Last week, solar stocks lit up (pun intended) as the aftermath
of Berkshire-owned MidAmerican Solar's announcement to get a
piece of the 579-megawatt Antelope Valley Solar Projects from
SunPower Corp. (
). MidAmerican paid the solar panel company more than $2 billion
for the projects.
The Antelope Valley Solar Projects will provide renewable energy
to Southern California Edison, an initiative that SunPower
developed over the last four years. Set to begin in the first
quarter of 2013, the projects will install panels at the
3,230-acre site, which will track the sun daily, capturing energy
by 25 percent. SunPower expects the projects to be completed by
the end of 2015.
SunPower will serve as the engineering, procurement and
construction contractor for the projects, as the company will
work alongside MidAmerican. Currently MidAmerican has a portfolio
of more than 1,830 megawatts of assets including wind,
geothermal, solar and hydro assets, according to Bill Fehrman,
Just to get an idea of how big this project is, Community
Outreach Manager, Tom Jackson, of solar and wind power Internet
retailer GoGreeSolar.com, highlighted the 579-megawatt project in
One megawatt equals a million watts. Jackson said a solar panel
used in residential applications might be around 230 watts. For
the Antelope Valley Solar Projects, that would mean 2.5 million
230-watt solar panels.
's Berkshire Hathaway holds an 89.8 percent ownership interest in
MidAmerican, as of last year's third quarter.
In Buffett's 2011 shareholder letter, he pointed out the
important characteristics of both MidAmerican, and Berkshire's
other energy connect, Burlington Northern Santa Fe:
Both businesses have earning power that even under terrible
business conditions amply covers their interest requirements. In
a less than robust economy during 2011, for example, BNSF's
coverage was 9.5x. At MidAmerican, meanwhile, two key factors
ensure its ability to service debt under all circumstances: The
stability of earnings that is inherent in our exclusively
offering an essential service and a diversity of earnings
streams, which shield it from the actions of any single
The energy sector represents 1.8 percent of Berkshire's 38-stock
portfolio which include National Oilwell Varco (
) and Phillips 66 (
While SunPower's stock is up 0.25 percent today, more than a week
after the announcement, the retreat of solar stocks back down to
a slump suggest that investors may not completely be buying into
the solar sector's recovery just yet.
Trinity Solar Ltd. (
) is down 4.82 percent today, along with First Solar Inc. (
), which is down 0.25 percent, Enphase Energy (
) which is down 0.53 percent and Yingli Green Energy Holding
), which is down 0.66 percent. Newly public SolarCity (
) on the other hand, is up 1.47 percent today.
SCTY data by GuruFocus.com
To view more about Berkshire's holdings, visit Warren Buffett's
portfolio. Also check out his undervalued stocks, top growth
companies and high yield stocks.
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