Why Are SunPower and SolarCity Giving Away Power?

On December 16, the IEA's Medium Term Coal Market Report was released, and one statistic that jumped out was the fact that, even as renewables like hydroelectric, wind, and solar all gain market share and the North American shale gas boom significantly increases the amount of natural gas available to offset its use, coal use will grow by 2.3% annually for the next several years.

Yet even with this growth in demand for the primary fuel that powers the global electric grid, 22 out of every 100 people on the planet live without access to electricity, and the majority of them live in areas that may be decades away from being connected to the grid. On December 17, SolarCity launched the GivePower Foundation to give solar-powered lighting systems away.

Competitors SunPower and First Solar also have advocacy and charitable giving programs. While there are clear ethical benefits for these activities, is there a measurable value that these programs bring to the company? How does this open the door for future business opportunities? Let's take a closer look.

Creating opportunities

Source: GivePower website

SolarCity's GivePower Foundation is a little different than what SunPower and First Solar do, in that it has a specific mission of donating a solar lighting and power storage system to one school for every megawatt it installs in 2014. These aren't schools in your local neighborhood, either -- they are located in some of the most isolated places in the world, and the school building serves many uses for the local community outside of a place to educate children during the day. However, the majority of adults in these areas have essentially no access to education or training.

Providing light will allow for adult education programs at night, which can be transformative in these communities. Something as simple as the ability to read and write can help farmers immensely, whether it's in getting better prices for goods, learning new, better farming methods more easily and quickly, or simply communicating via the written word without having to rely on someone else, create economic opportunities. With 2014 projections of between 475 and 525 megawatts to be deployed, that's potentially thousands of lives that the company will change for the better.

Advocacy and education
First Solar and the SunPower Foundation also contribute solar systems to charitable causes, and are involved in both advocacy and education programs as well. First Solar funded an endowment at Antelope Valley College that funds up to 10 scholarships per year, and it donated solar equipment and created a training curriculum for College of the Desert. The SunPower Foundation works with several charities to both install solar in impoverished communities in remote areas, as well as to increase awareness as to how solar can really make a positive impact in these communities that are home to nearly 1.5 billion people.

How does it impact the companies?
Hayes Barnard, SolarCity Chief Revenue Officer, had this to say in the introductory video for the GivePower Foundation:

Culture is often cited when some of the best companies to invest in are mentioned, and there is plenty of evidence to support that companies tend to perform better when there is a culture that promotes giving back. While not specifically measurable, knowing that the company you work for (or that you are buying from) has a mission to give back increases the value of the relationship, and adds a sense of purpose.

If one were to take it to the next step, it's not unreasonable to also consider that every individual who grows up in one of these communities is also a potential future customer. Simply put, these communities are decades away from seeing power from any other means, and creating a generation of leaders in the underserved parts of the world who will advocate for increased use of solar is smart business. Both of these things are shown to increase employee retention, which adds measurable value to any business.

Final thoughts
The U.S. solar industry recovered strongly in 2013, following more than a year of decimation by Chinese subsidies and a flooded market. SolarCity is guiding to nearly double its installations next year, while SunPower is building out new manufacturing capacity after running at near 100% during the most recent quarter. First Solar has reduced its manufacturing costs significantly, putting it in a position to perform well.

In many ways, 2014 could be a watershed year, as tax incentives become less important to solar being competitive with traditional energy sources in developed markets. However, planting the seeds in communities around the world that are decades or more from being connected to the grid -- communities with more than one billion residents -- is a reminder of how massive the global opportunity will remain for many years to come. Is your portfolio primed to take advantage of this bright future?

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The article Why Are SunPower and SolarCity Giving Away Power? originally appeared on Fool.com.

Jason Hall owns shares of SolarCity. The Motley Fool recommends SolarCity. The Motley Fool owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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