Warren Buffett is going solar. The CEO of Berkshire Hathaway is stepping in where the government fears to tread, so to speak, as Berkshire’s MidAmerica Energy Holdings unit agreed to buy the $2 billion Topaz project in California after a U.S. government loan guarantee for the project fell through.
The Topaz Solar Farm in San Luis Obispo County was to have been financed through a government-guaranteed loan, according to a Bloomberg report, but the company was unable to secure that, since it failed to meet a government deadline at the end of September. MidAmerican Energy, a Des Moines, Iowa-based natural gas and power supplier owned by Buffett (left), announced jointly with Topaz on Wednesday that the project will proceed under the direction of the seller, First Solar Inc. of Tempe, Ariz. The statement they released did not disclose the financial aspects of the deal.
Reuters reported that MidAmerican already operates wind-powered energy generation facilities. It is taking advantage of a slump in the market that has dried up renewable-energy financing to add solar to its portfolio. First Solar could be a huge bargain for the utility; it has been pummeled on the global stock market along with the rest of the solar industry, with its stock falling 65% this year. That is equal to the drop in the Bloomberg Industry Global Leaders Large Solar Energy index.
The Topaz Solar Farm, to be developed by First Solar, will be one of the largest photovoltaic power plants in the world at 550 megawatts capable of providing enough power to run 160,000 average California homes. It will use First Solar’s thin-film solar panels, and energy from the farm will be bought by Pacific Gas and Electric Co. from Topaz under a 25-year agreement, MidAmerican Energy said.