Tuesday, February 24, 2009

PG&E Plans Additional 500MW of Solar Capacity

Reuters/Reporting by Nichola Groom/February 24, 2009

California utility Pacific Gas and Electric Co on Tuesday said it would develop up to 500 megawatts (MW) of photovoltaic solar power projects over the next five years, up to half of which it will own directly.

The unit of PG&E Corp said it will pay $1.4 billion to own up to 250 MW of solar generation, its first direct investment in renewable generation in more than a decade. The program will add about 32 cents a month to the average residential utility bill, the company added.

Photovoltaic solar panels transform the sun's light into electricity.

The program is part of PG&E's effort to comply with a state mandate that requires utilities to produce 20 percent of their power from renewables such as wind and solar by 2010.

"This program represents an unprecedented commitment of our capital and expertise to speed the delivery of clean, renewable energy to our customers," PG&E Chief Executive Peter Darbee said in a statement.

The announcement from PG&E comes as the credit crisis has dried up funding for renewable energy projects. Utilities, however, have been one bright spot for solar projects because, effective late last year, they can now claim a 30-percent tax credit for building solar installations.

PG&E's move comes just a day after power plant owner NRG Energy stepped into the solar arena for the first time with a deal to invest $10 million in solar thermal start-up eSolar Inc and create up to 500 MW of solar power in the U.S. Southwest.

The 250 MW of the PG&E's program that the utility will not own will be built and owned by independent developers. Most of the projects will be between one and 20 MW, PG&E said, mounted on the ground or rooftops in northern and central California.

Overall, the project will generate enough emissions-free electricity to power about 150,000 homes, PG&E said.

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