Through the 20-year agreement signed with Wyandot Solar LLC, a subsidiary of Germany's juwi solar Inc, AEP said in the release its Ohio subsidiary will purchase all output and renewable energy credits from the Wyandot Solar facility to be built in Salem Township in Wyandot County near an AEP substation.
Construction of the photovoltaic facility on about 80 acres of land is expected to begin in November, with commercial operation seen by mid-summer 2010, a spokesman for AEP said.
The facility will use PV modules from First Solar Inc manufactured in Perrysburg, Ohio.
AEP did not disclose terms of the agreement.
Based on an industry estimate of about $6,000 per kilowatt, a solar photovoltaic system would cost about $60 million.
AEP, of Columbus, Ohio, owns and operates more than 38,000 MW of generating capacity, markets energy commodities, and transmits and distributes electricity to more than 5 million customers in 11 states.
As the United States prepares to reduce manmade greenhouse gas emissions such as carbon dioxide, AEP is investing in renewable sources of power, energy efficiency and carbon capture and storage technologies, along with new high voltage transmission lines to transport renewable power to consumers.
AEP is one of the nation's two biggest emitters of CO2, along with Southern Co.
AEP, which generates most of its electricity by burning coal, produced about 148 million metric tons of CO2 in 2008. The U.S. electric power sector produced about 2.4 billion metric tons of CO2 (about 2 billion metric tons from coal-fired generation) in 2008, about 41 percent of nation's total CO2 emissions.
The Wyandot agreement is AEP's first for commercial solar energy in its growing renewable portfolio. AEP's wind energy portfolio currently is 1,783 MW, including 310 MW of wind generation owned and operated by AEP in Texas and 1,473 MW of wind energy acquired through long-term power purchase agreements.
On June 1, AEP issued a request for proposals seeking long-term purchases of up to 1,100 MW of additional renewable energy resources as part of its goal to add 2,000 MW of new wind or other renewable energy by the end of 2011.