We currently make around 1 TW of photovoltaic cells per year, globally. The proposal here is to launch that much to space every 9 hours, complete with attached computers, continuously, from the moon.
edit: Also, this would capture a very trivial percentage of the Sun's power. A few trillionths per year.
>just use even more solar panels
I think it's because at this scale a significant limit becomes the global production capacity for solar cells, and SpaceX is in the business of cheaper satellites and launch.