Elon Musk is at it again, this time with clean, renewable energy. Just yesterday, he announced that Solar City (the solar installation company that he chairs) plans to acquire a startup called Silevo. This producer of high-efficiency panels was acquired for $200 million (plus up to $150 million more if the company meets certain goals), and Musk now plans to build a huge factory to produce their panels as part of a strategy that will make solar power “way cheaper” than power from fossil fuels.
Solar City is one of the country’s largest and fastest-growing solar installers, largely as a result of its innovative business model. Conceived by Musk as another cost-reducing gesture, the company allows homeowners and businesses to avoid any up-front cost. If its plans pan out, it will also become a major manufacturer of solar panels, with by far the largest factory in the U.S.
The acquisition makes sense given that Silevo’s technology has the potential to reduce the cost of installing solar panels, Solar City’s main business. But the decision to build a huge factory in the U.S. seems daring – especially given the recent failures of other U.S.-based solar manufacturers in the face of competition from Asia. Ultimately, however, Solar City may have little choice, since it needs to find ways to reduce costs to keep growing.
Silevo produces solar panels that are roughly 15 to 20 percent more efficient than conventional ones thanks to the use of thin films of silicon – which increase efficiency by helping electrons flow more freely out of the material – and copper rather than silver electrodes to save costs. Higher efficiency can yield big savings on installation costs, which often exceed the cost of the panels themselves, because fewer panels are needed to generate a given amount of power.
Silevo isn’t the only company to produce high-efficiency solar cells. A version made by Panasonic is just as efficient, and SunPower makes ones that are significantly more so. But Silevo claims that its panels could be made as cheaply as conventional ones if they could scale their production capacity up from their current 32 megawatts to the factory Musk has planned, which is expected to produce 1,000 megawatts or more.
The factory plan mirrors an idea Musk introduced at one of his other companies, Tesla Motors, which is building a huge “gigafactory” that he says will reduce the cost of batteries for electric cars. The proposed plant would have more lithium-ion battery capacity than all current factories combined. And combined with Musk’s release of the patents, which he hopes will speed development, it is clear Musk has both eyes on making clean technology cheaper.
Not sure, but I think it’s fair to say Musk just became my hero! Not only is he all about the development of grand ideas, he is clearly willing to sacrifice profit and a monopolistic grasp on technologies in order to see them come to fruition.