Tesla, Panasonic to make solar cells in Buffalo, N.Y.

File photo of Elon Musk, CEO of Tesla Motors Inc. (AP Photo/Marcio Jose Sanchez, File) File photo of Elon Musk, CEO of Tesla Motors Inc. (AP Photo/Marcio Jose Sanchez, File) Photo: Marcio Jose Sanchez Photo: Marcio Jose Sanchez Image 1 of / 1 Caption Close Tesla, Panasonic to make solar cells in Buffalo, N.Y. 1 / 1 Back to Gallery

Japanese electronics company Panasonic and U.S. electric carmaker Tesla said Tuesday that they plan to begin production of solar cells at a factory in Buffalo, N.Y.

The two companies said they reached an agreement calling for Panasonic, based in Tokyo, to pay capital costs for the manufacturing. Palo Alto’s Tesla made a “long-term purchase commitment” to Panasonic.

Their companies gave no financial figures.

The agreement builds off an existing relationship between Tesla and Panasonic, which includes making lithium-ion battery cells for electric vehicles and solar storage at Tesla’s $5 billion Gigafactory being built outside Reno, as well as developing next-generation technology at Tesla’s expanding plant in Fremont.

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The factory in Buffalo is under development by SolarCity Corp., the San Mateo, solar panel company that was recently acquired by Tesla. The photovoltaic cells and modules will be used in solar panels for non-solar roof products and solar glass tile roofs that Tesla plans to begin making, the companies said.

Tesla Chief Executive Officer Elon Musk was chairman of SolarCity and a major investor in both companies.

Production at the Buffalo factory is due to begin in mid-2017.

New York state has committed $750 million to build and outfit the plant at Buffalo’s RiverBend site, the centerpiece of Democratic Gov. Andrew Cuomo’s program designed to revitalize the upstate region’s largest city.

SolarCity has committed to investing $5 billion over 10 years in New York, hiring almost 1,500 workers at the Buffalo plant for five years and employing at least 2,000 more people across New York in exchange for use of the state-owned plant.

In October, when word emerged about the possible manufacturing collaboration, the head of New York’s economic development agency said SolarCity will be held to job creation promises made when the state committed funding to build and outfit the plant, which is expected to begin production next summer.