Solar panel installer Solar City is accepting Tesla Motor Corporation's US$2.6 Billion bid to buy the company and merge the two into a global, carbon-free energy and transportation powerhouse.

That's about half of what Solar City was worth just a year ago, before its slowing growth, complex financial structure, and fears that government support of rooftop solar could face more opposition.

Solar City shares dropped seven percent upon the news, and Tesla shares closed two percent lower.  Credit rating agency Standard & Poors put Tesla's credit ratings on CreditWatch with negative implications "to reflect the significant risks related to the sustainability of the company's capital structure following the proposed transaction".

But the merger makes sense from the perspective of Tesla chief Elon Musk, who revealed an ambitious plan for electric cars, trucks, and buses at least partially juiced up by rooftop solar power.  Tesla expects the transaction to produce US$150 million in cost synergies in the year after the deal closes.  The company wants to kick-back some of these synergies to consumers and make clean energy more accessible.