Google creates $280-million solar power fund
In a move that could boost solar energy use in homes, Google Inc. is creating a $280-million fund to help finance rooftop installations.
The Internet search giant, an avid investor in renewable energy technologies, said the deal with SolarCity, a solar panel installation company based in San Mateo, Calif., is the largest green investment it has ever made.
“Google’s leading the way and other companies could follow suit,” said Lyndon Rive, chief executive of SolarCity. “It’s not just about a dramatic environmental impact, it’s also a good return.”
The Solar Energy Industries Assn., a trade group, said residential installations nationwide have grown steadily and are expected to keep expanding this year. It said that by the end of 2010, home solar panels were capable of producing 74 megawatts of electricity, or enough to power about 74,000 average California homes. That was up 33% from the beginning of the year.
More affordable financing options were key to the increase, analysts said. SolarCity is known for its lease programs and power purchase agreements, which allow customers to avoid the tens of thousands of dollars of upfront expenses.
SolarCity will use the Google fund to pay for installation and maintenance costs. Customers pay only for the electricity produced by the panels, usually in monthly installments. Google will get a cut of those payments.
Customers have reported saving thousands of dollars on utility bills over the span of their multiyear contracts. SolarCity says more than 80% of the 15,000 projects completed or underway nationwide involved some kind of financing instead of a full upfront payment.
Google employees will get discounts on SolarCity installations.
SolarCity now has 15 such funds in place, with partners such as Citigroup Inc. and U.S. Bancorp. “These investments make good business sense,” said Rick Needham, director of green business operations and strategy at Google. “It’s a way of diversifying our portfolio and supporting clean energy industries, helping them deploy more broadly and moving down the cost curve.”
SolarCity is Google’s first venture into the residential solar market, but the search giant is far from a clean-tech novice. The company has put nearly $700 million into wind farms, solar power systems and electric vehicle programs. The buses at its Mountain View, Calif., headquarters are equipped with solar panels.
In April, Google invested $168 million in a solar thermal plant in the Mojave Desert. BrightSource Energy Inc.'s Ivanpah project creates electricity using fields of heliostat mirrors reflecting onto so-called power towers and creating steam from the water inside.
The company and its philanthropic arm Google.org also have their hands in several wind farms — onshore and off. Google has invested $55 million in the Alta Wind Energy Center in Kern County, one of the world’s largest wind installations.
Last week, Google put in 70 electric vehicle charging stations at the campus, with plans to install an additional 250. The installation is the largest vehicle-charging setup for a workplace in the country, according to Coulomb Technologies, which will manage the stations through its ChargePoint Network.
Part of the appeal, Needham says, is the prospect of greener and long-lasting electricity sources for Google’s power-sucking data centers.
“There’s a host of technology solutions out there, and we’re interested in helping along multiple solutions,” he said. “Energy is a driver of our business and we want that energy to be clean. We think that makes a heck of a lot of sense.”