NEW YORK – Warren Buffett’s MidAmerican Energy Holdings agreed to spend as much as $2.5 billion to build two solar projects in California that are set to be the world’s largest photovoltaic development.
MidAmerican acquired the 579-megawatt Antelope Valley projects in Kern and Los Angeles counties from SunPower Corp., according to a statement Wednesday.
MidAmerican will pay SunPower $2 billion to $2.5 billion for the projects and for a three-year contract to build them. SunPower also will operate and maintain the projects under a multi-year agreement with MidAmerican.
Buffett has been increasing investment in wind and solar farms, and last year he formed a MidAmerican unit to support the projects it has acquired, including the $2.4 billion, 550-megawatt Topaz solar farm in California. Chief Financial Officer Patrick Goodman said in November the company favors bets on renewable energy amid high utility valuations. California is the biggest U.S. solar market.
The sale gives panel-maker SunPower “a sizable captive demand channel for its modules, which should help ensure the company maintains healthy factory utilization levels even if the oversupply conditions in the industry take longer than expected to be resolved,” Ben Kallo and Christopher Kovacs, analysts for Robert W. Baird, said Wednesday.
Ingrid Ekstrom, a spokeswoman for SunPower, declined to specify how much of the amount being spent is construction costs and how much is purchase price. SunPower is 66 percent owned by France’s Total, according to data compiled by Bloomberg News.
Construction of the Antelope Valley project is due to begin this quarter, with completion by the end of 2015, SunPower said in a Securities and Exchange Commission filing.
“Together, the two combined projects will form the largest permitted solar photovoltaic power development in the world and will create an estimated 650 jobs during construction,” according to the statement. The projects will provide energy to Edison International under two long-term power-purchase contracts.
MidAmerican Renewables, a subsidiary of MidAmerican Energy, has more than 1,830 megawatts of assets, including wind power, geothermal, solar and hydro, according to the statement.
MidAmerican is owned by Buffett’s Berkshire Hathaway, which also owns The Buffalo News.