Skip to Content

Google's Search for Clean Energy

The Internet giant thought it could help invent cheap renewable power. That wasn’t so easy.

Google once brashly believed that its engineers could invent a solution to the world’s energy problems. These days, the company has a new strategy: finance less risky clean-energy projects where it can actually make an impact.

Last year, Google invested more than ever in renewable power, spending $880 million to underwrite conventional clean-energy projects such as solar panels on California rooftops. But that isn’t the role the company envisioned for itself in 2007, when cofounder and current CEO Larry Page declared that it would get into energy research directly, intending to “rapidly” invent cheap ways to generate “renewable electricity at globally significant scale.”

Google believed its creativity and innovation would make the difference. It created an in-house plan to wean the United States off fossil fuel in 22 years. It posted jobs for engineers who could speed up design of renewable-energy projects and put a team to work improving the heliostat, a mirrored device that focuses the sun’s rays to make thermal energy. Its philanthropy arm,, began investing in startups with far-out ideas.

Google’s founders were directly involved. One startup, Makani Power, originally planned to move boats using kites, but Page and cofounder Sergey Brin convinced it to pursue high-altitude flying wind turbines instead. “They were pretty fearless,” says Makani CEO Corwin Hardham. “They said, ‘This is a risky thing, we don’t know yet if it’s going to work out, but we think this has promise.’”

The company’s speedy ways wowed energy experts, as did its goal of producing a gigawatt of renewable electricity at prices competitive with fossil fuels. “Being at Google, it was fascinating to see how rapidly things could scale. I was enthralled by it,” says Dan Reicher, Google’s former director of climate change and energy initiatives, who left the company in 2010 to head Stanford University’s Steyer-Taylor Center for Energy Policy and Finance. “That struck me as a very fundamental difference—the software world measures time frames in months.” In comparison, he notes, solar panels have been available for 30 years but account for less than 1 percent of total U.S. electricity production.

Last November, however, Google killed the program, known as RE < C (for renewable energy cheaper than coal), along with several other endeavors Google said had hadn’t had the results it wanted. Other companies, Google said, were in a better position to advance specific energy technologies.

The truth was Google’s eclectic bets on potentially disruptive energy innovations never got very far. Take PowerMeter, another canceled project. The software was meant to help homeowners monitor their energy use. Energy entrepreneur Kurt Brown says it had a major flaw: “Their interface was for nerds. It was something mostly a smart Googler would be intrigued by.”

The cancelled plans show the hazards of believing that success in computing—where products can take days to prototype—can carry over to energy. “The IT attitude is great when combined with humility with what is possible,” says Jonathan Koomey, an expert on the environmental effects of computing at Stanford University. “But if you think you are going to overhaul the whole energy industry overnight, just because you did it in software—that is false, that is hubris.”

Some people involved directly with the projects said it proved challenging for Google to guide energy research either directly or through startups. “We were aiming for some home runs. I think we got some doubles,” says one senior manager who has since left Google. “It’s difficult for a company whose sole focus is not innovating in energy to drive really substantial innovation in energy systems.”

Still, Google has hardly given up on green energy. The $880 million worth of investments in renewables that it disclosed in 2011 amounted to about 10 times the level it spent in 2010, putting it among the companies that spend most in the area (BP, by contrast, invested around $1.6 billion).

Whereas its earlier engineer-led work aimed to push new technology forward, Google’s strategy now is largely focused on financing the deployment of commercial solar panels and wind turbines through so-called tax equity investments. Such investments, typically used by banks or large energy companies, provide a financial return as well as federal tax breaks that can total as much as 30 percent of what’s invested.

The funding is no longer coming from Google’s philanthropic arm but from its treasury, which is sitting on $44 billion in cash. Google’s energy and sustainability director, Rick Needham, says the company’s motivations are multilayered. As an investor, he says, Google is looking to make money. But it still wants to have a transformational impact on the “great American challenge” of securing carbon-free energy, as Google chairman Eric Schmidt once put it.  

Google’s largest single investment to date is the $280 million it agreed provide to SolarCity, a company based in San Mateo, California, that installs residential solar arrays. Lyndon Rive, SolarCity’s CEO, says the money is important because his customers pay only small monthly fees. Google’s financing—in effect, a loan to the project—is what pays for the initial cost of installing the solar panels on homes.

Google still works with new energy technology. A number of outside companies pilot or test their technologies at its facilities, and Google continues to invest in some early-stage companies through Google Ventures. It also buys renewable power for its own use. At its Mountain View headquarters, Google has installed one of the world’s largest corporate solar installations and even obtained an energy-trading license from federal regulators so it could directly buy 20-year power contracts with wind farms to power its data centers.

“They tried a bunch of things. Some things worked and some things didn’t,” says Stanford’s Koomey. While being a silent partner in a residential solar panel business isn’t quite as exciting as solving the world’s problems, it’s progress. Says Koomey: “What works is the most cost-effective way to deliver the end result, which is reduced emissions.”

Keep Reading

Most Popular

DeepMind’s cofounder: Generative AI is just a phase. What’s next is interactive AI.

“This is a profound moment in the history of technology,” says Mustafa Suleyman.

What to know about this autumn’s covid vaccines

New variants will pose a challenge, but early signs suggest the shots will still boost antibody responses.

Human-plus-AI solutions mitigate security threats

With the right human oversight, emerging technologies like artificial intelligence can help keep business and customer data secure

Next slide, please: A brief history of the corporate presentation

From million-dollar slide shows to Steve Jobs’s introduction of the iPhone, a bit of show business never hurt plain old business.

Stay connected

Illustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at with a list of newsletters you’d like to receive.