MidAmerican Energy is buying two solar power projects under construction in Southern California from SunPower Corp. that will generate 579 megawatts of electricity.
MidAmerican said Wednesday that it agreed to pay between $2 billion and $2.5 billion for the projects, to be completed in 2015.
MidAmerican said the Antelope Valley Solar Projects will provide power to Southern California Edison. The projects are expected to employ 650 people during construction.
MidAmerican — which is part of Warren Buffett's Omaha, Neb.-based Berkshire Hathaway Inc. — set up its renewable power subsidiary a year ago. Since then it has bought a portfolio of 1,830 megawatts of wind, geothermal, solar and hydro power production.
That includes a deal last fall to buy two California wind farms north of Los Angeles that can generate 300 megawatts of peak electric capacity, and the 550-megawatt Topaz solar farm in San Luis Obispo County, Calif.
The power generated by these projects is sold to utilities in the open market and doesn't go to MidAmerican Energy or its PacifiCorp utility that serves several western states, said spokeswoman Ann Thelen, who is based at MidAmerican's headquarters in Des Moines, Iowa.
Thelen said MidAmerican may continue buying renewable energy projects if they're attractive and fit with the company's environmental goals.
"We're open for business and continuing to look at prospects that are a good fit for the organization," Thelen said.
The market for renewable energy is especially promising in California because the state set an ambitious goal to have one-third of its electricity derived from renewable sources by 2020.
Southern California Edison's Nicole Neeman Brady said the MidAmerican development will help the utility meet California's renewable energy goals.
SunPower CEO Tom Werner said this deal is a big positive for his 25-year-old company, because it will bring in nearly as much revenue as SunPower expected to generate in 2012.
Werner said this project is also important for the industry because its size and cost will show that solar power is competitive with traditional fossil fuels. And SunPower will benefit from being able to say that a unit of Buffett's company invested in its work.
"Because of the size of this project, we think it's a stamp of credibility for our company," he said.
Werner expects to see similar projects built all across the southwestern U.S. in the next few years.
SunPower operates more than 1,000 megawatts of solar power plants globally. Its shares rose 51 cents, or 9.1 percent, to close at $6.13.
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MidAmerican Renewables: www.midamericanrenewablesllc.com
Berkshire Hathaway Inc.: www.berkshirehathaway.com