Green Wombat

The Dell of solar energy

For longtime Australian Greenpeace activist Danny Kennedy, one of the environmental group’s more memorable moves was when the Sydney crew climbed the roof of the prime minister’s home and installed solar panels to protest the government’s preference for Big Coal over renewable energy. (Note: Do not try this on the White House.)

These days, there’s a new, greener PM in power and Kennedy is in California, running a solar startup that aims to minimize the time spent on rooftops by doing for the solar business what Dell did for personal computers: Digitizing the entire enterprise to cut costs and create a mass market.

Putting photovoltaic panels on residential rooftops remains largely a labor-­intensive cottage business, often involving multiple visits to a client’s home to make the sales pitch, measure the roof, and design a custom system. Sungevity, which officially launches Tuesday on Earth Day, takes all that online.

Enter your address on its website, and satellite-imaging software zooms in on your home, and Sungevity’s proprietary algorithm calculates the roof’s dimensions — the pitch and azimuth — selects appropriately sized solar arrays, and shows what they will look like installed — while computing your return on investment. Once the order is placed, one of five off-the-­shelf prepackaged solar arrays is shipped to the customer’s door, and an installation crew is dispatched. A database tracks local building and permit requirements, sending the necessary forms to the homeowner for their signature while beaming local regulations governing solar arrays to the installation crew.

“This changes the game,” says Kennedy, 37, who co-founded Sungevity last year after leaving Greenpeace and relocating to Berkeley. (Full disclosure: Kennedy’s kids and Green Wombat’s son attend the same elementary school.)

Kennedy and his partners have raised $2.7 million from investors that include German solar giant Solon and actress Cate Blanchett. “Our technology allows us to size up an entire city remotely and work out what the solar potential of the roof space is,” adds Kennedy, who will be speaking at Fortune’s Brainstorm Green conference on Monday. “This is the real secret sauce, the thing that rocks the house.”

Says Joe Kastner, an executive with solar financier MMA (MMA) Renewable Ventures: “If you do a lot of site visits, that can end up being a big portion of the cost. Anything that can make these projects more efficient and cut the costs on the front end is good.”

Rather than employ its own installers, Sungevity will work with unions to train electricians and other contractors so that it can tap pools of green-­collar workers in local markets. “That’s probably long-term what’s most needed to achieve a million solar roofs,” says Kennedy, referring to California’s solar target. “[Solar panel] supply is not the big constraint. The real issue is labor — it’s the limiting factor in the growth of the industry.”

At the company’s Berkeley offices down the street from Chez Panisse, Kennedy and Andrew Birch, a board member and solar economics expert, run through a live demo of the Sungevity system. In about 15 minutes, a spokesmodel had walked a potential customer through the sales pitch and ordering process while on the backend a consultant is sizing up the roof with the software tools. Within a day or so an e-mail will be sent to the customer with different solar array options and the relative return on investment. “With a traditional solar installer, that would have been about a two week process,” says Kennedy.

The limits of the system become apparent when Birch types in my Berkeley address and the picture shows a large tree overhanging my house, which would have ruled out a solar array except the tree had been removed a year and a half earlier. Kennedy acknowledges that leafy cities like Berkeley with its mishmash of architectural styles and every-which-way rooflines are problematic. Instead, Sungevity’s target market is middle-American suburbia, with its vast tracts of cookie-­cutter houses.

That’s just fine with potential rival SolarCity, the Foster City, Calif., solar installer backed by PayPal co-founder and Tesla Motors chairman Elon Musk. “Their technology works very well for track homes — that’s maybe 2% of our business,” says SolarCity CEO Lyndon Rive. “Our market is more retrofit homes, existing homes in well-established areas that are looking to go solar.”

“I like it when companies like Sungevity get into the market,” he adds. “They’re forcing innovation and the most important thing is the widespread adoption of solar.”

Sungevity’s launch comes as utilities like Southern California Edison (EIX) and PG&E (PCG) and tech giants like Google (GOOG) are pushing for a mass expansion of solar energy.

