Google has invested $280 million to aid private homeowners in installing rooftop solar panels. With the investment from Google, SolarCity, a solar panel installation company, will be able to offer solar panels to homeowners for no money upfront; in exchange, customers will pay a set price for the energy generated by the solar system. The investment in SolarCity is Google’s most substantial investment in clean energy to date. Joel Conkling, a member of Google’s Green Business Operations, noted that being environmentally conscious is of great importance to the company and that by investing in solar energy, the company can “put our capital to work in a way that is very important to the founders and to Google.”
In addition to receiving federal and local renewable energy tax credits, Google will make money from the investment by charging SolarCity interest. Google will get a federal tax credit for $84 million, which accounts for 30% of all solar projects. The company can also utilize something called accelerated depreciation, which will allow Google to write off the solar projects for the total value in the year they were installed. Google will also make a substantial sum off of the interest it will be charging SolarCity, although neither company has commented on the exact amount.
By collaborating with SolarCity, Google is helping to make solar energy more affordable for homeowners. Rooftop solar panels typically range from between $25,000 to $30,000. The $280 million Google has invested in SolarCity could help create between 7,000 and 9,000 solar projects over the next 18 months. SolarCity will use the money from Google to pay the costs of installation and maintenance. The customers will be in charge of paying monthly for the energy generated from the solar system.
SolarCity, which was founded in 2006, has lease options and other power agreements available for its customers, allowing homeowners to save thousands of dollars when purchasing a solar system. The company has said that of the 15,000 projects that have been completed or are in progress, 80% have utilized a leasing system instead of paying upfront.
The company estimates that at the end of 2010, home solar panels were capable of generating 74 megawatts of electricity, which is enough to power 74,000 average homes in California. California is the most popular place for solar panels due to incentives offered by the state, in addition to the state’s abundant sunshine. SolarCity also offers installations in Arizona, Colorado, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Texas, and Washington, D.C. The ideal house for a solar panel installation will have a south facing roof that is not covered from the sun by trees or anything other type of blockage.
Electricity prices are not currently rising in the same way that gasoline prices are, but they are expected to slowly rise over the next few years. The installation of a rooftop solar system will allow consumers to be somewhat exempt from the rising cost of electricity.
Google’s investment in solar energy is not the company’s first step toward clean energy and lower carbon emissions. Google’s collaboration with SolarCity will be the company’s seventh investment in clean energy, bringing the total amount Google has spent on renewable energy sources to more than $680 million. In addition to solar energy projects in California and Germany, the company has also invested in several wind farms across the country. Google has also been involved in electric vehicle programs and recently installed 70 electric charging stations. Larry Page, the co-founder of the company, has also announced that he one day hopes that the company’s operations will produce no greenhouse gas emissions. By taking such a vested interest in renewable energy and operations, Google is paving the other for other large corporations to follow the lead in creating a cleaner, more sustainable future.
Photo Credit: climate.nasa.gov