California utility company PG&E said Tuesday it plans to develop 500 megawatts of solar power, its largest-ever plan to build and invest in ground- and rooftop-mounted solar energy generation systems. The company plans to spend about $1.4 billion on the project and hopes the solar generation could serve up to 150,000 homes.

Prompted by changes to federal tax law last fall, PG&E is taking advantage of tax credits for renewable energy development that were previously unavailable.

“This program represents an unprecedented commitment of our capital and expertise to speed the delivery of clean, renewable energy to our customers,” said PG&E Chairman and Chief Executive Peter Darbee.

PG&E said it would develop and own 250 megawatts of its own solar-generation capacity, mostly using ground-mounted solar panels. PG&E will also be investing in photovoltaics, which directly convert light into electricity.

Pacific Gas & Electric, one of California’s biggest utility companies, is turning to solar power. PG&E CEO Peter Darbee (left) said the company plans to build and own solar installations. Currently, the utility purchases clean energy from third parties.

Darbee said the plan is to include a large-scale solar rooftop project “in the neighborhood” of SCE’s $875 million, 250-megawatt solar rooftop project.

However, the flailing economy and the structure of the solar subsidy has made building these solar facilities dubious.

“We will do a filing in the next quarter to make an equity investment in renewable energy,” Darbee said. “We are going to move to an equity investment because we have a tax appetite whereas so many other entities do not.”

Although the 30 percent tax credit is alluring, due to the economic climate fewer big companies are wanting to invest in these deals. However, the attraction for PG&E is that With distributed solar, the company could own and operate the panels installed on the rooftops of commercial buildings and homes.

Pacific Gas and Electric is one of the biggest utilities in the U.S. and has a good history as a progressive purchaser of solar energy from third parties.

Today, however, at the Clean-tech Investor Summit, PG&E CEO Peter Darbee stated that they now intend to build their own solar energy installations.

Without getting into the specifics of the size of the solar energy farms he did allow that they would be similar to Southern California Edison’s program, which is budgeted at $875 million over the course of five years, and will involve the placement of 65 million square feet of solar panels on commercial rooftops.

These are the sort of initiatives that will be necessary to meet California’s mandate that by 2020 utilities generate 33% of their electricity from renewable sources. A mandate that is being catalyzed by the 30% tax credit companies receive for renewable energy projects.