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SolarCity accused of stealing panel technology


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SolarCity accused of stealing panel technology

Last October, SolarCity Corp. unveiled what it said was the mostefficient rooftop solar panel, a breakthrough that the developer attributed, inpart, to a manufacturing technique known as "shingling."

The announcement, which followed the company's of modulemanufacturer SilevoInc., thrustSolarCity into an arms race for solar efficiency.

"What's really beenamazing about working with this labor team is it's way better than we thoughtit was going to be," Peter Rive, SolarCity's chief technology officer,told investors in December 2015."Originally, we thought we're going to get this amazing kind of celldevice structure, we're going to have a great solar cell. But as it turns out,the team has incredible competency in building module-based technologies aswell."

But according to a lawsuitfiled Sept. 26 by CogenraSolar Inc., a subsidiary of , SolarCity's panel technology was a product of theft,not ingenuity.

"It was only by misappropriating Cogenra's proprietarytechnology, including its trade secrets and other intellectual property, thatSolarCity and Silevo were later able to announce a claim that they set a newworld record for solar panel energy efficiency," Cogenra wrote in acomplaint it jointly filed with Khosla Ventures III LP, its onetime majorityshareholder, in U.S. District Court for the Northern District of California.

According to the complaint, SolarCity got its hands on theproprietary information after Cogenra sent Silevo a preliminary purchase orderand technical specifications for the design of its shingled solar cells inJanuary 2013. SolarCity bought Silevo in June 2014.

"Silevo did not have the technical capabilities orindependent know-how to produce a shingled-cell solar module," Cogenra andKhosla Ventures said.

SolarCity said the lawsuit is "meritless," andthat it was filed as a diversion after SolarCity discovered that its ownconfidential information was stolen by a former employee who went to work forSunPower.

"Cogenra's complaint fails to identify any actual tradesecret that Cogenra owns, much less that SolarCity supposedlymisappropriated," the company said in a statement. "As SunPowerknows, numerous companies, like SolarCity, have independently developed theirown solar technology and have no need for Cogenra. Before Cogenra filed thislawsuit, we told them and SunPower that SolarCity independently developed itsown technology without Cogenra and offered to show them our evidence."

A SunPower spokeswoman did not immediately respond to arequest for comment on Sept. 27. SunPower and Khosla Ventures told BloombergNews that SolarCity's statement "is false."

SolarCity is the target of a proposed takeover by electricvehicle and energy storage manufacturer Tesla Motors Inc. The deal was panned as a bailoutorchestrated by Elon Musk, the chairman of both companies, by investors who aresuing to block theacquisition.