When MidAmerican bought into the Topaz project, a solar analyst compared the potential investment returns of the plant to an annuity - products that Berkshire's been selling for decades through its insurance units. That's because MidAmerican can expect a steady stream of income from solar panels and distribution contracts, which have multi-decade lives and require little maintenance.
Like with Topaz, MidAmerican is buying a thin-film photovoltaic solar energy development on contract with PG&E, one of California's largest energy providers. Both energy distribution contracts, which will help Californians meet a mandate to receive a third of their energy from renewable sources by 2020, will give MidAmerican solar returns above current market prices.
First Solar shares are down over 75% plummet in its stock price year-to-date. First Solar, the largest U.S. solar company and other members of the 17-member Bloomberg Industry Global Leaders Large Solar Energy Index have been hit by a fall in solar panel prices and uncertainty over government loan guarantees for plant development.
First Solar is also developing the Desert Sunlight project, even as the outlook for the solar industry darkens. The company will continue to build Topaz and Agua Caliente for MidAmerican and provide maintenance for the plant once completed, according to a press release. When Agua Caliente is complete in 2014, it's expected to displace 5.5 million metric tons carbon emissions and generate electricity for 56,000 homes, said First Solar in a press release.
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