It was
a year ago this week that Apple Chief Executive Officer Tim Cook responded to a
climate-change heckler at the company's annual shareholder meeting with
an impassioned rebuttal in
which he famously told investors who care only about profits to "get out
of the stock."
Now Cook is putting his prodigious sums of money where his mouth
is, proclaiming the “biggest, boldest and most ambitious project ever,” an $850
million agreement to buy solar power from First Solar, the biggest U.S.
developer of solar farms. The deal will supply enough electricity to power all
of Apple’s California stores, offices, headquarters and a data center, Cook
said Tuesday at the Goldman Sachs technology conference in San Francisco.
It’s the biggest-ever solar procurement deal for a company that
isn't a utility, and it nearly triples Apple’s stake in solar, according
to an analysis by Bloomberg New Energy Finance (BNEF). “The investment amount
is enormous,” said Michel Di Capua, head of North American research at BNEF.
“This is a really big deal.”
The blueprint
- Cost: $850
million
- Power: Apple
will get 130 megawatts, enough to power 60,000 California homes
- Location: First
Solar’s California Flats Solar Project in Monterey County
- Contract
duration: 25
years
- Footprint: 2,900
acres (12 square kilometers)
- Start
date: Middle
of this year
- Completion: End
of 2016 (in time to take advantage of a 30 percent U.S. tax credit)
- Profitable? Yes,
for both, although Apple and First Solar didn’t disclose the deal's full
terms
The agreement positions
the CEO of the world’s biggest company at the center of the global debate about
climate change and the future of energy—a role Cook has increasingly embraced
over the past two years. The company has been ramping up its investment in
solar, with two 20 Mw plants completed and a third under development in
North Carolina, and a 20 Mw plant in development in Reno, Nev. All of
Apple's data centers are now powered by renewables.
“We know that climate
change is real,” Cook said on Tuesday. “Our view is that the time for talk has
passed, and the time for action is now. We’ve shown that with what we’ve done.”
Wind power has long been
cheaper than solar, and such tech companies as Google, Microsoft, and
Amazon have taken advantage by investing heavily in wind.
But the sun is
the future. The price of solar has been declining quicker than that of
wind, and by 2050 solar could be the world's biggest single source of
electricity, according to the International Energy Agency. The Apple deal is
the first of its size for solar, a milestone on the road to cheap, unsubsidized
power from the sun.
Electricity Prices
for Similar Deals ($/Mwh)
Prices spiked in 2009-2010 as
states rushed to meet RPS goals.
Apple isn't investing in
solar as a gift to humanity. It's doing it because it's a good
business deal, Cook stressed at the Goldman Sachs conference. "We
expect to have very significant savings," he said.
As if to
underline that fact, within minutes of announcing the solar deal, Apple's
stock ended the trading day with a record valuation of $711 billion, making it
the first U.S. company to cross the $700 billion mark. Shares of both Apple and
First Solar surged.
Follow the
Leaders
- Google: Last
year Google signed a 400 Mw power-purchase deal in wind, bringing its
total to 1 gigawatt.
- Microsoft: In
the past two years, Microsoft has entered into deals for 285 Mw of wind,
including one of the world's biggest contracts for a single facility.
- Amazon: Just
last month, Amazon jumped into the race, signing a 150 Mw wind
agreement.
- Ikea: In
September, Ikea and a group of large companies committed to becoming 100
percent renewable by 2020. The furniture retailer already gets a
significant amount of its power through company-owned wind projects
worldwide.
- Wal-Mart: The
big-box retailer has been busy putting panels on the tops of its big
boxes, with more than 100 Mw of capacity installed.
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