Katie Fehrenbacher, Fortune:
Various back-of-the-envelope estimates at the time of the announcement suggested that Apple’s deal could buy solar electricity for as low as eight cents to as high as 14 cents per kilowatt hour. It was hard to know the terms exactly—and there are many factors to consider in these complicated deals—since Apple wasn’t disclosing them. But there’s been a lot of speculation about why the overall price isn’t lower for the capacity.
But the key factor that has been overlooked in these calculations is that, while Apple and PG&E are splitting the solar power from the farm almost down the middle, PG&E’s deal is actually only for 15 years. Apple’s is for 25. After 15 years, Apple plans to buy up the solar power from the entire 280-megawatt site. So any financial calculations need to incorporate the fact that, in the last 10 years of the deal, Apple will be getting double the electricity.
This brings the cost down to about 8.2 cents per kilowatt hour, which is below commercial rates of about 10 cents. It's of course even a better deal when factoring in inflation.