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SolarCity to Build PV 'Gigafactory' in Buffalo

Words by Andrew Burger
Investment & Markets
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Perhaps no two companies have made a bigger splash -- or more clearly demonstrated the potential of clean technology to revitalize manufacturing, create jobs and spur “green” growth of the U.S. economy -- than Elon Musk's Tesla Motors and SolarCity.

Hot on the heels of Tesla announcing it will build its lithium-ion battery 'Gigafactory' in Nevada, New York Gov. Andrew Cuomo announced a groundbreaking ceremony for an equally massive SolarCity facility in Buffalo. The manufacturing plant will devote 1.2 million square feet to produce solar photovoltaic (PV) cells, the governor announced Sept. 23.

"Gov. Cuomo shares our view that the United States can return to its place atop the world in advanced technology manufacturing,” SolarCity CEO Lyndon Rive was quoted in a press release. “Thanks to the governor’s leadership, we will be able to quintuple the output capacity and economic impact of Silevo’s original commitment. I couldn’t be more excited to partner with the state to make Western New York a global capital for clean energy development."

Vertical integration; supply chain diversification


SolarCity announced it would acquire Silveo, a manufacturer of high-performance solar PV cells and modules, this past June. The acquisition was viewed as a means for SolarCity to integrate vertically by expanding upstream into solar PV manufacturing.

Though Silveo calls Fremont, California home, its manufacturing operations are located in Hangzhou, China. Nonetheless, the acquisition was also seen as way for SolarCity to diversify sourcing of the solar panels used in its main line of business – third-party leasing and installation of residential PV systems.

SolarCity sources most of its PV panels from Chinese manufacturers, such as Trina and Yingli Solar, whose panels have become more expensive in the U.S. following successive import duties and tariffs imposed by U.S. government authorities for violation of international fair trade rules.

SolarCity's PV 'Gigafactory' in Buffalo

SolarCity said it will invest $5 billion to build the solar PV manufacturing facility in Buffalo. New York has pledged $759 million to support the project, much of which is expected to take the form of cheap electrical power from Niagara Falls, the Times-Union reported.

Expected to come online and begin manufacturing in high volume as early as the first quarter of 2016, SolarCity's investment in the Buffalo plant is projected to create more than 1,450 direct manufacturing jobs. Another 2,000 workers will provide solar services over the next five years, according to the news release from Gov. Cuomo's office.

“We said four years ago that we have to change the mentality of Buffalo, and every day since we have been working hard to continue this new energy and momentum in Western New York. Less than a year after announcing our original plan, one of the leading solar companies in the world is coming on board and making this the largest advancement for Buffalo's economy in a generation,” Gov. Cuomo proclaimed.

“This is bigger than anything we could have imagined. It is the perfect metaphor for Buffalo, where the fundamental strength was the available hydropower. That hydropower now, that renewable energy now, will fuel the renewable energy industry for the future. I am incredibly proud that the state is playing a role in this project, because Buffalo’s future is New York’s future, and today that future is brighter than ever.”

*Image credits: 1) SolarCity; 2) Niagara Falls State Park