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The U.S. military has quietly become one of the biggest investors in green energy over the past five years, and it's taking steps to put even more money behind the sun. Last year, the Obama administration set a Department of Defense goal of deploying 3 GW of renewable energy by 2025 in an effort to reach President Bush's goal of getting 25% of its energy from renewable sources by the same date.
The reason for the push is about more than politics; it's about economics and national security. Over the past year, the Department of Defense has spent more than $20 billion on energy and consumed more than 5 billion gallons of oil. In war zones, oil can be one of the most dangerous things to move because of roadside mines targeting transport corridors. Renewable energy sources like solar can reduce the need for oil and take some risk away from troops.
$7 billion in investment upfront
The latest move by the military was an announcement of $7 billion in power purchase agreements for solar energy installations. SunPower (NASDAQ: SPWR ) and NRG Energy (NYSE: NRG ) were among the winners in "multiple-vendor, indefinite-delivery/indefinite-quantity, firm-fixed-price, non-option, non-multi-year" solar contracts, or the chance to win contracts. What's important to note for the solar energy industry is that 58% of the new renewable-energy capacity planned by 2017 is solar.
The projects will be built, financed, and constructed using private money on private land, so companies will be bidding for the energy orders until projects are built. The big carrot is the $7 billion in potential contracts.
The emergence of a green military
It's not only large solar installations powering bases that the military is using. Forward units are using solar power to power small bases and to charge equipment used in the field. Take a look at a Zero Base Solar Power Generating module being tested in the field:
Troops are also using solar backpacks to charge field gear. As solar technology becomes cheaper, lighter, and more efficient, we'll see more and more of these products on military bases and in the field.
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