Nat Kreamer, president of San Francisco-based solar installer Sun Run, says Sungevity’s move to digitize the solar business is valuable but it will have to focus on the installation process to really get costs down. “Once you figure out how to size up someone’s system, the challenge is the speed you can get it built,” he says.

Installation costs account for roughly half of a solar system’s cost and solar installers like Akeena Solar have developed modular arrays containing wiring and other components to minimize the time spent on installation.

Sungevity will not focus on zeroing out customers’ electricity bills, but like Sun Run, will push the “hybrid home” - selling smaller, cheaper solar systems that will cover that portion of a home’s electricity use that is the most expensive to buy from a utility.

For instance, after rebates, a standardized Sungevity solar array for a four-bedroom home in Northern California will cost about $21,000 and deliver an estimated return on investment of 13% over the system’s 25-year life.

“We’re selling this as an economic asset,” says Kennedy, “not just as a way to go green.”

Too late for Big Solar to save the day?

California utility PG&E on Tuesday announced contracts to buy up to 900 megawatts of electricity generated by solar power plants to be built in the Mojave Desert by BrightSource Energy. It’s one of the biggest solar deals to date -- enough to power some 600,000 homes -- and is another sign that that the shift from fossil fuels to carbon-free energy is well underway, at least in California.

But is it too late? PG&E (PCG) first announced it was negotiating a power purchase agreement with BrightSource, then called Luz II, on Aug. 10, 2006. Around that time, the United States’ leading climate scientist, NASA’s James Hansen, warned that the world had only a decade to take drastic action to cut carbon emissions and avert a global catastrophe from global warming.

It took nearly two years alone to just hammer out the PG&E-BrightSource deal and the world now has eight years left to radically ramp up alternative energy sources. By the time the first BrightSource 100-megawatt solar power plant (image above) goes online it will be 2011 and the last one will begin generating electricity for PG&E just as the climate change alarm clock goes off. If you believe Hansen, hitting the snooze button will not be an option.

Of course, there’s no guarantee the BrightSource plants will actually be built — it will take billions to construct them and the investment climate is not exactly sunny these days, clouded by Wall Street’s meltdown and the looming expiration of a crucial solar investment tax credit. (Personally, Green Wombat is betting BrightSource pulls it off — though April Fool’s Day probably was not the best date to unveil such a deal. The Oakland, Calif.-based company was founded by solar pioneer Arnold Goldman, its CEO, John Woolard, hails from Silicon Valley and the startup is backed by Morgan Stanley (MS) and some savvy venture capitalists.)

Given the moral and regulatory imperative — California utilities must obtain 20 percent of their electricity from renewable sources by 2010 and a third by 2020 — why is large-scale solar proceeding at the pace of a Mojave Desert tortoise? (Almost three years ago, for instance, Southern California Edison (EIX) and San Diego Gas & Electric (SRE) unveiled agreements with Phoenix’s Stiring Energy Systems to buy up to 1,750 megawatts of solar electricity. Ground has yet to be broken on any of the planned power plants.)

Partly it’s because the years-long negotiations between utilities and solar power plant companies is something of a black box. Details of these power purchase agreements are kept confidential but are estimated to be worth billions — if a recent $4 billion dealstruck by utility Arizona Public Service with solar power plant builder Abengoa Solar is any indication. Regulated utilities are by their nature big and bureaucratic and can be expected to be extra-cautious when they’re placing bets on untried solar technology from companies like BrightSource and Ausra.

“Transactions of this magnitude require a fair amount of time to negotiate and due diligence must also be performed,” PG&E spokeswoman Jennifer Zerwer told Green Wombat in an e-mail. “The original [BrightSource agreement] announced in August 2006 was for 500 megawatts; the final agreement expanded on the original . . . and culminated in the execution of five separate power purchase agreements for up to 900 MW.”

