Pacific Gas & Electric Co. plans for the first time to make an equity investment in a large-scale solar rooftop project similar to that being done by neighboring utility Southern California Edison.
PG&E intends to begin making equity investments in the next two quarters in renewable energy, primarily solar power, Peter Darbee, CEO and chairman of PG&E, said Wednesday at the Clean Tech Investor Summit in Palm Springs. That will include a large-scale solar rooftop project "in the neighborhood" of SCE's $875 million, 250-megawatt solar rooftop project now underway, Darbee said.
He wouldn't provide additional details about it, or about how much money PG&E planned to aim at the entirety of new renewable equity investments, which could include wind.
But he did say PG&E also would be "looking at different applications, where we partner with people in communities" and municipal governments – Marin, Calif. was one he specifically mentioned – that "really want to show their commitment" to renewable energy.
Southern California Edison is seeking state regulatory approval for its $875 million plan to put 250 megawatts of solar panels on two square miles of rooftops (see California Solar Rooftop Project Hits Milestone). Instead, most utilities, including PG&E, sign long-term contracts with independent renewable energy developers to buy electricity to meet renewable portfolio standards in California and about half the states today.
In fact, SCE's plan to invest directly has some developers upset with the utility. Whether PG&E gets similar flack for its proposal will depend a lot on its details. A similar utility solar investment proposal by Duke Energy got scaled back by North Carolina regulators in October, who said it would be too expensive (see Duke Chops $100M Distributed Solar Project in Half).
But Darbee said that utility equity investments in renewables are now justified because, simply put, utilities are among the few potential investors that are still making money.
The fact that PG&E is generating "more than a billion dollars of taxable revenue," means it has the tax credit appetite that Wall Street banks and other big renewable energy investors have lost amidst the economic downturn, Darbee noted. Solar and wind power project financing in the United States is driven by federal tax credits, and would-be investors who posted losses last year don't need tax credits (see Energy Financing Gone With the Wind and Industry Groups Call for Changes to Federal Incentives).
Uilities, on the other hand, received access to those tax credits for the first time in the energy package passed by Congress in October.