Solon has become the first company selected by Pacific Gas and Electric for installing a solar energy project as part of the California utility's proposed plan to develop and own 250 megawatts of solar energy systems.

The German solar panel maker and project developer plans to contract Silverwood Energy to construct the 2-megawatt project, which would be located next to a PG&E substation in Vacaville.

PG&E first proposed the 250-megawatt project in February this year, an announcement that represented the utility's first plan to own and operate its own renewable energy generation facilities in over a decade, the company said at the time.

Aside from owning its own solar projects, PG&E also proposed to another 250 megawatts of projects that would be developed, owned and operated by independent power producers, who would then sell the electricity to PG&E via long-term agreements.

PG&E has signed many solar power purchase agreements with independent developers in the last seven years in order to fulfill a state mandate for selling renewable electricity. The utility would submit each contract for approval by the California Public Utilities Commission (CPUC).

By including 250 megawatts that would be owned by others in its overall 500-megawatt plan, the utility could streamline the contract negotiation process it goes through to buy power from independent power project developers. 

The CPUC is currently reviewing a 500-megawatt plan. PG&E hopes to receive the commission's approval by the end of the year, said the utility's spokesman Jonathan Marshall. The plan calls for the projects to range from 1-megawatt to 20-megawatt in size.

PG&E is calling the 2-megawatt system by Solon a pilot project because the utility plans to use it to learn about owning and operating solar energy systems, Marshall said.

Solon, which makes crystalline silicon solar panels and has a factory in Tucson, Ariz., expects to start the 2-megawatt project in August and complete it by December this year, said Solon spokesman Spencer Smith.