First Solar Inc. (NASDAQ: FSLR) announced that Apple Inc. (NASDAQ: AAPL) committed $848 million to purchase clean energy from First Solar’s California Flats Solar Project. Apple will receive 130 megawatts (MW) of the solar project under a 25-year power-purchase agreement. This is the largest agreement in the industry to provide clean energy to a commercial end user.
The California Flats Solar Project covers 2,900 acres and occupies 3% of a property owned by Hearst Corporation. The construction is expected to begin in mid-2015 and to be completed by the end of 2016. The remaining output of 150 MW of the project will be sold to PG&E Corp. (NYSE: PCG) under a separate agreement. The project is fully subscribed between the Apple and PG&E power-purchase agreements.
This deal marks the first wholesale commercial and industrial power-purchase agreement executed by First Solar.
Chief Commercial Officer Joe Kishkill said:
Apple is leading the way in addressing climate change by showing how large companies can serve their operations with 100 percent clean, renewable energy. Apple’s commitment was instrumental in making this project possible and will significantly increase the supply of solar power in California. Over time, the renewable energy from California Flats will provide cost savings over alternative sources of energy as well as substantially lower environmental impact.
First Solar shares closed up 5% at $48.61 to end Tuesday’s trading session. In after-hours trading, shares were up an additional 2% at $49.59. The stock has a consensus analyst price target of $58.93 and a 52-week trading range of $39.18 to $74.84.
Shares of Apple closed up 2% at $122.02. In this trading session, shares of Apple hit a new all-time high. In after-hours trading, Apple shares were up marginally at $122.10. The consensus price target is $131.68 and the 52-week trading range is $73.05 to $122.15.