* To pay Silevo $200 mln in shares
* May pay $150 mln more in shares upon meeting targets
* SolarCity shares rise as much as 18 pct
(Adds details from blog post, background)
June 17 SolarCity Corp, the largest
residential solar panel installer in the United States, said it
would buy solar panel maker Silevo to drive down costs.
SolarCity's shares rose 18 percent to $64.77 on Tuesday on
The company, backed by Tesla Motors Inc's founder
Elon Musk, will pay $200 million in shares and an additional
$150 million in shares upon the achievement of certain
milestones, SolarCity said in a regulatory filing. (link.reuters.com/kax22w)
"Given that there is excess supplier capacity today, this
may seem counter-intuitive ..." SolarCity Chairman Musk and
co-founders Peter Rive and Lyndon Rive wrote in a blog.
"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." (blog.solarcity.com/silevo/)
SolarCity has grown rapidly because it allows homeowners to
pay a monthly fee to lease solar panels instead of making a
large upfront payment, but the company's costs have also
escalated with its dramatic growth.
A glut of panels, mostly produced in China, has depressed
prices, but analysts have warned that SolarCity may be affected
by the United States' recently imposed import duties on solar
panels and other related products from China.
The tariff could push up average panel prices to more than
80 cents per watt from about 72 cents, Roth Capital Partners
analyst Philip Shen wrote in a note earlier this month.
This is SolarCity's second acquisition of a solar equipment
maker. The company last October said it will acquire Zep Solar,
a maker of mounting systems for residential solar panels.
SolarCity is in discussions with the state of New York to
build a plant with a capacity to produce more than 1 gigawatt of
panels annually, as planned by Silevo, within the next two
years, according to the blog post.
(Reporting by Swetha Gopinath in Bangalore; Editing by Maju
Samuel and Don Sebastian)