Big Solar heats up in the SouthwestPosted: Updated:
Following two decades of darkness, the market for big-time solar generation in the United States could soon see the light. More than a dozen young companies have plans to build a total of at least five gigawatts of solar projects in the vast deserts of the Southwest -- enough to power more than 1.25 million homes.
Aggressive renewable portfolio standards in California that will require utilities to generate 20% of their electricity from renewable sources by next year, and the recent extension of the 30% investment tax credit for solar projects have given solar companies incentive to get their projects underway.
But many of the upcoming projects will use new technologies with limited proof of their reliability or ability to produce cheap power. Utility-scale solar projects generate electricity by the megawatt, as opposed to smaller rooftop photovoltaics used mainly to produce a few kilowatts to power a home or business.
With the help of tax credits and other subsidies, the new solar projects will need to produce power at a cost that's as close as possible to what utilities pay for electricity from gas-fired turbines, the benchmark that produces electricity for up to 15 cents per kilowatt hour.
The young solar companies are employing a variety of designs, some of which incorporate vast collections of photovoltaic cells that turn the sun's energy directly into electricity. Others use concentrating solar power designs that use mirrors to focus light on a single point to boil water and create steam to drive conventional turbines. They're all vying to become the new standard for utilities looking for big solar projects.
But the utilities, tellingly, are limiting their financial commitment to the solar upstarts, preferring instead to let the companies fight among themselves for technological hegemony. "Utilities recognize there is intense competition right now to be the leader in technology," says Jack Jenkins-Stark, chief financial officer at Brightsource Energy, which wants to build as much as 900 megawatts of solar generation capacity in the California desert. "They recognize it's unclear who will be the leader."
Two California utilities, Southern California Edison and Pacific Gas and Electric have signed agreements to purchase the bulk of power from the solar upstarts when, and if, the projects get funded and built. The utilities can, for the first time, take advantage of the solar investment tax credit as it was extended last October. But the utilities are leaving the funding up to the start-ups, which have to find financing for projects that can cost billions of dollars.
And the range of technologies is diverse, with each company developing a system that is uniquely its own.
Southern California Edison is using thin-film panels from First Solar
Another approach: Concentrating solar power to produce steam, which drives generators to produce electric current. The technology comes in a variety of configurations that have their root in the first large-scale solar power plants that a now defunct Israeli company, Luz, built in Harper Lake, Calif., two decades ago.
Luz finished building its 350-megawatt solar electric generating system in 1990, just as property tax breaks that made the projects competitive were expiring, and fossil fuel prices were falling. The Luz design relied on long rows of parabolic trough mirrors that focused light onto overhead pipes full of superheated oil. The oil in turn boiled water that fed the steam generators.
Seventeen years passed before Spain's Acciona Energy fired up the next such plant in the United States, its $260 million, 64-megawatt Nevada Solar One generator. Acciona's solar troughs resemble Luz's original design. But Arnold Goldman, who founded Luz in the late 1970s established a new utility-scale solar company, Brightsource Energy, in 2004, which forgoes troughs for a tower design.
Brightsource has plans for an initial plant in Barstow, Calif., that would have a circular array of 90,000 mirrors focusing sunlight on a central tower topped by a 100-megawatt Siemens
One concentrating solar company, eSolar, is developing a tower design similar to that of Brightsource but in smaller, 46-megawatt units. The quarter-mile square size of the modules could allow the company to build projects on small plots close to population centers, making the design less reliant on scarce transmission capacity to carry power long distances. ESolar Senior Vice President Rob Rogan also hopes the relatively inexpensive modular design will be more attractive to investors. "The appetite to invest in multimillion-dollar projects with unproven technology is limited," he says.
None of the start-ups have yet broken ground on their projects, though construction on a few could begin in 2010. Neither the companies, nor the California utilities that will buy their power, will say what the projects will cost. Beyond financing, the developers also need to figure out where the transmission to move their electricity to California's cities will come from. All are eagerly awaiting details of Congress' economic stimulus package, which could include $11 billion for high-voltage transmission lines.