Tesla finalizes agreement with Panasonic to manufacture solar cells from Buffalo, NY factory

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Tesla will incorporate Panasonic cells into glass solar roof tiles when production begins in summer 2017

Tesla announced today that it has finalized an agreement with Panasonic that would allow both companies to begin manufacturing high-efficiency photovoltaic (PV) cells and modules from its Buffalo, NY factory. The update comes months after Tesla first announced that it had entered into a non-binding letter of intent with Panasonic under which the two companies would collaborate on the manufacturing and production of PV cells and modules. However, the agreement was only valid upon shareholders’ approval of Tesla’s acquisition of SolarCity – a deal that saw an overwhelming majority of voters approving the merger.

Tesla and Panasonic will initially build PV cells and modules for use in traditional solar panels, but will eventually incorporate Panasonic cells into Tesla’s Solar Roof product when production begins mid-2017. The PV cells will be integrated directly into the glass solar roof tiles which Tesla is offering in a variety of designs.

RECOMMENDED READ: How much will the Tesla Solar Roof cost?

As part of Tesla CEO Elon Musk’s vision of the future, largely comprised of sustainable transportation and storage systems for renewable energy, Tesla’s solar products will be integrated with Panasonic cells and operate seamlessly with the company’s home and commercial energy storage products, Powerwall and Powerpack. Tesla indicates that it has plans to ramp up to 1 Gigawatt of PV module production by 2019.

Today’s announcement also reaffirms Tesla’s commitment to creating American-based jobs at Buffalo, NY, home to SolarCity’s solar factory. We had previously reported that SolarCity has begun holding workforce information sessions as the company prepares to hire nearly 1,400 workers for its $900 million solar factory located at Riverbend.

Expect to see more announcements from Tesla as it continues to fortify its long-standing partnership with Panasonic. Panasonic is an investor and strategic partner at the Gigafactory in Sparks, Nevada where it manufactures cylindrical 18650 and 2170 lithium-ion cells used in Tesla’s fleet of vehicles and grid storage products.

Panasonic has agreed to cover capital costs required at the Buffalo, NY solar factory. In exchange, Tesla will continue on its long-term purchase commitment from Panasonic, namely, an extension into the purchase of Panasonic PV cells.

Read Tesla’s full announcement below:

Tesla and Panasonic have finalized an agreement this week to begin the manufacturing of photovoltaic (PV) cells and modules at the Buffalo, NY factory. These high-efficiency PV cells and modules will be used to produce solar panels in the non-solar roof products. When production of the solar roof begins, Tesla will also incorporate Panasonic’s cells into the many kinds of solar glass tile roofs that Tesla will be manufacturing. All of these solar products will work seamlessly with Tesla’s energy storage products, Powerwall and Powerpack. Production of the first PV modules will begin in summer 2017, and will ramp to 1 Gigawatt of module production by 2019.

As Tesla and Panasonic begin production, Buffalo will continue to expand Tesla’s American manufacturing base and create thousands of new jobs in the coming years. Tesla reaffirms SolarCity’s commitment to create over 1,400 jobs in Buffalo—including more than 500 manufacturing jobs. Panasonic, with its technological and manufacturing expertise in PV production, will also work with Tesla on developing PV next generation technology at SolarCity’s facility in Fremont, CA.

As part of the agreement, Panasonic will cover required capital costs in Buffalo and Tesla is making a long-term purchase commitment from Panasonic. The collaboration extends the established relationship between Tesla and Panasonic, which includes the production of electric vehicle and grid storage battery cells at the Tesla Gigafactory.