The deal, announced Tuesday by the dominant installer of solar panels on U.S. homes, will be the first step in SolarCity’s plans to build more such panel factories in anticipation that the industry will continue to grow, said a blog post on the deal written by Musk, and SolarCity co-founders Peter Rive and Lyndon Rive.
“We absolutely believe that solar power can and will become the world’s predominant source of energy within our lifetimes, but there are obviously a lot of panels that have to be manufactured and installed in order for that to happen, ” Musk said in the blog post.
While this may not seem a prudent investment since there is an excess of companies supplying panels, Musk said. Many of its rivals are producing lower efficiency solar cells, Musk said, “at uncompelling costs” and SolarCity wants to expand supply of better quality equipment.
“Without decisive action to lay the groundwork today, the massive volume of affordable, high efficiency panels needed for unsubsidized solar power to outcompete fossil fuel grid power simply will not be there when it is needed, ” Musk said.
Serial entrepreneur Musk made his fortune as a co-founder of PayPal, which was acquired by e-commerce giant eBay in 2002. Musk used his profits from the sale to fund rocket ship company Space Exploration Technologies in 2002. Musk founded Tesla in 2003 and solar energy company SolarCity in 2006.
Prices for solar energy are dropping as the national average cost for installing a solar panel system shrank by 15 percent in 2013 compared with 2012, according to research by the Solar Energy Industries Association and GreenTech Media. This helped the solar industry grew 41 percent in 2013 compared with 2012, the trade association report added. During that time solar power accounted for 29 percent of all new electricity generation, increasing from 10 percent in 2012, the report said.
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