SolarCity executives say the all-stock deal potentially worth $350m was driven by the pressing need to make solar cost-competitive without subsidies versus fossil fuel electricity on the grid, and growing concern that the company’s spectacular growth could be stunted by future module supply shortfalls.

“It’s critical you have high efficiency solar panels at a total installed cost as low as possible,” SolarCity chairman and largest shareholder Elon Musk said on a conference call.