Billionaire investor Warren Buffett's utility company Mid American Energy Holdings is betting on solar energy by acquiring the $2-billion Topaz Solar Farm project from First Solar, the world's biggest solar company by market value.

The Topaz Solar Farm, one of the two largest photovoltaic (PV) projects in the world, both being built by First Solar, will be integrated into MidAmerican, a holding company controlled by Buffett's Berkshire Hathaway.

Located in San Luis Obispo County, California, the Topaz Solar Farm is being built on 3,500 acres of unproductive farmland, and is being developed by Tempe, Arizona-based First Solar Inc.

It has a 550- megawatt capacity, equal to about half a new nuclear reactor, and has a 25-year power sale contract with Pacific Gas and Electric, one of California's largest energy providers.

The Topaz project, which is expected to be completed by 2015, will be able to generate enough renewable energy for about 160,000 homes around California. First Solar has agreed to build and operate the plant.

"Adding solar energy to our generation portfolio is a strategic move to invest in yet another renewable energy source..." said Greg Abel, chief executive of MidAmerican Energy.

Abel sdaid, "This project also demonstrates that solar energy is a commercially viable technology without the support of governmental loan guarantees and reflects the type of solar and other renewable generation that MidAmerican will continue to seek to add to its unregulated portfolio."

The Topaz project will incorporate the company's advanced thin-film PV modules, which generate electricity with no emissions, waste or water use and have the smallest carbon footprint of any PV technology.

Electricity generated from the Topaz project will displace approximately 377,000 metric tons of CO2 per year, the equivalent of taking approximately 73,000 cars off the roads.

Although both companies did not disclose the deal size, analysts speculated that MidAmerican paid $1.65 billion to $1.95 billion, based on First Solar previous sale of similar projects on a per-watt basis.

Although First Solar received more than $3 billion in government loan guarantees to build other large solar farms in the US, it was unable to get a loan guarantee for the Topaz project and was struggling to fund the construction.

In September,  First Solar had announced signing an agreement to supply a 100 megawatt (MW) solar module to Reliance Power, - the largest such supply agreement in India -  starting end 2011 for its solar power project in Jaisalmer in Rajasthan, to supply renewable electricity to Mumbai. (See: First Solar to supply 100 megawatt solar module to Reliance Power)

Des Moines, Iowa-based MidAmerican, which is one of the largest wind-farm operators in the US, has been looking to expand into solar power despite the recent turmoil in the US solar industry.

There is a glut of solar panels in the US market that has driven prices down by 40 per cent so far this year, but still more expensive than the cheap Chinese imports.

These factors have made a few well known US solar panel manufacturers wind up operations, including the much-publicised Fremont, California-based Solyndra.

Solyndra, manufacturer of cylindrical panels of CIGS thin-film solar cells, filed for bankruptcy three months back after it failed to get government loan guarantees.

But the Topaz plant may get 30 per cent of its construction costs from the government under a program that expires at the end of 2011.