Google and global investment firm KKR have made a significant investment into a portfolio of solar photovoltaic (PV) facilities serving the Sacramento Municipal Utility District (SMUD) held by Recurrent Energy.
The four projects totaling 88 MW, with estimated completion in early 2012 for three of them and the fourth later in 2012, are expected to generate nearly 160,000,000 kWh in their first year of operation, according to the joint statement.
The Wall Street Journal said that Recurrent Energy has a 20-year agreement to supply the SMUD with roughly enough electricity to power 13,000 U.S. homes, and the partnership gives Recurrent the liquidity to fund into other solar developments.
The new deal with Google and KKR is roughly equivalent to offsetting the electricity consumption of more than 13,000 average U.S. homes, the companies said.
Although financial terms for the agreement were not released, Google said that with this development, its investments into renewable energy projects now total more than $915 million; it is Google’s first U.S. investment into utility-scale solar PV.
The portfolio is financed with a combination of debt and equity, which includes equity from Google in addition to equity from SunTap Energy RE LLC, a new venture formed by KKR to finance renewable energy projects in the U.S., the companies said, making it KKR’s first investment into U.S. solar energy as well.
To establish SunTap, KKR said it committed $95 million in equity, drawing on a portion of that sum for this investment while the rest of the equity will be invested in similar projects.
Recurrent Energy said the portfolio sale is an example of how solar energy may attract private capital in future deals.