Apple’s Solar Business Stood To Benefit From Obama’s Paris Climate Deal
The sizable tax credits Apple receives for its solar energy production might have been one of the reasons why CEO Tim Cook criticized the Trump administration so harshly for pulling out of the Paris agreement on climate change.
Cook’s Silicon Valley company’s solar power investment would have benefited had President Donald Trump decided to keep the U.S. wedded to the 200-member climate agreement. Apple acquired tax credits last year after kick-starting Apple Energy, a subsidiary company that produces and sells solar power.
The company won federal approval from the Federal Energy Regulation Commission (FERC) in 2016 to start selling excess energy from its various California and Nevada solar farms. Instead of buying solar electricity from another operator, FERC’s approval gave Apple the ability to sell the juice from its own clean power plants.
Apple’s strategy bolstered Cook’s environmental credentials, gave them some independence from the broader U.S. electric grid, and allowed the company to take advantage of the investment tax credit (ITC), which helped reduce Apple’s tax burden. The credit gives breaks to owners of solar projects worth 30 percent of project costs.
For massive companies like Apple, which has a market cap of half-a-trillion dollars, there are substantial financial benefits to owning clean energy projects rather than just signing long-term contracts with intermediaries. The iPhone maker can tap into a pair of federal incentives designed to encourage more investment in clean energy.
Trump’s move might have changed all that.
Cutting the Paris agreement causes solar and wind power to be deployed more slowly, according to John Sterman, a professor at the MIT Sloan School of Management and senior advisor at ClimateInteractive, a project that crunches the numbers for those involved in the climate deal.
Cutting the Paris cord, in other words, keeps costs associated with solar power higher longer and ultimately hurts companies like Apple that promulgate green energy.
Apple did not respond to The Daily Caller News Foundation’s request for comment about whether Cook’s criticisms of Trump are related to the company’s access to steep solar tax credits.
Cook joined fellow executive Elon Musk June 3 in lambasting the president for his move and told reporters the president’s decision “will have no impact on Apple’s efforts to protect the environment.”
Musk, who chairs both Tesla and SolarCity, was heavily invested in the Trump administration before bowing out of the president’s advisory panels.
Musk told investors in January that Trump’s emphasis on job creation and infrastructure spending is a good sign for the green energy revolution. The electric vehicle maker employs about 25,000 people across the U.S. and hopes to add another 1,000 at its solar panel factory in Buffalo.
Tesla, for its part, receives extensive government tax credits. The automaker recently acquired SolarCity, which was founded and directed by several members of Musk’s inner circle and is propped up primarily by billions in taxpayer dollars. The tech guru then became a huge Trump proponent.
He endorsed Congress’ appointment of Secretary of State Rex Tillerson, who formerly served as CEO of Exxon. Musk staked much of his business pedigree both at Tesla and SolarCity on campaigning to end the fossil fuel industry.
Apple, for its part, sought approval in 2015 so the California company could sell wholesale power from its California Flats Project with First Solar, a major U.S. solar company. It allowed the company to become one of the largest end-users of solar power in the world.
Cook would later sign an $850 million deal to buy 130 megawatts of solar power capacity over 25 years from the project in Monterey County. The deal allows the company self-power for its stores, offices, and data centers. California Flats will encompass nearly 3,000 acres of land and more than double in size it solar capacity.
Apple’s CEO was undeterred, telling reporters he would absolutely “pitch Trump to keep the Paris agreement again” if the climate accord issue comes up again.
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