MidAmerican Energy Holdings Co., a subsidiary of Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) has acquired the Topaz solar far in southern California from First Solar Inc. (NASDAQ: FSLR). The 550-megawatt solar PV installation is valued at more than $2 billion, but MidAmerican did not specify the sales price.
Under the deal, First Solar will continue to build the plant, then will operate and maintain it for MidAmerican. Construction began just last month and is scheduled for completion in 2015.
The electricity from the plant is committed to Pacific Gas & Electric Co. (NYSE: PCG) for 25 years under a power purchase agreement the utility signed with First Solar.
Greg Abel, president, CEO, and chairman of MidAmerican, said:
MidAmerican is the No. 1 owner of wind-powered energy generation among U.S. rate-regulated utilities. Adding solar energy to our generation portfolio is a strategic move to invest in yet another renewable energy source. Our investment in wind resources benefits both our customers and the environment, and our entry into the solar energy industry expands our renewable energy footprint and will help meet current and future energy needs in a manner that reflects our ongoing commitment to environmental respect and cost-effective generation.
Sounds like this may not be the company’s only solar play doesn’t it? But for those who might believe that Buffet will buy into US solar PV makers, it’s worth noting that a solid income stream for 25 years is not a hallmark of any solar maker. What Buffet’s buy validates is a market for these large solar PV projects once construction begins.