Renewable “green” energy is having a tough slog in the UnitedStates. While some countries, such as Germany and China, areinvesting huge amounts of money in renewable energy, in the U.S.things are moving backward in some ways. With budgets strapped,states and the federal government have ended many tax credits thathad funded green energy initiatives. Republicans have madeattacking government loans and credits for renewable energyprojects part of their campaign pitch, and even the Democrats,while giving lip service to green energy at their convention, arebalking at subsidies and talking up shale gas.

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Enter Google, the $40 billion Internet company.

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A year ago, Google, which says it is already carbon-neutral—agoal that its founders espoused from the beginning—began a majorprogram of buying renewable energy rather than using carbon-basedenergy and then offsetting it. This year, the company has turnedthings around and is investing in green power generation directly,instead of just buying it from others.

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As Kojo Ako-Asari, corporate finance manager, explains, thereare a lot of renewable energy projects across the U.S. with goodpotential out there in wind, solar, water, geothermal and othersectors, “but there is not a lot of capital available to developthem.”

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“We at Google had a $30 to $40 billion cash balance, so wethought, 'hey, if we can invest in green energy, it could help usbring down the price, bring down the cost of these projects, andhelp our customers gain access to green energy, too,” he says.

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Google committed $915 million to renewable energy projectsthrough the end of 2011, with $880 million of that in 2011 alone.“That's a relatively small investment for Google, but it's a largeinvestment for the sector,” Ako-Asari says.

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The company estimates that its investments represent about 11%of the total amount invested in the U.S. in renewable energy in2011.

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In December, Google closed a deal on an 88-megawatt project withRecurrent Energy and the investment firm KKR. It was the company'sninth power generation investment.

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“We recognize our core business expertise is not managing apower generator,” says Ako-Asari, “so we partner with groups thathave that expertise.”

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Even so, the company realized that it needed to have expertisein the power generation area just to be able to decide how to bestinvest its money. To meet that challenge, Google last year expandedits renewable energy team and split it into two groups. One teamfocuses on deploying capital to fund established technologies andthe other focuses on transformative technologies.

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Treasury, as program leader, supports both teams by conductingfinancial and risk analyses for all the projects targeted forinvestment. There is also an investment committee, consisting ofGoogle Treasurer Brent Callinicos, the head of energy and thecompany's deputy general counsel.

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Ako-Asari stresses that the green energy program is not an actof charity or even PR. “We're in this for profit,” he says. “Theseinvestments are structured to generate a profit for the company'sinvestors.” He agrees that the program is also a “win-win” for thecompany, as successful projects are expected to help lower the costGoogle pays for energy—the company used 2.7 million megawatts ofpower in 2011—and should also generate goodwill among the searchgiant's users.

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As the Google gains experience, Ako-Asari says it plans toexpand its investments beyond the U.S. to include the rest of theworld. Already Google has one investment in a renewable energyproject in Germany.

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See a slideshow of the 2012 Alexander Hamilton Award winnershere.

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Read about the Cigna Global Health Benefits project that wonthe Silver in the Best Green Strategies category here and the Honeywell International project that wonthe Bronze here.

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