(Reuters) - Google Inc and TransCanada Corp announced deals to buy solar power projects on Tuesday, just days after billionaire Warren Buffett made his second major purchase in the sector.
Prices for solar panels have fallen more than 40 percent this year, pushing the cost to install the renewable energy systems to their cheapest levels ever.
But solar panel makers have struggled as the price decline eroded profit margins for the nascent industry, driving share prices across the sector sharply lower.
Google is teaming up with private equity firm KKR & Co to buy four solar plants in California with a total capacity of 88 megawatts from developer Recurrent Energy, which is owned by Sharp Corp.
The deal, whose financial terms were not disclosed, brings Google’s total investment in the sector to more than $915 million.
Solar installations in the United States have reached record levels this year, with more than 1,000 MW installed through the first nine months of the year, about equal to the output of a large nuclear reactor.
Meanwhile, TransCanada, whose efforts to build the Keystone XL pipeline connecting the Canadian province of Alberta’s oil sands fields to the U.S. Gulf Coast have been delayed by the Obama administration, announced its first deal in the solar sector.
The company said it would pay $470 million to Canadian Solar, which will build nine projects in Ontario. Solar plants in that province receive a “feed-in tariff” that guarantees a higher-than-market price for the electricity produced.
Shares of Canadian Solar rose 29 percent to $2.85 in premarket trading, while Google gained 0.8 percent to $626.88.
Last week, Buffett’s power company, MidAmerican Energy Holdings, said it would buy a 49 percent stake in the 290 MW Agua Caliente plant in Arizona from NRG Energy.
That followed MidAmerican’s purchase a week earlier of the 550 MW Topaz solar project from First Solar, which is also building the Agua Caliente plant.
Reporting By Matt Daily in New York and Aftab Ahmed, Vaishnavi Bala and Supantha Mukherjee in Bangalore