(Bloomberg News) Warren Buffett's MidAmerican Energy Holdings utility agreed to buy the $2 billion Topaz project in southern California, branching into solar power after the industry was battered by stock markets around the world.

The Topaz Solar Farm will be one of the world's largest photovoltaic power plants and is being developed by the seller, First Solar Inc. of Tempe, Arizona, according to a joint statement today. Terms weren't disclosed. The project's 550- megawatt capacity is equal to about half a new nuclear reactor.

Buffett's Iowa-based utility, which entered clean energy by buying U.S. wind farms and a stake in Chinese electric-car producer BYD Co., struck today's deal after First Solar failed to get a U.S. government loan guarantee for the project that will use its thin-film panels. The purchase may make it easier for the solar company to sell additional projects.

"Selling Topaz to the smart financial guys at MidAmerican relieves uncertainty about some of their other projects," Paul Clegg, an analyst at Mizuho Securities USA Inc. in New York who has a "buy" rating on First Solar, said today in an interview. "I don't doubt they will find buyers for more of their projects."

Tax benefits may have helped attract the billionaire, said Gerard Reid, an analyst at Jefferies International Ltd., a London-based unit of the New York investment bank Jefferies Group Inc. "The reason for the move from wind to solar is very simple," he said in an interview. "Tax credits for wind in the U.S. expire at the end of next year, while solar ones run till 2015."

Stock Performance

Berkshire slipped 1.1 percent to $116,149 at 12:06 p.m. in New York, while First Solar advanced 7.7 percent to $49.65. The renewable energy company's shares had fallen 65 percent this year through yesterday, matching the drop in the 17-company Bloomberg Industry Global Leaders Large Solar Energy index.

The declines, triggered by plunging prices for solar panels and their components, have pushed companies around the world to conserve cash, look for partners or consider bankruptcy. Cylindrical thin-film panel maker Solyndra LLC received a $535 million government loan guarantee and then went bust this year.

MidAmerican, which had $46 billion in assets on Dec. 31, called the Topaz purchase a "strategic move" that builds on its experience with wind energy. The natural gas and power provider has built up stakes in more than a dozen wind parks that can generate at least 1.5 gigawatts of power, according to Bloomberg New Energy Finance data.

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