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On Tuesday, Tesla unveiled grand plans to acquire America’s biggest residential solar installer, SolarCity. Their vision: to create “the world’s only vertically integrated energy company offering end-to-end clean energy products.”

We’ve heard this before. That strategy bankrupted another overly ambitious clean energy leader, SunEdison, after it made a $2.2 billion bid for the residential solar company Vivint Solar.

But could it work for Tesla and SolarCity?

After markets closed Tuesday evening, Tesla’s board made an offer to buy SolarCity for between $26.50 to $28.50 per share, valuing the deal at roughly $2.5 billion. The two companies have a close business relationship—both through partnerships and family/boardroom ties—and now Elon Musk wants to make solar as important for Tesla as electric cars and batteries.

“This is something we’ve been thinking about and debated for many years,” Musk said in a call detailing the proposed acquisition. “It’s the right timing because Tesla is wrapping up its activities with battery storage and SolarCity is getting ready to release some exciting products.”

Investor reaction to the timing was mixed. Tesla’s stock dropped more than 12 percent in after-hours trading; SolarCity’s stock rose more than 15 percent. In order for the acquisition to close, Tesla and SolarCity shareholders will need to approve it once negotiations and due diligence are completed. 

In the meantime, shareholders will be asking a lot of questions about the long-term value of the deal. Below are some of the benefits and potential drawbacks of a Tesla-SolarCity marriage.

Tesla gets to buy SolarCity at a discount.

Solar stocks have been hit hard in 2016. SolarCity’s stock is down nearly 60 percent from the start of the year. Even after paying a premium of 21 percent to 30 percent per share, Tesla’s acquisition would come at a good time. Tesla’s stock is strong, and the company now has an opportunity to buy a solar company with consistent cash flows on the cheap. 

SolarCity could expand through retail outlets.

Tesla became the first automaker to develop direct-to-customer retail outlets. It now wants to do the same for solar.

SolarCity has a customer acquisition problem. While the cost of solar equipment continues to drop, the solar installer’s cost to find new customers is increasing. Assuming Tesla and SolarCity can figure out how to sell solar in retail stores, they could potentially tap a new class of customers.

Tesla explained its thinking in a blog post on the deal: “We would be able to expand our addressable market further than either company could do separately. Because of the shared ideals of the companies and our customers, those who are interested in buying Tesla vehicles or Powerwalls are naturally interested in going solar, and the reverse is true as well. When brought together by the high foot traffic that is drawn to Tesla’s stores, everyone should benefit.”

Tesla wants to make solar as desirable as the Model 3.

Tesla knows how to make desirable products—both through sleek design and marketing prowess. When Tesla started taking preorders for the Model 3 (a car that isn’t even in production yet), nearly 400,000 people shelled out $1,000 each just to get on a waiting list. And last May, after building up hype for its Powerwall home battery system, the company said it had received tens of thousands of preorders. Tesla was able to make a box mounted on a wall seem cool. 

Tesla hinted at developing a similar strategy for solar—possibly by redesigning rooftop systems.

“We would be able to maximize and build on the core competencies of each company. Tesla’s experience in design, engineering, and manufacturing should help continue to advance solar panel technology, including by making solar panels add to the look of your home.”

Tesla could help SolarCity expand its international reach.

Last August, SolarCity moved into Mexico by acquiring a local developer—its first attempt to grow internationally. But its attempts to expand into Latin America have so far fallen flat. 

Meanwhile, Tesla has been (relatively) more successful selling cars and home batteries around the world, primarily in Europe and Asia. As Tesla broadens its international reach, SolarCity could benefit from expansion of retail stores, or ramp up its solar-plus-storage offerings in markets like Australia or Germany where Tesla is already offering the Powerwall.

Tesla has plans to sell you a full-service energy package.

Tesla is looking to do it all. Elon Musk has a strong vision for electric cars and solar—he wants to slash fossil fuel consumption and give people energy autonomy. In order to do that, Musk believes that SolarCity needs to be fully integrated into Tesla, not just a partner.

The company articulated this vision: “It’s now time to complete the picture. Tesla customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that’s available: the sun.”

The market is starting to move in this direction. A lot of companies, including automakers, are trying to link electric cars, batteries, solar and smart home devices together into one package—with limited success. These packages are being offered at a pilot scale, largely through joint ventures and ad-hoc partnerships. There isn’t any clear evidence that Tesla could suddenly break open this segment. (Although Musk has always been the kind of executive interested in tackling problems that no one else has figured out.)

Which brings up a couple of big questions. 

Is this kind of aggressive expansion a good strategy for Tesla?

Tesla is already managing a lot. It is simultaneously building a massive battery factory, scaling up to meet high demand for the Model 3, attempting to grow its stationary battery business, and expanding into markets all over the world. Buying SolarCity—a company also trying to build its own solar manufacturing facility in New York — adds yet more complexity. 

Recent experience would suggest this kind of expansion is fraught with risk. After SunEdison unveiled plans to buy up Vivint Solar last July, shareholders balked at the move — sending the company’s stock into a tailspin. SunEdison took on too much debt and expanded far beyond its core development business. Investors hated the deal. And now SunEdison has paid the ultimate price: bankruptcy.

There are arguably a lot of good reasons for Tesla and SolarCity—already very close partners—to align their strategies as part of the same company. Tesla isn’t leveraging itself the way SunEdison did during its acquisition spree (athough it may take on $2.8 billion in debt with the deal). But Tesla does face potential backlash from shareholders worried about the direction of the company. 

“We expect a robust shareholder fight over this acquisition, centered on corporate governance,” wrote analysts at Oppenheimer Research, who downgraded Tesla.

Why would Tesla need SolarCity anyway?

In terms of financial strength, SolarCity needs Tesla more than Tesla needs SolarCity. The deal certainly doesn’t make it easier for Tesla to turn a profit. 

And it’s not clear how buying SolarCity gives Tesla a major advantage in distributed energy. The company’s stationary battery business is doing well, and it’s developed a lot of partners in the field that are selling and installing Powerwalls. There’s certainly an allure to the vision of providing an all-in-one energy and electric car package—but Tesla and SolarCity were already partnering closely on developing those offerings. 

When Tesla unveiled its home battery last May, the company described itself in sweeping terms: “Tesla is not just an automotive company; it’s an energy innovation company.” Elon Musk is taking another step toward his long-time vision of a world powered by solar. Will investors go along with it?

This story was originally published by Greentech Media and is republished with permission.