Google to develop solar energy farms

Online search and advertising giant Google is teaming with investment firm Kohlberg Kravis Roberts & Co. to develop four solar energy farms serving the Sacramento Municipal Utility District in California.

Google said on its Green Blog that it will spend $94 million on the projects and work with KKR and solar developer Recurrent Energy, a division of Sharp Corp., on the projects.

Construction on three of the projects will be complete early next year, and the fourth will come on line later in the year.

The projects are expected to provide electricity to power more than 13,000 average U.S. homes. Electricity produced by three of the projects is contracted for 20 years with the utility district.

It's the latest in a series of renewable energy investments for Google, which has said it is disappointed that it can't buy renewable electricity for its power-hungry data centers and wants to invest to help renewable power expand in scale.

Google earns what it describes as attractive returns on its investments by capturing local and federal renewable energy tax credits and charging interest on the money it supplies for the projects.

Google said it has invested more than $915 million in clean energy projects, including $800 million this year. 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 of the U.S. meant to help make offshore wind farms possible.

In September, Google announced it would set up a $75 million fund to help local installers offer special financing deals to homeowners who want to put solar panels on their roofs. In June, the company announced a $280 million deal with installer SolarCity to help it offer similar deals.

Google's Sacramento solar deal represents its first U.S. investment in a large-scale solar project that generates energy for a grid, rather than rooftop systems that provide power to homes or businesses.

KKR said the project is its first U.S. renewable energy investment. It has invested in a French wind farm operator and a Spanish solar energy company.

Prices of solar panels have fallen dramatically over the last year as more solar manufacturing plants have been built, raw material costs have fallen, and renewable energy subsidies in Europe, solar's biggest market, have dried up.

This has been a boon for installers, utilities and homeowners. Solar installations are on pace to double in the U.S. this year for the second year in a row. MidAmerican Energy, the Iowa utility owned by Berkshire Hathaway, announced investments in two enormous solar farms this month, one in Arizona and one in California.

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