SolarCity to move into former Solyndra site

The building that once housed one of the biggest crash and burn stories in Silicon Valley — Solyndra and its tubular rooftop solar panels — will soon be home to another solar panel manufacturing venture. According to a report in the Silicon Valley Business Journal, SolarCity has quietly leased the former Solyndra building in Fremont, California, just two miles from Tesla’s Fremont factory, with plans to grow its new solar panel division there.

SolarCity bought eight-year-old solar panel startup Silevo last Summer for $200 million worth of SolarCity stock, with plans to become a vertically integrated solar company. SolarCity has long financed and installed solar panels, but soon will make its own solar panels, too. That way the company can control its supply chain, and also lower its costs.

Workers inspecting panels in Solyndra's factory in April

Workers inspecting panels in Solyndra’s factory in April 2011

The company intends to make a gigawatt worth of solar panels a year in a one million square foot facility on 88 acres of land in the development park called RiverBend in South Buffalo. Construction has already started on that factory and it’s supposed to be completed in early 2016. The Fremont building will be Silevo’s headquarters and new R&D center.

Silevo makes low cost and high efficiency solar panels, which SolarCity CEO Lyndon Rive called “generation two” panels, at the recent ARPA-E Summit. Silevo developed a new type of solar cell design using silicon (the main material in traditional solar panels) but also combining different materials for other cell components to make a solar cell that’s more efficient.

That Silevo is now moving into the former Solyndra building shows just how far the solar industry has come since Solyndra’s crash in 2011. Since that time four years ago solar panel prices have dropped dramatically, and there was a shakeout in the solar industry, with dozens of solar panel makers declaring bankruptcy and struggling. Even the leading American solar makers like SunPower and First Solar struggled during this period.

SolarCity panels, image courtesy of SolarCity.

SolarCity panels, image courtesy of SolarCity.

But in the past year or two the large solar panel makers have started to do pretty well. First Solar — the U.S. maker of thin solar panels, which is seen as a bellwether for the industry — has been boosting its solar panel production by as much as 46 percent in 2015.

Due to a combination of federal incentives, private markets, and a decade of lowering technology costs, right now you can build a large utility-scale solar panel farm in the U.S. for the cheapest price in history: as low as $1.68 a watt, according to GTM Research. Both utility-scale and rooftop solar projects (called distributed solar) are booming in the U.S. Almost 4 GW of solar panel projects (both utility scale and rooftops) came online in the U.S. in the first three quarters of 2014 (the latest data from SEIA), up from 2.65 GW for the same period in 2013.

SolarCity’s move to Fremont is also interesting to place it next to its partner electric car maker Tesla. Tesla and SolarCity have spent years working together on combining solar panels and batteries to make an energy storage product. Tesla plans to launch a battery for the home market in a month or so, and has already been bidding on RFPs for energy storage with utilities.

Given the rock bottom prices of solar panels, and potential U.S./China trade wars, many are expecting a return to some difficult times for solar panel makers down the road. That’s another reason why SolarCity wanted to control its manufacturing and bring it stateside.

Today in Cleantech

Yesterday was the anniversary of Solyndra’s bankruptcy, and GigaOM’s Katie Fehrenbacher looks back at the recipe that turned Solyndra into a political meme. A year later Republicans are still using the word as a proxy for corruption and the failure of the stimulus package with Paul Ryan mentioning it during his RNC speech. The irony for me is a comment that Chris Beitel, a VP at solar cell startup Silevo made this week. “If Solyndra had built their first pilot line in Asia and then moved into the 300 MW line in the U.S., then they would’ve survived,” Beitel said. Everyone assumes that Solyndra’s failure was a foregone conclusion but looking back I think that reaching economies of scale was actually the problem, and a correctable one (hindsight is 20/20). The key in solar is large scale production to reduce price per watt and a flexible, inexpensive labor force. As a DOE loan recipient, the latter, which would have involved building a plant in China, was impossible. But I’m not convinced that Solyndra’s overall business model was unsalvageable.

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