Legendary corporate investor Warren Buffet has bet 2-billion dollars on large-scale solar electricity plants.
Buffett's MidAmerican Energy Holdings said in a statement Wednesday that it was buying the Topaz Solar Farm power plant in southern California from First Solar for 2-billion dollars.
The plant is planned to produce 550 megawatts of power — enough to power 160 000 average California homes. Together with its sister plant Desert Sunlight, it is considered the world's biggest solar power plant.
Pacific Gas & Energy, a utility serving northern California, has a 25-year power purchase agreement with Topaz as part of its efforts to help California meet its target of generating a third of its energy from renewable sources by 2020.
Topaz "demonstrates that solar energy is a commercially viable technology without the support of governmental loan guarantees," said Greg Abel, chief of the MidAmerican division of Buffett's Berkshire Hathaway Inc, in the statement. The utility will seek to add more assets of this type in the future, he said.
Buffett has increased his massive fortune by buying out-of-favour stocks in the down market and holding on to them as the economy improves. In the case of his latest purchase, he has taken advantage of a glut of solar panels, which has driven down the shares of solar companies.
First Solar is also understood to have experienced difficulties in funding the project, after the US government declined to offer loan guarantees following the massive bankruptcy of solar panel manufacturer Solyndra.
Solyndra went bankrupt earlier this year, after it had received some 500-million dollars in government funding.