Google's Newest Clean Energy Project: Solar Leasing
Google announced this week that it’s investing $280 million in SolarCity, a company that installs and maintains residential-scale solar panels. Customers pay a fee for this service, either up-front or at a monthly rate—and end up saving less money on electricity than they would if they were to buy and install the panels themselves—but they avoid the risk and long-term commitment of ownership. In this system, SolarCity and, by extension, Google take on that risk and the government tax credits that go along with installing solar panels. If you’re like me, Google already backs everything else in life; why not let the company help you save a little on your electricity bill as well?
Google has been putting money towards clean energy for more than a year now, but up until this past April, it had invested primarily in wind projects. There are two places to invest in solar power: on the residential scale or on the utility scale. Google’s first two solar investments went to utility-scale projects. Its first venture, just $5 million, supported a plain-vanilla solar power plant in Germany. Its second investment, of $168 billion, went to a 450-foot-tall solar tower, which collects energy from light reflected by a field of mirrors.
This investment, Google’s biggest to date, supports distributed solar power on a consumer level. For SolarCity, $280 million represents its single biggest chunk of project finance funding. The Google money makes up a fifth of the total $1.28 billion SolarCity says it has raised from project partners.
SolarCity customers might save less on their electricity bills than DIYers who have tens of thousands of dollars to sink into a solar system. But much like Google’s search engine, the more people who contribute to a network of residential solar panels, the stronger the system becomes. More residential installations means less stress on the grid and less pressure to build new power plants or draw on dirty energy sources like coal.
Right now, SolarCity’s business model depends in part on government tax credits that make solar an attractive investment for companies like Google. But across the board, solar power is becoming more accessible on a consumer level. Last month, the hardware store company Lowe’s announced a program that would make it easy for customers to walk into one of its stores and get a quote for solar installation. And consumer products are moving away from designs so ugly that no discerning person would leave the house carrying one. In 2005, for instance, a solar-powered beach or patio umbrella looked like a frisbee from outer space; in 2009, it looked like a normal umbrella with solar panels pasted on; in 2010, it looked like a normal umbrella.
Photo courtesy of flickr user Mary Austin