Shell Is Investing In Solar Energy But Does It Make A Difference?

Shell, whose U.S. headquarters is in Houston, has signed an agreement to acquire about 44 percent interest in Tennessee-based solar company Silicon Ranch. The deal is worth around $200 million and is expected to close in the first quarter of this year.

So what can we take away from this?

"No. 1, Shell is not leaving the oil business anytime soon," Ed Hirs, energy economist at the University of Houston, said.

He said it's a very small investment compared to Shell's oil and gas business.

And Shell isn't the first oil giant to explore other sources of energy.

Hirs said Exxon Mobil is looking into power from algae, for example. Chevron has tried nuclear power. And Shell itself already has a wind power business.

"I think they're looking at other energy sources somewhat out of curiosity, somewhat out of a need for diversification and somewhat out of a need for good public relations," Hirs said.

Shell's solar deal is part of the company's New Energies power portfolio, which focuses on low carbon generation and storage.