GOOGLE’S NEW ENERGY PLAN

Google Profits From Tax Credit to Boost Its $750 Million Clean Energy Plan
Andrew Herndon, July 8, 2011 (Bloomberg News)

"Google Inc. (GOOG) plans to ramp up its $750 million investment in clean energy projects by taking advantage of tax rules to channel more funds into wind, solar and other renewable power sources...

"All except two of the company’s investments in clean energy projects were structured as tax-equity financing, tapping government incentives that encourage large companies to back promising projects that often have yet to generate income, said Rick Needham, Google’s director of green business operations…Google’s goal is to promote technologies and new financing arrangements that will give a boost to the industry and diversify its sources of earnings. Rivals may follow its lead…"

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"Renewable energy plants qualify for tax credits that they typically can’t use until they are selling power and generating profits that can be taxed; once complete, many don’t have enough taxable profit to use the entire benefit. By selling these credits, developers receive funds to back their projects, and the large corporate buyers can apply the credits to their own tax bills…

"Google has invested in a wide variety of early stage companies and projects since 2006. Needham said its funding decisions are based on meeting two goals: they must generate a return, and they must be innovative. Often it considers investments that made other potential backers wary [including rooftop solar, solar power plants, wind projects and an offshore wind transmission system]…"