Google Inc. is making another large investment in renewable energy, but this time average homeowners could be the ones reaping the benefits.
The Mountain View, Calif.-based Internet search giant said Thursday it would invest $300 million in a new SolarCity Corp. fund that would help finance the installation of residential solar power systems.
Solar City said the fund would cover the cost of the installation, solar panels and other equipment. Homeowners either pay SolarCity for electricity produced by the solar panels or monthly rent for the panels if they are leasing.
The new fund will cover the upfront cost of solar panel installations for thousands of homeowners in 14 states including California, Google said.
"We're happy to support SolarCity's mission to help families reduce their carbon footprint and energy costs," said Sidd Mundra, Renewable Energy Principal at Google. "It's good for the environment, good for families and also makes good business sense."
Google will be a tax-equity investor in the fund, meaning the company can claim a federal credit for 30% of the cost of the solar projects.
Tax equity investments in solar usually yield annual returns of 8% to 10%, though details of this particular deal are not being made public, said SolarCity spokesman Jonathan Bass.
Google and the San Mateo, Calif., solar company have teamed up before. In 2011, Google invested $280 million in SolarCity to expand the company's solar leasing system.
The partnership is the latest high-profile announcement from the solar company, which struck a four-year deal last November to install solar power systems at Wal-Mart facilities in 36 states.
Shares of SolarCity were up $1.39 or 2.66% in morning trading Thursday.