Continuing its renewable energy investment streak, Google Inc. agreed to put up $280 million to finance rooftop solar panel projects installed by SolarCity Inc., in the internet search giant’s largest biggest clean energy investment to date.
The deal with San Mateo, California-based SolarCity is also Google’s first investment related to distributed residential solar energy, Rick Needham, Google’s director of green business operations, said in a statement.
SolarCity offers sales, installation, financing, operation and maintenance of rooftop solar systems for residential customers and business. The company said it will use Google’s investment to finance more solar installations across the country by expanding its lease and power purchase agreement services.
Customers who do not wish to make the larger upfront investment to purchase the company’s solar system can lease the equipment installed or purchase the power they produce and use through monthly payments that are lower than a typical utility bill. The company covers installation and maintenance of the system over the life of the lease or the P.P.A.
Eliminating the often hefty upfront costs for buying a solar system has been a boon for the industry. From just 27 megawatts of residential photovoltaic installed nationwide in 2005, it more than doubled to 58 MW in 2007 and reached 264 MW in 2010, according to the Solar Energy Industries Association.
“Our investment is a quadruple-win for Google, SolarCity, its new customers and the environment. We continue to look for other renewable energy investments that make business sense and help develop and deploy cleaner sources of energy,” Mr. Needham said.
Mr. Needham did not elaborate on the exact terms of the deal on how will the Menlo, California based-firm have good returns on their investment.
Google’s project financing fund is SolarCity’s largest to date and the largest of its kind for residential solar in the United States. It brings SolarCity’s total project financing to more than $1.28 billion through fifteen funds with seven different partners, SolarCity said today in a statement.
Founded in 2006, SolarCity has 15,000 solar projects around the nation completed or under way in 10 states and the District of Columbia.
Google’s green deals
Over the past years, Google slowly became a major investor in renewable energy. With the SolarCity deal, Google said it has pumped more than $680 million into clean energy projects.
Google’s $168 million investment in the Ivanpah solar project was previously the company’s largest single investment in renewable energy. The 392-MW solar thermal power plant is said to be the largest of its kind in the world, being built by start-up BrightSource Energy in California’s Mojave Desert.
Most of its investments finance various wind energy projects across the United States. The largest of its wind investment is $100 million also made in April for the 845-MW Shepherds Flat project. Under construction in Oregon, it is said to be the world’s largest wind farm.
The company also has Google Energy founded in 2009 which can buy and sell power on the wholesale electricity markets. Its first deal was with an operational 114-MW wind farm in Iowa in July 2010. Its second deal was signed in April 2011 with a 100.8-MW wind farm under construction in Oklahoma. Both facilities are owned by NextEra.
Google even invested 37.5 percent in equity last October 2010 in the Atlantic Wind Connection. The 350-mile transmission line to be built off the coast from New Jersey to Virginia will be able to connect 6,000 megawatts of offshore wind turbine power. The United States Federal Energy Regulatory Commission recently approved a rate of return for the project at 12.59 percent for its investors.
The rest of the company’s investments in green are small start-ups through Google Ventures and Google.org. Most of them are linked to the transportation industry, including battery maker ActaCell, electric vehicle maker Aptera, fuel-efficient car maker Next Autoworks and car sharing company RelayRides.
The company also invested in geothermal company Alta Rock, weather insurance company WeatherBill, smart grid company Silver Spring Networks, and efficient power conversion modules startup Transphorm.
“The largest 200 corporations in the United States have more than $1 trillion in cash on their balance sheets. Investments in solar energy generate returns for corporate investors, offer cost savings for homeowners, create new, local jobs for jobseekers, and protect the environment from polluting power sources. said Lyndon Rive, chief executive of SolarCity.
“Google is setting an example that other leading American companies can follow,” Mr. Rive added.
