The search giant announced yesterday that it will provide $75 million to build 3,000 residential solar electricity systems across the country. Google will own the panels, and get paid over time by customers who purchase the electricity the panels produce.
Google is creating a fund with a San Francisco company called Clean Power Finance that local solar installers will be able to tap so they can offer financing plans to prospective buyers. The plans allow homeowners to install a $30,000 solar electricity system on their house for little or no money up front. Instead, customers pay a monthly fee that is the same or less than what they would otherwise be paying their local utility for power.
Google will earn what it calls an attractive return on its investment in two ways. It gets the monthly fee from homeowners, and, as the owner of the systems, Google will get the benefit of federal and state renewable energy subsidies.
The systems will not carry the Google brand, however. Instead, local installers will offer the deal under their own brands.
Solar power has gotten dramatically cheaper, but the up-front cost for a homeowner remains formidable. A typical home system costs $25,000 to $30,000. Federal and state governments offer subsidies to help defray the cost somewhat, but it is still far too much money for many homeowners to shell out.
Solar financing plans are offered by a handful of large solar companies such as SunRun, SolarCity, and Sungevity, and they are growing in popularity. Google created a $280 million fund with SolarCity in June to help SolarCity expand offerings.
But Google’s new fund will flow to small, local installers who would otherwise not be able to offer these financing plans. Google says there are 1,400 solar installers in all 50 states.
“Cash sales [of solar panels] have been good, but once you add financing, sales can go through the roof,’’ said Rick Needham, of Green Business Operations at Google, in an interview. “It’s an opportunity to significantly expand the market.’’
This is the second such fund established by Clean Power Finance. The company declines to name the investor in the original fund, but says the amount of the fund is larger than Google’s. Google hopes its investment will show a way for other investors to team up with installers to finance many more home solar systems and make a profit in the process.
This is the latest in a string of investments Google has made in renewable energy, now totaling $850 million. Google has invested in wind farms in North Dakota, California, and Oregon, solar projects in California and Germany, and a project off the East Coast meant to help make offshore wind farms possible.
