To help meet its goal of installing, owning, and operating 250 MW of solar generating capacity, Southern California Edison (EIX:NYSE) announced today that is was purchasing 200 MW of solar panels from SunPower Corp. (SPWRA, SPWRB:NASDAQ).

Terms of the deal were not disclosed but two years ago Southern California Edison announced it was budgeting the project at the ½ the prevailing cost of $7 per installed watt. According to Southern California Edison, the company is on track to keep the cost at $3.50 per installed watt.

Over the next the five years, Southern California Edison plans on installing SunPower’s T5 Solar Roof Tile product mostly on leased, large warehouse rooftops at the rate of 50 MW per year. Larger installations, typically 1-2 million watts, will be connected directly to neighborhood distribution circuits where the panels are employed. The panels will also be deployed in neighborhoods where electricity needs are rising.

Despite the “California connection”, Southern California Edison stated today that it chose SunPower due to the high efficiency of its panels and the speed and lower installation costs. SunPower’s relative proximity to Southern California Edison did not influence the decision-making process.

The project will cover approximately 50-100 rooftops and the first 2 MW were installed in Fontana, CA using First Solar’s (FSLR:NASDAQ). Last year a second roof in Chino, CA was also equipped with First Solar’s panels.

With approximately 45 MW yet to be committed, Southern California Edison is actively reviewing bids and expects to award the contracts in the near future.

Shares of Edison International, the parent company of Southern California Edison, were up 1.4 percent in early afternoon trading. Shares of SunPower were up 3.5 percent and First Solar climbed 3.4 percent.