SpaceX and Tesla are independently working toward building up to 100 GW per year of solar photovoltaic manufacturing capacity in the United States within the next three years, according to Elon Musk, who made the remarks during a discussion at the World Economic Forum in Davos.
Musk said the renewed focus on solar energy is driven primarily by the rapid growth in artificial intelligence, which is placing unprecedented demand on electricity systems. While the cost of AI technologies is falling quickly, Musk argued that energy availability is becoming the main constraint on further expansion.
He described solar power as a low cost and highly scalable solution that requires relatively limited land. Pointing to China, Musk said large scale solar manufacturing and deployment is achievable, noting the country’s dominance in global solar supply chains. However, his comments overstated China’s annual deployment levels, which officially reached just over 315 GW in 2025, despite significantly higher manufacturing capacity.
According to Musk, solar growth in the United States and Europe has been comparatively slow due to extremely high tariff barriers on imported panels. These trade measures, he said, have artificially increased the cost of solar projects, prompting a strategic push to localise large scale manufacturing in the US.
At SpaceX, interest in solar extends beyond Earth. The company is exploring the use of solar power in space through plans to deploy up to one million solar powered AI satellites. SpaceX has submitted an application to the US Federal Communications Commission seeking approval for the project. The proposal highlights near constant solar generation in space, with lower operating and maintenance costs and a smaller environmental footprint than terrestrial data centres.
Tesla’s involvement in solar dates back to its 2016 acquisition of SolarCity, which aimed to combine rooftop solar with battery storage for residential customers. Despite launching products such as Solar Roof and solar inverters, Tesla’s solar deployments declined for several years.
Tesla has now begun producing rooftop solar panels at its Gigafactory New York in Buffalo, with an estimated annual capacity of around 300 MW. The new panels carry a 25 year warranty, with first customer deliveries expected in early 2026.
Tesla rooftop solar panel. Image credit: Tesla
Tesla has also restarted its residential solar leasing programme, citing rising demand linked to policy changes, including the planned phase out of the 30 percent US residential solar tax credit. During its latest earnings call, the company confirmed that in house panel production in Buffalo marks a shift away from previous reliance on external manufacturers and rebranded products.
Together, the moves by SpaceX and Tesla signal a renewed push toward domestic solar manufacturing as energy demand from AI accelerates and global supply chains remain shaped by trade and industrial policy.
Author: Bryan Groenendaal
January 3, 2026
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