NEW YORK (TheStreet) -- The solar industry is getting smaller, and that's just what it needs to grow, say investors.
SolarCity (SCTY) announced plans this week to acquire solar panel manufacturer Silevo for about $200 million with earn-outs of an additional $150 million based on volume and cost targets. The news comes just two weeks after First Solar (FSLR) announced it would acquire Skytron-Energy, a subsidiary of AEG power that provides utility-scale photovoltaic management systems.
Until now, SolarCity had only dealt in the installation of partner solar panels. The move will cut out the middleman for the solar panel installer founded by Tesla CEO Elon Musk and cousins Peter Rive and Lyndon Rive. And it could spark further consolidation in the industry.
In a blog post, SolarCity's founders said that they plan to build a manufacturing plant in upstate New York capable of producing more than a gigawatt of energy within the next two years. They also said that they may acquire more solar panel manufacturers in the future. "Our intent is to combine what we believe is fundamentally the best photovoltaic technology with massive economies of scale to achieve a breakthrough in the cost of solar power," they wrote. "Although no other acquisitions are currently being contemplated, SolarCity may acquire additional photovoltaics companies as needed to ensure clear technology leadership and we plan to grow internal engineering significantly."