Google Inc will finance $280 million of residential solar power systems through a deal with startup SolarCity that is the Internet search giant's largest single clean energy investment to date.
The fund will enable thousands of homeowners who do not want to make a large upfront investment in a solar system to have solar panels installed on their roofs as part of SolarCity's leasing program, the companies said on Tuesday.
SolarCity's solar lease program enables its customers to pay a monthly fee for solar panels rather than a large up-front installation price. That monthly fee is often offset by the customer's savings on electric utility bills.
Google will own the systems, and will earn a higher return than what it would earn if the cash had been sitting in the bank, SolarCity Chief Executive Lyndon Rive said, though he declined to be specific.
Through the deal with Google, Rive said he hopes other corporations will come to see financing solar systems as a good use of their cash.
It's been mainly banks that have focused on this, and what that has done is it hasn't broadened the market, Rive said in an interview. With Google getting into this ... hopefully it will show other corporate companies that this is a smart investment.
San Mateo, California-based SolarCity recently bought groSolar, a solar power project developer and distributor, expanding its reach into 10 states. The company is privately held.
Google said in late 2007 that it would invest hundreds of millions of dollars in solar, wind and geothermal technologies to help make renewables cost competitive with coal.
The deal with SolarCity brings Google's total investments into clean technology to $680 million.
(Reporting by Nichola Groom and Jennifer Saba; Editing by Bernard Orr)