Tesla has inked a deal with Panasonic for the manufacturing of solar panels. Under the agreement, panels would be made at the new SolarCity factory in Buffalo. However, the deal is contingent upon the successful merger of SolarCity and  Tesla. Both companies already work together to build batteries at the Gigafactory in Nevada.

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The new potential deal involves the manufacturing of photovoltaic modules and cells. Tesla said that it plans to sell photovoltaic module as part of a solar energy system consisting of Powerpack and Powewall. Tesla is looking to introduce the new integration of Powerwall 2.0 battery storage systems and SolarCity panels.

Tesla's CTO JB Straubel said the companies would work together to develop more efficient and reliable solar modules and cells at the best cost. The non-binding letter of intent between the companies calls for the development of cells for Powerwall and Powerpack, Tesla's stationary power units.

Tesla has not provided the financial details of the deal. It is also not clear whether Panasonic will eventually buy the Buffalo factory. The facility is still under construction. However, the pact will see Tesla making a long term commitment to buy the cells developed at the facility.

Tesla is currently looking to finalize its deal with SolarCity, which will see a merger of both companies. The deal is yet to be ratified by Tesla shareholders. The voting is likely to take place next month.