Tesla Motors Inc. (TSLA - Analyst Report) has offered to buy SolarCity Corp. (SCTY- Snapshot Report) in a $2.8 billion deal that would combine the two companies, both of which funded and driven by the Los Angeles billionaire Elon Musk. The deal is, however, subject to approval of “a majority of disinterested stockholders” of both companies.

This all-stock bid valued SolarCity at $26.50 to $28.50 per share, a premium of roughly 21% to 30% over SolarCity’s closing price of $21.19 on Tuesday.

These two companies are exorbitant cash burners as they strive to expand their portfolios. SolarCity is a San Mateo, CA, provider of solar power systems for homes, businesses and governments, while Tesla is a Palo Alto, CA, maker of electric cars and residential energy storage systems.

How Good is the Bid?

The potential acquisition aims to create a company, with all products uniformly renamed “Tesla”. This would involve the integration of SolarCity’s solar panel installation and leasing business to Tesla’s electric cars, battery manufacturing and electricity storage. Though the transaction will make Tesla an “integrated sustainable energy company,” one cannot ignore the huge risk that the electric car maker is taking on considering its already strained finances. SolarCity after all has been an unprofitable operation with mounting expenses.

The news pushed SolarCity shares up about 14.72% to $24.31 in after-hours trading yesterday, while shares of Tesla plunged 12.23% to $192.75, amounting to an erosion of about $4 billion, more than the value of the offer.

Investors feared that the addition of the money-losing company would exert further pressure on Tesla's balance sheet, thereby deviating Tesla’s management from its goals. Then again, Musk, who is also the CEO and founder of privately held Space Exploration Technologies, or SpaceX, is one of the busiest CEOs in corporate America. Hence, the integration will diminish his task from minding two publicly traded entities to one bigger player, freeing up more time to be devoted to Tesla.

On the other hand, SolarCity in a regulatory filing highlighted that the company would evaluate the offer carefully, with CEO Lyndon Rive telling employees "there are tremendous synergies between these two companies."

This leading U.S. residential solar installer has been struggling with its stock down more than 58% year to date after incurring four successive quarters of losses. The company’s rising expenses and repeated losses have stirred investor concern over its business model.

The debate about the practicality of such a merger between kindred companies situated about 17 miles apart in Silicon Valley will continue until the market sees its palpable outcome. Musk however expressed confidence that Tesla will end up owning SolarCity. "This is something that should happen," he said. "It's a no-brainer."

Solar Plays sans SolarCity

Now that Tesla is in all probability buying SolarCity, where should investors go for a pure play solar company?

We have here picked three Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) solar companies that are making the green push to transform the world.Given the favorable climate for renewable stocks on the heels of an improving oil market, investors would do well to add these solar stocks to their portfolio.

China-based ReneSola Ltd. (SOL - Analyst Report) manufactures and sells solar wafers and related products to both Chinese and international PV cell and module manufacturers.

ReneSola has made noticeable improvement in transforming itself from a solar product manufacturer to a multi-faceted participant across the green energy value chain. The company has been able to cut net losses significantly. In fact, it swung into profit in the first quarter of 2016 from a loss incurred in the year-ago period.

The company has surpassed earnings estimates in all of the last four quarters with an average beat of 232.89%. The company currently has a Zacks Rank #1 and has seen positive earnings revisions for the quarter ending Jun 2016 as well as for 2016.

Headquartered in Seoul, South Korea, Hanwha Q CELLS Co., Ltd. (HQCL -Snapshot Report) produces PV cells, PV modules, silicon ingots, and silicon wafers in the U.S., Europe, South Korea, Japan, the People’s Republic of China, India, Turkey, and internationally.

This Zacks Rank #1 stock has reported first-quarter 2016 profit of 33 cents per share, reversing its year-ago loss of 25 cents. The company has been able to boost its gross margin (up 670 basis points year over year) along with cutting operating expenses (down 20.3%).

Strategic initiatives to improve the capital structure and careful investments are likely to fuel growth ahead.

Estimates are moving north, with 2016 earnings expected to register a whopping 394.12% growth. Over the last 60 days, estimates for the year have gone up 25.4% from $1.34 to $1.68.

Shares of the Chinese solar manufacturer Yingli Green Energy Holding Co. (YGE - Snapshot Report) grew by about 19% in the last one month. The company reversed its string of losses to register a profit in its recently released first quarter of 2016 fueled by gross margin expansion of 590 basis points year over year.

This Zacks Rank #2 stock’s estimates have narrowed to a loss of $1.71 from a loss of $3.54 over the last 7 days.