A partnership between Internet guru Google Inc. (NASDAQ.GOOG) and Solar City, a private company leading the nation in single-source solar photovoltaic power installations for homes and businesses, will see $280 million dedicated to funding residential solar installations, thus making it the largest such fund in the U.S.
For Google, whose name has become a household word, the initiative is representative of the company’s faith in, and dedication to, renewable energy. In fact, the company has so far invested more than $680 million in renewable energy ventures, ranging from its 2008 solar program aimed at providing affordable solar installations to the East Bay (San Francisco, California), to its 2011 investment with Brightsource Energy. This most recent effort will be its largest investment to date.
For Solar City, which has so far partnered with seven different entities to create $1.28 billion in solar projects, this most recent collaboration is natural, enabling the company to offer homeowners their unparalleled solar energy installations either as a point-of-sale option or as a leased installation, payable over the lifetime of the solar panels. In other words, homeowners can own their systems, or pay incrementally over about two decades, with no money down and low monthly payments.
Add the cost to a reduced electricity bill, thanks to highly efficient solar panels, and Solar City systems are still a winner – even more so if homeowners choose the lease option. In addition, every Solar City system is guaranteed and comes with its own patented SolarGuard monitoring service to track system performance and alert Solar City professionals if things aren’t as they should be.
It’s not hard to see why Solar City is engaging in this project; it’s a win-win from any angle. For Google, which has already participated in utility-scale (greater than 1 megawatt, or MW) wind and solar projects, as well as geothermal and other advanced renewable energy technologies, the investment is more about setting an example to corporate America, which has a reported $1 trillion in cash on balance sheets but a stranglehold on the purse strings (no wonder there are no jobs).
It is, however, Google’s first foray into “distributed” generation; that is, many small solar energy systems feeding their electricity either directly to users or into a central grid -- as opposed to one giant solar energy array like Copper Mountain feeding all its power to the grid simultaneously.
Google, and Solar City, are hoping that sufficient installations under this initiative will test whether distributed generation can relieve the strain on the nation’s antiquated electricity grid and prevent brownouts by delivering electricity directly to the end user.
If the program is successful, it will also be able to evaluate how the grid accommodates simultaneous inputs from many small systems, as during midday when homeowners are at work and few appliances are operating.
Solar City, already big in “clean” energy, in May of 2010 bought out Business Solutions (a software-based energy efficiency provider) and is venturing into the field of energy efficiency via energy audits and programmable thermostats. This recent move will enable the company to synergistically tie together its solar energy delivery arm to its monitoring, financing and customer service arm, creating a stronger enterprise overall.
Finally, what the Google/Solar City initiative hopes to demonstrate, according to Solar City CEO Lyndon Rive (co-founder of PayPal), is that solar energy doesn’t have to compete for the prize of grid parity (energy as cheap as that generated from coal). All it has to do is show homeowners (and businesses) that energy generated onsite does not suffer from the degradation and added costs inherent in an aging distribution system – a degradation that becomes apparent every time utilities try to add new generation assets (especially renewable power) and expect customers to pay through the nose for new transmission and distribution lines.
It shouldn’t be too difficult a point to make for wunderkinders like Google and Solar City.
Jeanne Roberts is a freelance writer on environment and sustainability issues. In her previous life, she worked as both a reporter and a communications specialist for a major public utility. Her most recent book, Green Your Home, approaches environmentalism from a consumer’s perspective.
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