New tech giants, like Google, Tesla and Microsoft, have all made big splashes in the renewable energy space. Now, social media pioneer Facebook may have charted a new course with its investment in a Texas solar development.
In May, the Menlo Park-based company announced a unique partnership, involving itself as the direct investor in a project to be built in West Texas.
To be developed by Boston-based Longroad Energy Partners, the project will be built in Andrews County, about 55 miles North of Midland. Scheduled for completion in 2020, the 4,600-acre project will have a capacity of 379 megawatts. In a press release, the developer describes the project as “one of the nation’s largest solar farms.”
While big solar developments are always news, what may stand out more about this project is the financing and the company that is making the investment. Facebook will be the sole “tax equity” investor of the Texas solar farm.
By investing directly in the project's development, Facebook may be setting an example for large tech firms that want to fight global warming and support the cause of renewable energy. Many such firms have made headline-grabbing moves by making large power purchase agreements (PPAs) for solar or wind power, installing their own renewable generation, or adopting ambitious renewable energy goals. For example, last year, Facebook committed to reaching 100 percent renewables by 2020.
Investing in the Texas project will help the company reach that goal in a different way. Tax equity investing is a unique tool that offers companies a low-risk approach to investing directly in renewable energy projects. Investors get a return both from the cash flow that the project generates and from the tax credits they receive from the federal government.
In another twist to this project, oil and gas giant Shell Energy North America (SENA) signed a 12-year PPA for power from the solar farm. In the same Longroad Energy press release, SENA President Glenn Wright stated the purchase agreement will help the fossil fuel company meet its own recently adopted sustainability goals.