Tesla and Panasonic have finalized an agreement this week to begin the manufacturing of photovoltaic (PV) cells and modules at the Buffalo, NY factory.

These high-efficiency PV cells and modules will be used to produce solar panels in the non-solar roof products. When production of the solar roof begins, Tesla will also incorporate Panasonic's cells into the many kinds of solar glass tile roofs that Tesla will be manufacturing. All of these solar products will work with Tesla's energy storage products, Powerwall and Powerpack.

Production of the first PV modules will begin in summer 2017, and will ramp to 1 Gigawatt of module production by 2019.

Buffalo will continue to expand Tesla's American manufacturing base. Panasonic will also work with Tesla on developing PV next generation technology at SolarCity's facility in Fremont, CA.

As part of the agreement, Panasonic will cover required capital costs in Buffalo (more than $256 million) and Tesla is making a long-term purchase commitment from Panasonic. The collaboration extends the relationship between Tesla and Panasonic, which includes the production of electric vehicle and grid storage battery cells at the Tesla Gigafactory.

Tesla is working exclusively with Panasonic to supply batteries for its upcoming Model 3, the company's first mass-market car. Panasonic is also the exclusive supplier of batteries to Tesla's Model S and Model X.