Does Apple’s Solar Power Deal Make Economic Sense?

solar appleApple CEO Tim Cook says his company will pay $848 million over 25 years to buy electricity from a large solar power plant to be built in Monterey County, California, by First Solar. The deal not only lets Apple tout its environmental conscience; it also probably makes sound business sense.+

Even a few years ago, solar power was generally much more expensive than power from the grid. As prices for solar have plummeted in recent years, however, solar has become cheap enough to compete with grid energy in some situations and some places (see “Hawaii’s Solar Push Strains the Grid”).+

Apple will purchase about 45 percent of the power from the 280-megawatt California Flats Power Project. Cook says this will cover the power needs for Apple’s new headquarters in Cupertino, California, and all the company’s existing stores and data centers in California. First Solar expects to start building the plant by mid-year and finish it in 2016. Typically in such agreements the power produced at a plant is fed into the grid, and whoever has bought the power gets to count it against their normal power consumption.




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