In February 2014, Tim Cook, CEO, Apple, responded to a climate-change heckler at the company's annual shareholder meeting with a rebuttal in which he told investors who care only about profits to “get out of the stock.” Now Cook is putting his prodigious sums of money where his mouth is, proclaiming the “biggest, boldest, most ambitious project ever,” an $850m deal to buy power from First Solar, the biggest U.S. developer of solar farms.
The agreement will supply enough electricity to power all of Apple’s California stores, offices, headquarters and a data centre. It’s the biggest-ever solar procurement deal for a company that isn't a utility, and it nearly triples Apple’s stake in solar, according to an analysis by Bloomberg New Energy Finance. “The investment amount is enormous,” said Michel Di Capua, Head of North American research, BNEF. “This is a really big deal.”
For a bargain $850m, Apple will receive 130MW, enough to power 60,000 homes in California. The contract, due to start in mid-2015 and be completed by the end of 2016, will run for 25 years.
The agreement positions the CEO of the world’s biggest company at the centre of the global debate about climate change and the future of energy - a role Cook has increasingly embraced over the past two years. The company has been ramping up its investment in solar, with two 20MW plants completed and a third under development in North Carolina, and a 20MW plant in development in Reno, Nevada. All of Apple's data centres are now powered by renewables.
“We know that climate change is real,” Cook said. “Our view is that the time for talk has passed, and the time for action is now. We’ve shown that with what we’ve done.”
Wind power has long been cheaper than solar, and such tech companies as Google, Microsoft, and Amazon have taken advantage by investing heavily in wind.
But the sun is the future. The price of solar has been declining quicker than that of wind and, by 2050, solar could be the world's biggest single source of electricity, according to the International Energy Agency. The Apple deal is the first of its size for solar, a milestone on the road to cheap, unsubsidised power from the sun.
Apple isn't investing in solar as a gift to humanity. It's doing it because it's a good business deal, Cook stressed at the Goldman Sachs conference. “We expect to have very significant savings,” he said.
As if to underline that fact, within minutes of announcing the solar deal, Apple's stock ended the trading day with a record valuation of $711Bn, making it the first U.S. company to cross the $700Bn mark. Shares of both Apple and First Solar surged.
“Apple is leading the way in addressing climate change by showing how large companies can serve their operations with 100% clean, renewable energy,” said Joe Kishkill, Chief Commercial Officer for First Solar. “Apple's commitment was instrumental in making this project possible and will significantly increase the supply of solar power in California. Over time, the renewable energy from California Flats will provide cost savings over alternative sources of energy as well as substantially lower environmental impact.”