It’s been a big week in renewables for Google. On Tuesday, the Californian search engine giant announced its biggest renewable energy purchase yet – and there have been 16 of them – in a deal with Iowa utilities to supply its data center facilities there with up to 407MW of wind energy.
But perhaps the bigger news, announced on Wednesday, was that Google had joined forces with solar giant SunPower, to muscle further in on the burgeoning US residential solar leasing market.
The pair have agreed to create a $250 million fund ($100 million from Google, $150 million from SunPower) to buy rooftop solar panel systems and lease them to homeowners at a cost lower than their normal electricity bill, “making it easier for thousands of households across the US to go solar,” Google said on its official blog.
As MarketWatch reported on Wednesday, the news sent SunPower’s stock rallying 8 per cent, but did nothing much for Google, for whom the investment is, comparatively, pretty small – in mid-2011 Google invested $280 million to create a similar solar leasing fund with SolarCity.
According to IDC analyst Crawford Del Prete, Google’s latest deal with SunPower is more about the company’s commitment to disrupting categories – of which energy is one of the biggest.
“It’s also a way to Google to invest in moving a category forward,” Del Prete told MarketWatch, “which is more of a market development spend as opposed to cap ex.”
And certainly, the US residential solar installation and finance market is developing, or, as GreenTech Media‘s Eric Wesoff put it, “remaking itself through new alliances, vertical integration and hybrid sales channels;” not to mention, increasingly cheaper capital.
But despite solar leasing being the dominant form of finance in the US solar market, where it accounts for three quarters of all domestic installations, the attraction of zero upfront payments and immediate savings on electricity bills is yet to fully catch on in Australia – despite several companies having offerings.
Last December, Dutch-based solar PV developer Photon Energy announced plans to launch a commercial solar leasing model, giving Australian commercial customers the choice of two different financing offerings: one, a hire purchase agreement; the other, a power purchase agreement that could allow the user to buy the system at a later date.