Total's (TTE -0.26%) main business today may be oil and gas, but it's making aggressive moves to become a leader in renewable energy as well. Late last week, CEO Patrick Pouyanne said Total was ready to build 10,000 megawatts (MW) of solar power plants in France, enough to power 1.64 million homes, over the next 10 years. 

If it follows through on that plan, Total will become one of the biggest renewable energy developers among the energy industry's old guard. And it could help its affiliate SunPower Corp. (SPWR 2.20%) along the way. 

SunPower utility scale solar plant in a grassy field.

Image source: SunPower.

France and Total bet big on solar energy

France has launched an initiative known as #PlaceAuSoleil, a series of 30 measures intended to make more areas available for solar, create a viable economic model for investors in solar projects, and provide for more rooftop solar tenders. The wide-ranging effort should support the solar industry broadly. 

For example, late last year, France announced it was increasing the volume of solar tenders it would bid out annually from 1,450 MW to 2,450 MW through 2019. The combination of Total and SunPower has dominated those tenders so far, so an expansion of the market should be great news for them. The two companies won more than 500 MW of projects in 2017, about a third of the tenders auctioned off, so they'll likely be leading contenders for further projects. 

The #PlaceAuSoleil initiatives are expected to accelerate solar deployment in France toward a target of 20,000 MW by 2023 -- up from 8,300 MW installed today. 

Solar energy's impact on Total

Many big oil companies have been criticized for making relatively small bets on renewable energy, but Total is more aggressive on this front than most of its peers. To deploy 10,000 MW in 10 years will require about $10 billion of investment, or $1 billion per year -- more than 5% of the company's total capital expenditures. 

TOT Capital Expenditures (TTM) Chart

TOT Capital Expenditures (TTM) data by YCharts

That's just Total's planned solar investment in France, so its full investment in renewable energy could be significantly higher. Investors should pay attention to signs the company's French strategy might be expanded into other markets it knows well, such as the Middle East or Africa. 

A game-changer for SunPower?

The bigger impact could be on SunPower, which is majority owned by Total. The company expects to deploy 1,500 MW to 1,900 MW in 2018, so assuming its Total's development partner, it would benefit greatly from an average of 1,000 MW of additional annual demand for the next decade. 

SunPower's high-efficiency solar panels have also been key to Total's distributed-generation project wins in France, which include residential and commercial rooftops, and small, ground-mounted systems. Because such panels squeeze more energy out of each square meter of solar deployed, they lower the cost of electricity from solar in high-cost locations. 

The impact of Total's plans could be big financially as well. SunPower generates between $1 per watt from a power plant development to about $2 per watt in residential developments, with gross margin generally hovering in the mid-single digits in power plants and the low-20s for residential. Gross profit from France if 1,000 MW of solar are sold could be up to $400 million annually. 

Solar is booming in France

Few countries are making as concerted an effort to expand their solar industries as France. With tenders there expanding this year, and the new #PlaceAuSoleil initiative driving even more investment in the industry, Total and SunPower have a lot of potential gains ahead.