Google Puts Another $300 Million into SolarCity

Google and rooftop solar company SolarCity announced on Feb. 26 that Google is contributing $300 million to an investment fund that is expected to finance $750 million in rooftop solar installations, the two companies said in a statement.

The investment is structured as a tax equity deal that will allow Google to reduce its tax burden and SolarCity to benefit from tax credits for its installed systems that it cannot fully use because the company has insufficient net profits. Google has made similar investments in other renewable energy companies, most recently the Red Hills Renewable Energy Park project in Utah. This latest deal brings Google’s total renewable investments to more than $1.8 billion.

The fund will support the installation of about 25,000 rooftop solar systems. The remaining $450 million will come from debt financing, SolarCity said.

Google made a similar $280 million investment in SolarCity in 2011. Though it openly supports renewable energy technology and is trying to power as much of its operations with renewables as it can, Google officials have also stressed that these deals are profitable investments.

“We’re happy to support SolarCity’s mission to help families reduce their carbon footprint and energy costs,” Google spokesman Sidd Mundra said in a statement. “It’s good for the environment, good for families and also makes good business sense.”

Though most deals like this are supported by large banks—SolarCity raised $850 million this way last year—tax equity deals have become a rapidly growing means of synergy between highly profitable, cash-rich tech companies like Google and less-profitable renewable energy firms like Solar City. Earlier this month, Apple invested $848 million in First Solar’s California Solar Project in Monterey County.

—Thomas W. Overton, JD is a POWER associate editor (@thomas_overton, @POWERmagazine).