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Published on June 21st, 2014 | by Adam Johnston


What The SolarCity Silevo Acquisition Could Mean

June 21st, 2014 by  

In case you haven’t heard the big news, SolarCity acquired solar panel manufacturer Silevo this week. What could this mean for the overall solar picture? Below are two things to consider with this deal.

Image Credit: Solar Panel Worker via ShutterStock

1. Ongoing  Increase in Solar Company Values & Investments

In recent days, SolarCity’s stock price has increased in value by 25%. Other solar companies had their value jump tooo, including Yingli Green Energy by 8% and ReneSola by 10%.

The value of the deal was $200 million up front. This includes $168 in stock, $23 million in liabilities, plus $9 million in cash. Afterwards, potential earnouts exist of $150 million in stock over the next two years, based on cost targets and production.

As solar companies jump in net worth, financial institutions will be more bullish about this market. Roadblocks seen in third party lending could decrease with banks finding this as a tantalizing proposition to diversify their asset mix.

2. Move Towards Providing Everything Under One Roof 

Just like how individual companies provided internet, telephone, and television services all in one, SolarCity is joining the solar industry’s movement towards a new and more efficient system, a system in which individual companies provide both manufacturing and solar panel installation, and maybe even manage the financing. SolarCity Chairman Elon Musk noted in a teleconference that the time was right to purchase Silevo to support SolarCity’s long-term goal of being a top energy provider. Silevo’s Triex panels can reduce the amount of panel space needed by 25% according to the company, while getting the same amount of energy per kilowatt.

In the third quarter of 2013, SolarCity dominated US solar residential installations, with 32% of the market share. That was four times more than its nearest competitor, Vivint Solar. It makes sense for SolarCity to do everything under one roof in the future, especially with its market dominance.

Other US solar companies already in this vertically integrated space include SunPower, First Solar, and SunEdison, but of those three, only SunPower targets the home solar market. It’s unclear yet if installation leaders like Sunrun, Sungevity, and Vivint Solar will follow suit.

Overall this looks like a game-changing move that will have impact on how solar is distributed and the overall marketplace.

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About the Author

is expected to complete the Professional Development Certificate in Renewable Energy from the University of Toronto by December 2017. Adam recently completed his Social Media Certificate from Algonquin College Continuing & Online Learning. Adam also graduated from the University of Winnipeg with a three-year B.A. combined major in Economics and Rhetoric, Writing & Communications in 2011. Adam owns a part-time tax preparation business. He also recently started up Salay Consulting and Social Media services, a part-time business which provides cleantech writing, analysis, and social media services. His eventual goal is to be a cleantech policy analyst. You can follow him on Twitter @adamjohnstonwpg or check out his business www.salayconsultiing.com.

  • Carl Raymond S

    A kilowatt is a rate of energy transfer, so strictly speaking it’s like saying distance per mile/hr. Equally nonsensical.
    kWh is a unit of energy, kW is a unit of power.
    Power is how fast you can run. Energy is how far you can run.

  • Bob_Wallace

    “Silevo’s Triex panels can reduce the amount of panel space needed by 25% according to the company, while getting the same amount of energy per kilowatt.”

    I suspect that’s a mistake the author made and the editor did not catch.

    More efficient panels would use less roof space, which often is not a big deal. But what they would do that matters is reduce the amount of mounting materials and labor needed.

    • jeffhre

      Can be a big beal for a homeowner on a tight budget, and or small roofscape. Though, not a thing for utility scale.

  • Brooks Bridges

    Fantastic news for solar in general. Haven’t known Elon to not achieve a goal so far. Very astute to build factory while there’s a glut. And have heard there is significantly more pollution in China’s production of panels than say, Germany’s.

    My main concern with Solar City is their business model – only leasing the panels. I think long term they will be forced to allow customers to buy. Survey of Californians said they’d rather own by 2 to 1 margin. Also most Germans own. Currently SC gets all the purchase rebates plus the quarterly credits – which is apparently a significant part of their profits. While it’s working so far, as options like Mosaic’s loan program become more wide spread, I expect they’ll have to shift or at least give you an option to own.

    • Solebrity

      I work for SolarCity and we do give homeowners the option to purchase through a third party financier or cash up front where the homeowner does receive the tax credits. We are a little more expensive than other companies when it comes to purchases but unlike other companies we warranty the entire purchased system bumper to bumper for 30 years and include install, insurance to your home and roof, maintenance and repair. This is huge because inverters will go out every 7-12 years and can cost you anywhere from $2500-$5500 a pop for string inverters. As we become fully integrated you will also see us provide in house financing which will change the game on purchasing with SolarCity.

      • jeffhre

        Inverters are getting more reliable. Recent research bears this out. You are now offering in house financing, yet so far, the warranty offer has not closed the value gap. Time will tell.

  • Wayne Williamson

    240watts jump to 340watts per panel is hugh. With the main caveat being how much more per panel does it cost. It would be really cool if they could incorporate the improvements(bump the effeciency) and keep the price(per panel) the same…
    Then again, as they put it, a 6kw array goes from 24 panels to 18 panels. Myself would like to see that same 6kw array go to 8kw array.

  • Bob_Wallace

    Vertical integration must make it easier to run both the manufacturing and installation businesses. From the manufacturing standpoint your market is guaranteed and highly predictable. If you are on the installation end then you know that the product you need is going to be available, that someone won’t buy the supply out from under you during times of tight supply.

    • Yeah, I can really only see this becoming the norm. Well, practically is already.

  • JamesWimberley

    Silevo claims to have innovative cell technology and 22% efficiency. I suspect that in the move to vertical integration we will see more major module manufacturers and installers snapping up innovative small companies, who can’t get the economies of scale by themselves. You must either make 1 GW a year or go out of business.

    • Good points. Could certainly shake things up. A lot of people have focused on how this will result in SolarCity not buying modules from China, but it also simply makes SolarCity more competitive with SunPower, which is already vertically integrated.

    • MySchizoBuddy

      To this date commercially available silevo modules are at 18.4% efficiency

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