Big Bucks for Big Solar

Israeli solar power plant developer Solel announced Monday it has scored $105 million in funding from London-based investment firm Ecofin -- yet another sign that the market for large-scale solar energy projects is reaching critical mass.

Solel last July signed the world's largest solar power deal when it agreed to supply California utility PG&E (PCG) with 553 megawatts of green electricity to be produced by a massive solar thermal power plant to be built in the Mojave Desert. The company's solar trough technology is also used in nine solar power plants (photo above) that were built in the Southern California desert in the 1980s. (In a solar trough power plant, long rows of parabolic mirrors focus the sun's rays on tubes of liquid suspended over the arrays to create steam that drives an electricity-generating turbine.)

Raising $105 million is impressive and it's certainly a big number. But given that a 500-megawatt solar power plant can easily cost $1 billion or more to build, it's a relative drop in the bucket. However, it will allow Solel to move forward with the project and line up project financing for the PG&E plant while it negotiates more deals with other utilities -- it won't say which, but likely candidates are Southern California Edison (EIX) and San Diego Gas & Electric (SRE).

Competitors BrightSource Energy and Ausra have solar power plant applications before the California Energy Commission and have signed or are negotiating power purchase agreements with PG&E.

"Everyone is realizing that the market is there for thousands of megawatts of peaking power," Solel CEO Avi Brenmiller recently told Green Wombat. "As time goes by we see energy prices rising and utilities are focusing their efforts to get solar thermal power because this is the right solution in the southwest United States."

The Ecofin investment in Solel is notable also given the uncertainty surrounding solar power at the moment due to Congress' failure to extend the solar investment tax credit in the recently enacted energy bill. The 30 percent credit is considered crucial to help solar energy companies secure financing for power plants and achieve economies of scale. The tax credit expires at the end of 2008 but solar energy proponents and their allies on Wall Street say they're confident that Congress will take up legislation this session to extend it for as long as eight years.

Comments

[Bret]

Ausra's own estimates indicate their technology is competitive without subsidies, for what its worth.

I'd also say $105m out of $1b is a pretty significant chunk!

Great news for all concerned. California seems to have done great things by requiring a 15% renewable energy portfolio from their utilities.

[kent beuchert]

Solar thermal is clearly the only viable alternative energy out there, with th exception of geothermal. Govt welfare for inefficient and practically useless technologies like primitive wind and solar photovoltaic and wave machines needs to be stopped and the money devoted to solar thermal. The govt is more or less braindead, as are most environmentalists.

[Carlos]

Ignore Kent Beauchert - he's literally a professional knocker. Google the name Kent-Beauchert for a thousand other negative comments. Any renewable that creates more energy than its embedded energy has potential. Read "Solar Revolution" to discover the true potential of solar PV. Having said that, Solar Thermal is wonderfully simple.

[Carlos]

Sorry, that's Kent-Beuchert with no "a", but do look for his other aliases:

Ken/Kent/Kerry Beauchrt/Beuchert/Beuchrt/Biker/Rider/Krider

[kurtis (american)]

why is it that we finally start to use green energy and it is going to be by another country. why can't we support our own country? what kickbacks are our california officials getting? why does our government get to give away our future for their own profit?