Following Stimulus Push, Solar Power Now A Magnet For Private Investment

The U.S. solar power industry is one of the great success stories of President Barack Obama and Secretary of Energy Steven Chu’s Recovery Act focus on the clean-energy economy. Following the kickstart of funding from the Department of Energy’s loan guarantee program, U.S. solar developers are now “luring cash at record rates from investors ranging from Warren Buffett to Google Inc. and KKR & Co. by offering returns on projects four times those available for Treasury securities,” Bloomberg reports. “Once so risky that only government backing could draw private capital, solar projects now are making returns of about 15 percent, according to Stanford University’s center for energy policy and finance”:

“After tax, you’re looking at returns in the 10 percent to 15 percent range” for solar projects, said Dan Reicher, executive director of Stanford University’s center for energy policy and finance in California. “The beauty of solar is once you make the capital investment, you’ve got free fuel and very low operating costs.”

“A solar power project with a long-term sales agreement could be viewed as a machine that generates revenue,” Marty Klepper, an attorney at Skadden Arps Slate Meagher & Flom LLP, which helped arrange a solar deal for Buffett, told Bloomberg. “It’s an attractive investment for any firm, not just those in energy.”