SolarCity's factory in upstate New York, at the "topping off" ceremony.
Photo credit to LPCiminelli, the project’s construction manager.
By Katie Fehrenbacher
October 2, 2015

SolarCity’s transition into a company that makes its own solar panels is getting ever closer.

On Friday morning the solar panel installer and financier announced that it would start making highly efficient solar panels on a pilot line in Fremont, Calif., later this month.

Over a year ago, SolarCity announced that it planned to acquire a solar manufacturing startup called Silevo. Over the past year SolarCity has taken that core technology from Silevo and optimized it, said a company spokesperson.

The result is that SolarCity’s new solar modules, which make up a solar panel, will be able to convert about 22% of the sunlight that hits them into electricity. The company says these high efficiency modules will deliver the world’s most efficient rooftop solar panel. Other companies that make high efficiency solar panels, like SunPower, are delivering efficiencies in the same range.

Photo courtesy: Getty Images

SolarCity’s new solar panels will only be made in small amounts for now at its new facility in California, which previously housed infamous solar maker Solyndra. Solyndra, which made cylindrical-shaped solar panels, raised funds from venture capitalists and received a loan from the Department of Energy, but later went bankrupt.

Now that sprawling factory will produce panels from the largest solar installer in the U.S. as SolarCity looks to vertically integrate its business. The strategy behind the manufacturing move is that SolarCity can lower its costs if it can make, install, and finance its own panels. The company also doesn’t have to depend on other companies as suppliers.

Eventually SolarCity (SCTY) plans to make its panels in much larger volumes at a huge factory under construction in Buffalo, New York. The company will initially start making the panels in New York in 2016, and grow its factory output in 2017.

SolarCity plans to use these initial panels—made in limited quantities—in potentially space-constrained installations. Most SolarCity customers won’t be able to buy the panels from the company directly right now, but SolarCity will use them on a project by project basis until it has more available.

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