SolarCity shares jump on Silevo acquisition plans

Should investors be excited about this deal, or stay away?

By Motley Fool Jun 19, 2014 6:24PM
Shares of solar power company SolarCity (SCTY) jumped big time Wednesday after the company said it would be acquiring Silevo, a solar-panel maker. With this acquisition, SolarCity will be able to manufacture its solar panels rather than leasing them as it currently does, which could be very beneficial for its bottom line.

According to Motley Fool analyst Simon Erickson, SolarCity used to buy solar panels overseas, ship them to the U.S., and then install them on rooftops here -- a very expensive endeavor. This acquisition will allow SolarCity to cut out the middle man and increase the company's efficiency. And it doesn't hurt that SolarCity will be manufacturing those panels in Buffalo, N.Y., creating plenty of jobs there.
But is all that enough for investors to jump into SolarCity today? According to Simon, SolarCity is definitely a buy, and has been for a few months on the Motley Fool's Rulebreaker scorecard. Image: Solar panel © Russell Illig/PhotoDisc/Getty Images

The company hopes to reach 1 million customers by 2018, and the acquisition of Silevo brings SolarCity one step closer to reaching that goal.

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