New sources of oil will…
Oil prices will have to…
MidAmerican Energy Holding Co., the energy utility owned by Warrant Buffett’s Berkshire Hathaway, has agreed to pay SunPower Corp. between $2-2.5 billion for the design, development, and installation of the 579MW Antelope Valley solar projects.
The two solar installations that make up the 579MW project have been described as the largest photovoltaic development in the world. Construction is expected to begin this quarter and be completed by the end of 2015.
Related Article: Solar and Big Oil Join Forces in Middle East
The small profit margins expected from the SunPower facility mean that it has struggled to find financial backing, especially from banks. Chief Executive Tom Werner believes that Buffett’s involvement will now make SunPower more credit worthy. However Raymond James, an analyst at Marshall Adkins, has believes that little change to the credit rating will be seen, stating that the takeover by MidAmerican Energy Holding “does not alter the fact that SunPower retains a markedly high-cost structure and razor-thin margins in the context of a massively oversupplied market.”
Warren Buffett is renowned for his support of renewable energy and this purchase follows other large deals that MidAmerican Energy has made in the past couple of years. In late 2011 it bought a 49 percent stake in a 290MW solar power plant in Arizona from NRG Energy Inc, and the 550MW Topaz Solar Farm in California from First Solar.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com