Apple Signs $848M Deal to Buy Solar Power for Corporate Use

The company will buy the energy from a new solar plant that will be built by Arizona's First Solar in Monterey by the end of 2016.

Apple interest in solar powe

Apple will spend $848 million over the next 25 years to purchase solar power that will run all of its corporate offices, stores and other facilities in California under a deal that will help it meet its corporate needs for electricity while combating climate change by cutting its reliance on fossil fuels.

The deal between Apple and First Solar is the largest commercial solar agreement in the industry so far, according to a Feb. 10 announcement by First Solar.

"Apple is leading the way in addressing climate change by showing how large companies can serve their operations with 100 percent clean, renewable energy," Joe Kishkill, the chief commercial officer for First Solar, said in a statement. "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."

Tim Cook, Apple's CEO, announced the deal and his company's new power strategy on Feb. 10 at a conference in San Francisco sponsored by Goldman Sachs Technology, according to a report by The San Francisco Chronicle. The capacity that Apple will purchase will generate enough electricity for Apple's new corporate headquarters, retail stores and other operations in California.

The plant is being built by Arizona-based First Solar and will be able to collect up to 280 megawatts of generation capacity from the sun through its solar panels at one time, Steve Krum, a spokesman for First Solar, told eWEEK. Apple has signed a 25-year deal to use 130 megawatts of the plant's solar capacity once it is completed, according to the company. The 280,000 megawatt generation capacity of the entire solar facility will collect enough power from the sun to provide electricity for about 100,000 average-sized homes in California.

Krum said that Apple is not investing the money to build the facility, but is paying for solar energy that will be provided at a fixed price by the facility through a long-term 25-year power purchase agreement. Krum would not comment when asked what the cost of the solar plant construction will be for First Solar.

At the conference, Cook said that the solar energy it purchases will be able to run Apple's new headquarters building in Cupertino, as well as all of the company's offices, a data center in Newark, and its 52 California retail stores, the Chronicle story reported. Cook told the conference attendees that his company is concerned about climate change and that its computer centers are already powered by various forms of renewable energy.

"We know at Apple that climate change is real," Cook said, according to a separate report by The (San Jose) Mercury News. "Our view is that the time for talk is past and the time for action is now."

The company is investing in buying clean solar power "because it's right to do," he added.

The construction of the California Flats Solar Project will start in mid-2015 and be finished by the end of 2016, according to First Solar. The facility will be built on some 2,900 acres in rural Monterey County, south of San Francisco.

Apple did not immediately respond to an email request from eWEEK for more details about the solar plant and the company's plans.

The remaining 150 megawatt solar capacity of the project will be sold to Pacific Gas & Electric under a separate long-term contract, according to First Solar. Plans for the solar plant were approved unanimously in January by the Monterey County Planning Commission.

Apple is not the only Silicon Valley company to be looking at using solar and other forms of clean energy.

Google, which is a huge consumer of electricity for its modern data centers, offices and operations around the world, has been making large investments in wind power for its data centers since 2010 with a goal of powering its operations with 100 percent renewable energy in the future.

In January 2013, Google announced an investment of $200 million in a wind farm in western Texas near Amarillo, as the company continued to expand its involvement in the renewable energy marketplace. Google has also invested in the Spinning Spur Wind Project in Oldham County in the Texas Panhandle.

Other Google renewable energy investments include the Atlantic Wind Connection project, which will span 350 miles of the coast from New Jersey to Virginia to connect 6,000 megawatts of offshore wind turbines; and the Shepherds Flat project in Arlington, Ore., which is one of the world's largest wind farms with a capacity of 845 megawatts. Shepherds Flat began operating in October 2012.