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Google invests $94 million in California solar farms

Google reaches for the sun. The search engine's latest multimillion-dollar investment will bring solar power to homes around Sacramento.

By Michail Vafeiadis / December 20, 2011

Google will invest $95 million in new solar farms in California. Pictured, a press shot from a previous Google solar initiative, in 2007.

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Google, in concert with investment firm Kohlberg Kravis Roberts & Co. (KKR), announced Tuesday a joint clean-energy investment in four California solar farms.

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The project aims to generate 88 megawatts of electric power, enough for more than 13,000 average American homes.   

The produced electricity has already been spoken for: Google signed a 20 year contract with the Sacramento Municipal Utility District (SMUD).

Google said on its Green Blog that the company will invest $94 million. KKR will provide the remaining $95 million. 

“We’re excited to be supporting KKR’s entrance into the renewable energy sector in the U.S.,” Axel Martinez, Google’s assistant treasurer, told Forbes in a statement. ”We hope the sector continues to attract new sources of capital."

According to Bloomberg, the price will fluctuate between 7.5 cents and 27.6 cents a kilowatt-hour, based on the time of delivery. (The national average sits around 11 cents per kWh, according to the Environment Protection Agency.)

This is the company’s first major investment in a solar photovoltaic power plant that will produce energy for a grid instead of individual rooftops.   

Google says in its statement that “investing in the renewable energy sector makes business sense and [they] hope clean energy projects continue to attract new sources of capital to help the world move towards a more sustainable energy future.”  

Today's news reverses reports from November that the company had abandoned its solar efforts in a move by Google CEO Larry Page to focus on fewer projects.

"To recap, we're in the process of shutting down a number of products which haven't had the impact we'd hoped for, integrating others as features into our broader product efforts, and ending several which have shown us a different path forward,'' wrote Google Senior Vice President of Operations Urs Holzle in the blog post from November.

Google's investments in clean energy projects exceed $925 million, including more than $880 million since the beginning of this year. Google said Tuesday that these investments aim to produce 1.7 gigawatts of power and provide electricity to 350,000 houses.

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