Warren Buffett owned MidAmerican Energy is making big bet on the solar industry by buying a $2 billion project called Topaz from First Solar (FSLR)
Other solar energy stocks are benefiting from the news. Shares of SunPower (SPWRA)
The project, one of the largest photovoltaic solar energy developments in the world, will be integrated into Berkshire Hathaway's (BRK-A)
"It's a twenty five year annuity, perfect for an insurance company," says Aaron Chew, a solar analyst at the Maxim Group, about the Topaz project that MidAmerican is buying, regardless of whether Buffett was personally involved in the investment decision. That's because MidAmerican can expect a steady stream of income from solar panels and distribution contracts, which have multi-decade lives and require little maintenance.
MidAmerican is buying a $2 billion thin-film photovoltaic solar energy development, which currently has a 25-year power contract with Pacific Gas and Electric
First Solar shares rallied nearly 11% in early trading to above $51 a share, stemming a near 60% plummet in stock prices year-to-date. First Solar, the largest U.S. solar company and other members of the 17-member Bloomberg Industry Global Leaders Large Solar Energy index have been hit by a fall in solar panel prices and uncertainty over government loan guarantees for plant development.
Daily Recap Newsletter