Google Inc. (GOOGL) and Norwegian power company, Scatec Solar, have teamed up to build the largest solar power plant in Utah.
Google and Scatec, along with Prudential Capital Group, announced an investment of $188 million to build an 80 MW (ac) photovoltaic (PV) solar plant in Iron County, UT. The Utah Red Hills Renewable Energy Park will be built on a site with excellent solar irradiation. The plant is expected to generate roughly 210 million kilowatt-hours of electricity a year, delivering clean energy that can power roughly 18,500 homes.
Google is the tax equity investor in the deal and will pay a portion of the project cost in return for tax incentives and a share of the facility’s income.
This is Google’s 18th investment in renewable energy since 2010, as part of its commitment to advance green power. The online search giant had previously entered into definitive agreements to invest over $1.5 billion in renewable energy projects across the world to generate a total of more than 2.5 GW (gigawatts).
For quite some time, Google has been moving away from fossil fuels and focusing more on clean energy. It aims to reduce its carbon footprint and use more of renewable energy to power its huge data centers. Moreover, the company can generate healthy returns from these solar and wind investments as there are many associated tax incentives.
In Sep 2014, Google invested $145 million in equity funding to SunEdison, Inc. (SUNE), a manufacturer and provider of solar energy, for the construction of Regulus, its solar plant in southern California. In April, Google teamed up with SunPower Corp. (SPWR) to develop a $250 million residential solar installation in the U.S. Earlier, Google invested in solar leasing ventures with the likes of SolarCity Corp. (SCTY) and Clean Power Finance.
Also, several countries are increasingly relying on solar power to generate clean energy. Stringent environmental legislations on greenhouse gas emissions have also proved to be a boon for the solar power sector. Moreover, despite high initial investments, low operational costs and no fuel cost makes these solar investments attractive.
Currently, Google carries a Zacks Rank #4 (Sell).
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