When the tech titans of Silicon Valley invest in a new venture, the markets pay close attention. But observers may have been surprised when two California-based companies made back-to-back announcements about infusing $1.1 billion into a not-so-new technology.
Last month, Apple CEO Tim Cook revealed an $848 million deal with First Solar to build a huge solar farm in Monterey County, Calif., that will provide power to the creator of the iPhone’s new headquarters for the next 25 years, and Google fronted $300 million for homeowners to purchase their own rooftop solar panels.
Why the big bucks? For starters, they need the power. Along with Facebook, these tech companies all operate massive, electricity-guzzling data centers scattered throughout the country’s remote areas. Every time you upload a picture to iCloud or open a Google Doc, the data is housed in places like western North Carolina or central Oregon. The electricity that keeps those servers humming (plus the intricate cooling systems that monitor their temperature) consumes a whole two percent of America’s energy usage, according to a 2010 estimate. So it’s easy to see why techies would be interested in finding energy that’s both cheap and clean.
Apple and Google, who both have tens of billions in free cash, are making the smart business decision to build their own solar capacity now, rather than pay utilities over the long haul. It’s similar to the difference in cost between sitting on the lump sum and using it to rent an apartment for 30 years or spending it all now to buy a house without a mortgage.
Google’s huge push for residential solar power is particularly groundbreaking, but fits with the company’s ethos. The search engine has always promised it could make the Internet accessible for the masses, and now it’s doing the same with the democratization of energy. Partnered with SolarCity, their funding will pay for the installment of panels on nearly 25,000 roofs, giving each family true energy independence.
Just a few decades ago, these investments in solar power would have been considered wasteful. Solar and other renewable energy sources were commonly derided as “far-fetched and too expensive,” says V. John White, the executive director of the Center for Energy Efficiency and Renewable Technologies. “In the past 10 years, renewable sources have gone from being a slice of green on the dirty fossil-fuel grid to being cost competitive and more reliable than nuclear energy and coal, and catching up with natural gas. The cost of wind and solar power has fallen, and performance has improved.”
In California, that trend will be increasingly clear if Gov. Jerry Brown mandates that renewables account for half the Golden State’s electricity. As is typical in Silicon Valley, Apple and Google will once again be far ahead of the curve.