Warren Buffett is getting into the solar business by buying one of the world's largest solar PV plants - the $2 billion Topaz project under development in southern California.
Buffet's utility, MidAmerican Energy Holdings, is making the acquisition - the 550 megawatt (MW) project is being developed by First Solar using its thin-film solar panels. First Solar will also operate the plant after it comes online in early 2015.
First Solar was unable to get a Dept of Energy (DOE) loan gurantee for the project.
Topaz "demonstrates that solar energy is a commercially viable technology without the support of governmental loan guarantees," says Greg Abel, MidAmerican CEO. "The utility will seek to add more assets of this type to its unregulated portfolio."
"The reason for the move from wind to solar is very simple," says Gerard Reid, an analyst with Jefferies told Bloomberg. "Tax credits for wind in the U.S. expire at the end of next year, while solar ones run till 2015."
He notes that solar is a much safer bet than wind because there's less maintenance and weather risk.
MidAmerican, on the other hand, says the Topaz purchase is a "strategic move" that builds on its experience with wind energy, reports Bloomberg. The company has become one of the larger wind producers - it owns over a dozen US wind farms that produce at least 1.5 gigawatts of electricity. It also has a stake in Chinese electric car manufacturer BYD Company.