While discussing potential improvements in manufacturing efficiency with Tesla investor Ron Baron at his conference in New York today, Tesla CEO Elon Musk said that under Tesla and with the new partnership with Panasonic, SolarCity’s “solar Gigafactory” in Buffalo (pictured above) could produce up to 10 GW/year of solar products – up from the previous 1 GW/year of planned production.

Musk said that Tesla would apply its preferred approach to manufacturing based on physics first principles. He also explained that the combination of Panasonic’s high-efficiency cells with SolarCity’s inexpensive manufacturing for a similar but slightly less efficient solar cell could yield more output.

Of course, Tesla also recently revealed its solar roof products, which he said will also be produced at the plant alongside regular high-efficiency solar modules, and will contribute to the order of magnitude increase in the factory’s output.

Musk is not new to making ambitious predictions and this one is without a doubt one of his most ambitious. At 10 GW per year, we are talking about the equivalent of some of the world’s largest power plants being deployed in solar power capacity at a single factory every year.

Like a factory manufacturing large power plants at a rate of 2 or 3 per year.

They expect to start production at the 1.2 million-square-foot factory in 2017.

The state of New York invested $750 million in the plant, which it actually owns and rents to SolarCity at virtually no cost, but the company has to heavily invest in hiring locally to staff the plant and its whole operations in New York.

Now those responsibilities will transfer to Tesla if the merger is approved, and partly to Panasonic with their new agreement with Tesla to produce solar cells at the plant.

As we previously reported, the deal is very similar to what Tesla and Panasonic already have for batteries at the Gigafactory in Nevada. Panasonic manufactures the battery cells, which it developed in partnership with Tesla, and sells them to Tesla to make battery packs.

Now if you replace the battery packs by solar modules and battery cells by solar cells, the agreement is very similar to the one for the Buffalo plant. Of course, everything is contingent on the merger between Tesla and SolarCity being approved by shareholders.

SolarCity took over the plant from the state of New York just a few weeks ago and it is now installing production equipment. After the vote on the merger on November 17, we should get a better idea of the manufacturing plans for the factory under the new combined company and through the new partnership with Panasonic.

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