance, but reflects a more minimal net capex requirement as opposed to the critical view 1.5bln of net capex needed.

    Also, the “secondary” has a high probability of being mostly as convertible bond offering. The day of the Silevo announcement, Lyndon Rive stated this, so it is absolutely no secret or revelation that they would be doing a convertible offering. It’s only fair you mention this, but seems to be left out for some reason.

    Solarcity latest ABS was three times oversubscribed so their potentially could be a strong demand for the convertible bond as well. This is important information since it would arguably indicate Solarcity could raise the required capital at favorable terms minimal short term dilution.

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