• French oil company targets `fast growing' solar and biofuels
  • Total already owns majority stake in U.S. solar firm SunPower

Total SA plans to invest $500 million a year in renewable energy, a step by Europe’s second-largest oil and gas company to expand in biofuels and solar.

The French company said in a presentation to investors it wanted to take “advantage of fast growing renewable market” to build a profitable business.

Total bought a majority stake in SunPower Corp., one of the largest manufacturers of solar panels in the U.S., for about $1.4 billion in 2011. The company earlier this year said it would invest 200 million euros ($223 million) to transform its unprofitable La Mede oil refinery into a biofuel plant.

The $500 million commitment announced Wednesday comes four months after Total Chief Executive Officer Patrick Pouyanne pledged to lift spending in renewable. Ambition is to modify Total’s future energy mix and become part of the solution to climate change.

The spending in renewable energy is, nonetheless, a fraction of the company’s overall investment of as much as $24 billion for this year. Total and some of its European rivals, including Royal Dutch Shell Plc and BP Plc, have taken small steps into renewable energy, partly in response to shareholder concerns about climate change.

Oil Companies

Earlier this year, the heads of BP, Eni SpA, Shell, Statoil ASA, Total and BG Group Plc signed an unprecedented letter to call for governments to agree on carbon pricing at a United Nations climate summit culminating in December. That opened a schism with their American rivals.

“Climate change is a critical challenge for our world,” the heads of six European energy companies wrote to the top UN official in charge of climate talks. "We need governments across the world to provide us with clear, stable, long-term ambitious policy frameworks."

The push by Total and its European peers comes as efforts to reduce fossil-fuel investments and spur renewables such as solar have gathered pace in the past two years, with oil companies sitting largely outside the debate. The European firms are more sensitive to environmental issues because governments in the region are leading the way on climate and voters and shareholders are demanding action.