The agreement by investor Warren Buffett’s MidAmerican Energy Holdings to buy a $2-billion photovoltaic farm in San Luis Obispo County could bring a ray of financial sunshine to the battered solar-energy industry.
The scale of Buffett’s foray into this sector of the renewable energy scene is considerably more modest than his $34-billion purchase of BNSF Railway, but it could provide the same kind of boost to the solar power business that the 2009 acquisition did to the railroad industry, experts said.
SLO County Economic Development. Read another article about¬†Warren Buffet’s Investment in First Solar’s Topaz Solar Farm in SLO County¬†with interview comments by Supervisor Adam Hill.
“In a lot of ways, this is classic Warren Buffett,” said Bruce Bullock, executive director of the Maguire Energy Institute at Southern Methodist University. “He comes into an industry that is starving for capital investment. At the same time, this is something that also tells people it’s time to take solar power seriously.”
MidAmerican is buying the 550-megawatt, thin-film photovoltaic solar energy development called Topaz Solar Farm from First Solar Inc. of Tempe, Ariz., the two companies said Wednesday. How much the Berkshire Hathaway Inc. subsidiary is paying for the solar project, which will be able to generate electricity for about 160,000 homes, wasn’t disclosed.
First Solar will build and operate the solar plant for MidAmerican, the companies said…
… Green energy supporters said the move by Buffett’s company could get other investors to focus on solar’s strengths, which have largely been ignored in the face of recent bad publicity.
The value of the nation’s solar industry has grown 67%, to $6 billion, since 2009, making it the fastest growing segment of the nation’s renewable energy offerings, said Michelle Kinman, a clean energy advocate for the group Environment California. The solar industry also is producing jobs at a fast rate during a time of distressingly high unemployment in America, she said.
“Solar power currently employs about 100,000 people in the U.S., with about one-quarter of those jobs here in California,” Kinman said. The industry is expected to add 25,000 jobs around the nation over the next year, she said.
Bullock said the deal could lead to consolidation in the solar industry.
“There hasn’t been anything like this since the collapse of Lehman Bros., which had been a big investor in renewables,” Bullock said. “I don’t think this is going to be his only purchase. They may come a year or two from now, but you would generally want to roll up more power capacity and see what kind of efficiencies you could get.”
Other experts said that the MidAmerican deal would be significant only if it was, in fact, the first of a larger move into the sector.
“It’s one purchase of one very large system,” said Paula Mints, a market research analyst and director in Navigant Consulting Inc.‘s energy practice. “If [Buffett] continues to invest in this sector, it will be significant.”
The Topaz Solar Farm is being built on 3,500 acres of unproductive farmland and would average about 400 construction jobs over the course of its development, said First Solar spokesman Alan Bernheimer. Construction is expected to be completed by 2015, but the facility is expected to begin producing power for Pacific Gas & Electric Co. sometime next year under a 25-year contract…
December 8, 2011 read the full article originally published here.