Apple Inc. plans to buy US $850 million of energy from First Solar Inc in order to cut its energy costs.

This new Monterey County solar farm has the capacity to power more than half a million homes.

It will be used by Apple as a source of electricity for the company's new Silicon Valley campus, offices, and about 52 stores in state.

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It will also be used as additional power supply for Apple's data center in Newark, which already utilizes solar power.

Apple CEO Tim Cook says on the matter, "We expect to have a very significant savings because we have a fixed price for the renewable energy, and there's quite a difference between that price and the price of brown energy."

He notes, "We know in Apple that climate change is real. The time for talk is passed, [t]he time for action is now."

First Solar is from Tempe, Arizona. It specializes in solar panels and constructs solar power plants that it also sells to its power generators.

The 2,900-acre Apple solar farm is seen to start mid-year and end by the end of next year.

The California Flats Solar Project is forecasted to produce 130 megawatts of capacity for Apple, under a 25-year purchase plan.

First Solar notes that this is the most sizeable scheme to provide clean energy to a commercial end user. Remainder of the project's 150 megawatts will go to Pacific Gas and Electric Co.

Apple agrees to pay the cost of close to a billion dollar for the project over its lifetime and will not have equity stake in it.

 "The reason that they made this choice is because they saw a way to save economically. You won't have price volatility from other fuel sources. The fuel is free. It's competitively priced from other options they would have," said First Solar spokesman Steve Krum.

The California-based market leader in mobile communications and computer technology has already begun to reduce its environmental footprint through the use of renewable energy in some of its data centers.

The company announced last week that it would invest US $2 billion over 10 years to turn a former sapphire glass plant in Arizona into a data center that uses solar energy.

TagsApple Inc., First Solar Inc., solar energy, US $850 million