Solar energy provider SolarCity Corp has agreed to accept a $2.6 billion merger deal from Tesla Motors, Inc., creating what the two companies say is “the world’s only vertically integrated sustainable energy company.”

Tesla founder Elon Musk included a possible merger with SolarCity in his “Master Plan, Part Deux,” which he outlined earlier this year.

“[We plan to] create a smoothly integrated and beautiful solar-roof-with-battery product that just works, empowering the individual as their own utility, and then scale that throughout the world. One ordering experience, one installation, one service contact, one phone app,” Musk said in his plan.

“We can’t do this well if Tesla and SolarCity are different companies, which is why we need to combine and break down the barriers inherent to being separate companies. That they are separate at all, despite similar origins and pursuit of the same overarching goal of sustainable energy, is largely an accident of history. Now that Tesla is ready to scale Powerwall and SolarCity is ready to provide highly differentiated solar, the time has come to bring them together.”

In its more recent announcement, Tesla said that the it expects the merged companies to achieve cost synergies of $150 million within the first full year.

“We also expect to save customers money by lowering hardware costs, reducing installation costs, improving our manufacturing efficiency and reducing our customer acquisition costs,” the Tesla team said. “We will also be able to leverage Tesla’s 190-store retail network and international presence to extend our combined reach.”

While board members of both companies have approved the deal, Tesla says that “it isn’t the finish line,” and the merger still has a few hurdles ahead of it. The move will still need to be voted on by a majority of the two companies’ shareholders, and the merger will need regulatory approval and “other closing conditions.” According to Tesla, SolarCity also has a 45-day period ending September 14 during which it can solicit alternative proposals.

Tesla says that it expects the merger with SolarCity to be finalized by the fourth quarter of 2016.

Photo by NAVFAC