NEW YORK (TheStreet) --Advisory firm Institutional Shareholder Services officially gave the nod to the proposed $2.3 billion Tesla,  (TSLA) SolarCity (SCTY) merger on Friday. Tesla CEO Elon Musk appeared on CNBC's "Squawk Alley" to discuss the advantages of combining the two companies.

"If you stand back and look at this from a macro standpoint, we really want a future where all cars are electric, where all power is sustainable and clean," Musk said.

He noted that a majority of the clean energy will stem from the power of the sun, however, because the sun does not consistently shine over one particular area all day, energy needs harnessing.

"You need batteries to store the electricity. So if you have solar panels, batteries, and electric cars you have a complete solution to a sustainable energy future," Musk stated.

However, if any one of the above pieces is missing the equation is thrown off and rendered inefficient.

"It's critical that all three pieces are there because I think that's the future we as humanity want," Musk noted.

Shares of both Tesla and SolarCity were advancing in midday trading on Friday.

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