Here’s Why Apple Is Building Solar Farms in China
Apple just agreed to back two large solar farms in China. It’s the biggest deal of its kind for a U.S. company operating in China. For China, the deal is only a beginning.
China has been installing more renewable-power capacity than fossil fuels for several years, a gap that's growing. In 2015, China will install 15 gigawatts to 18 gw of solar power alone, double the solar deployment in the U.S., according to an analysis by Bloomberg New Energy Finance (BNEF).
The chart below shows how, in the next 15 years, China is on track to have more low-carbon electricity than the entire capacity of the U.S. power grid. "Think of what their grid will look like in 2030," Michael Liebreich, founder of BNEF, said at the organization's annual summit last week in New York. "A very competitive advantage."
The New King of Clean Energy
For Apple, the 40-megawatt partnership extends Chief Executive Officer Tim Cook's solar aspirations beyond U.S. borders. Cook announced an $850 million deal in February to purchase enough solar to power all its California operations: stores, offices, headquarters, and a data center. By making a similar push in China, the tech giant begins to offset its considerable manufacturing pollution, which is almost entirely overseas.
Many U.S. tech giants—not just Apple—have been criticized for outsourcing their pollution, says Justin Wu, head of Asia research for BNEF. Apple is "hitting back at that whole line of arguments," he says. "This is the beginning of something. Manufacturing in China is going to get greened."
While Apple's 40 mw in China is fairly big as far, as corporate-financed projects go, it is quickly subsumed by the scale of what's happening in China, where about 41 mw will be brought on line every day in 2015, according to Wu.
But it could be massive in terms of pushing other companies to do the same. The U.S. tech industry and such retailers as Wal-Mart and Costco have been stepping up solar deployment in the U.S. As the cost of solar keeps dropping, the deals become more profitable and consumer expectations of environmental responsibility increase.
If U.S. businesses bring those expectations to the countries where their manufacturing operations are located, Wu says, it could speed up the economy's transition to cleaner energy.
- Cost: Undisclosed
- Power: Apple will back 40 mw of capacity, about a third of its recent solar push in California
- Partners: California-based SunPower and Sichuan Shengtian New Energy Development Co.
- Location: The western edge of Sichuan Province, a high-altitude region with plenty of sunshine
- Completion: End of 2015
- Profitable? Yes, because of China's subsidies, according to BNEF, though the terms weren't disclosed