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Published on February 18th, 2015 | by James Ayre

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SolarCity Leasing 200,000-Sq-Ft Former Solyndra Manufacturing Facility In Fremont

February 18th, 2015 by  


SolarCity is now leasing a 200,000-square-foot facility in Fremont, California, formerly used by the doomed and media-loved solar energy company Solyndra.

why-solarcity-sideimageWhile the news of the leasing appears to have mostly slipped under the radar, it is quite noteworthy — and certainly seems to say something about the growing strength of the cleantech industry in the region, as well as SolarCity itself. With this new lease, there now remains only one of Solyndra’s major facilities yet to be taken over by another company.

The leasing of the two buildings in question — located at 47700 Kato Road — certainly does seem to suggest that the industry has now completely moved past the issues given light by the Solyndra debacle. Not that we didn’t know that already, but this seem to serve as a good landmark in that regard.

As many have probably guessed by now, the new facilities will be used primarily by SolarCity’s recent manufacturing acquisition, Silevo — very probably as a new research and development center and/or headquarters.

As reporter Nathan Donato-Weinstein of the Silicon Valley Business Journal (who broke the story) noted:

SolarCity is spending big bucks on Silevo’s manufacturing capability. That includes a massive plant under construction in Buffalo, New York, a potentially risky and capital-intense strategy to drive down the cost of panels and boost their efficiency. A large new R&D center in Fremont shows SolarCity is scaling up all aspects of the division.

At the same time, the expansion is a milestone for Fremont, which never gave up on the clean-tech sector despite the negative and highly politicized press over the Solyndra debacle.

“The reality is, we probably opened 20 or 30 new locations last year, and we hire 300-400 people a month,” SolarCity spokesman Jonathan Bass stated in an interview with Donato-Weinstein. “In this particular case, the Silevo team is growing and need a larger space. We looked at a number of different buildings, this was available and suits our needs.”


 

Fremont’s Mayor, Bill Harrison, echoed that, noting: “I don’t think solar was ever really dead.” Then stating that he supported a new “innovation district.” He added: “This cluster of clean tech, advanced manufacturing and solar has blossomed in the last year or so.”

When taking the wider solar market — and some of SolarCity’s other recent moves — into account, this lease makes a good deal of sense. And, as was noted by Bass, is just one of many, as the company gears up for some big changes.

Growth in the wider solar energy industry, and the residential sector in particular, looks likely to continue at a fairly rapid pace over the next few years — SolarCity is the clear market leader in the US residential solar sector, and its moves look likely to serve it well into the near future.

It’s worth noting here that, for the first time ever in the US, residential solar installations during Q3 2014 surpassed those of non-residential installations — with roughly 58% growth seen over the previous year’s Q3.

Back to the topic of Solyndra’s old facility — now leased to SolarCity — one can’t help but wonder, as noted by one of our reader’s Bob Wallace (who tipped us off to this story):

Don’t taxpayers still own the factory? Does this mean we recoup some/all of the money we put into Solyndra?

Could the tariff put on Chinese panels been at least partially to make room for US panel manufacturing to rebuild?

Hmm. Good questions….

That Solyndra debacle left a bad taste in many people’s mouths — one made more clear perhaps by the stark contrast between the operations of Solyndra and that of the lessee SolarCity. Those two certainly do stand apart from one another in nearly every way, do they not? (Not that the mainstream media has figured out the differences.)

As noted in the coverage from the Silicon Valley Business Journal, though, SolarCity isn’t necessarily in the clear — owing to some upcoming challenges concerning expiring tax credits and the like:

Solar’s rebirth isn’t without risks. Paula Mints, founder and chief market research analyst of SPV Market Research, says a big source of uncertainty is the federal Investment Tax Credit (ITC), today worth up to 30 percent of a project’s cost. Such incentives have helped goose demand by lowering prices for consumers, but the ITC is slated to drop to 10 percent by the end of 2016.

That could make SolarCity vulnerable after its big spend on manufacturing, she said. “If, after 2016, there’s nothing to replace the ITC, you may see a slowdown in demand in the US, and underutilized capacity has a cost,” said Mints, who has covered the industry for nearly two decades.

Translation: If demand suddenly decreases, SolarCity could be stuck with a very expensive investment in manufacturing.

That is a possibility worth noting, but I’m not actually too worried myself — even if the tax credit is allowed to expire, solar is, regardless of incentives, becoming more and more attractive. SolarCity seems to be in a pretty good place to my eyes (for the time being anyways).

Image Credit: SolarCity 
 





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About the Author

James Ayre'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.



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