Another factor is a regulatory structure that is an artifact of the fossil fuel age. California requires extensive environmental review of new power plant projects — be they clean and green or down and dirty — a process that can take a 18 months or more. And the best solar sites often are on federal land in the Mojave — securing a lease for that land is another 18-month-long process.

Still, when the United States faced a threat of a different kind in World War II, it retooled its factories in a matter of months to produce planes and tanks. The fight against global warming will require a similar agility.

The clock, after all, is ticking.

California utility to turn roofs into solar power plants

Southern California Edison plans to install 250 megawatts’ worth of solar panels on commercial rooftops, generating enough electricity to power 162,000 homes.

It’s a potentially game-changing move, one that could lower the cost of solar cells as manufacturers ramp up production to meet the utility’s schedule of installing a megawatt-a-week of arrays until it reaches the 250-megawatt target. That alone is more than United States’ entire production of solar cells in 2006 and will produce as much electricity as a small coal-fired power plant, albeit with no greenhouse gas emissions. “This project will turn two square miles of unused commercial rooftops into advanced solar generating stations,” said John Bryson, CEO of the utility’s parent company, Edison International (EIX), in a statement Wednesday night.

The $875 million initiative also marks the first big move into so-called distributed energy by a major utility. Instead of building a centralized power station and the expensive transmission system needed to transmit electricity to the power grid, Edison will connect clusters of solar arrays into existing neighborhood circuits. A significant hurdle for the massive megawatt solar power plants planned for California’s Mojave Desert is the need in some cases to build multi billion-dollar transmission systems through environmentally sensitive lands to bring the electricity to coastal metropolises.

Solar arrays of course only generate electricity when the sun is shining, but they produce the most power during the hottest part of the day when Southern Californians crank up their air conditioners. The arrays could help spare Edison from having to fire up a fossil-fuel power plant when demand peaks.

Edison spokesman Gil Alexander told Green Wombat that the utility expects the project’s scale to allow arrays to be placed on roofs at half the cost of a typical installation. Edison’s ambitions could prove a boon for solar cell makers like SunPower (SPWR) and Suntech (STP) as well as solar installation companies such as Akeena (AKNS). One unknown is whether the demand created by Edison will drive up costs in the short term, given ongoing shortages of polysilicon, the base material of solar cells. The Edison project could also help jump-start the market for thin-film solar panels, which typically use far less silicon than conventional solar cells.

Alexander says Edison is already negotiating with solar panel makers and installers. Needless to say, the project will be a boon for green collar workers.

Here’s how the solar roofs initiative will work: Edison will lease warehouse rooftop space from building owners. (The target area is the fast-growing “Inland Empire” of Riverside and San Bernardino counties.) The utility will contract for the installation of the arrays and will retain ownership of the solar systems. California regulators appear inclined to approve the project, which will be financed by a hike in utility rates.

“This will be a utility-scale solar power plant, if one thinks of the 100 or so buildings on which the two square miles of solar panels will be installed,” Alexander wrote in an e-mail. “One advantage of this project is that we will tap unused rooftop real estate directly in areas we serve where demand is growing rather than securing a major plat of land in a remote area and then building transmission lines to bring the power to those areas of rising demand.”

Anyone who has driven through Los Angeles can attest to the endless acres of big-box stores, warehouses and strip malls and the potential to generate green power from sun-baked suburban sprawl.

Edison’s solar roof ramp up is likely to put pressure on California’s other big utilities, PG&E (PCG) and San Diego Gas & Electric (SRE), to follow suit. Like Edison, they face a state mandate to obtain 20 percent of their electricity from renewable sources by 2010 and 33 percent by 2020. California’s global warming law requires the state’s greenhouse gas emissions to be rolled back to 1990 levels by 2020.

The Governator himself gave a not-so-subtle nudge to Edison’s competitors. “These are the kinds of big ideas we need to meet California’s long-term energy and climate change goals,” said Gov. Arnold Schwarzenegger in a statement. “I urge others to follow in their footsteps. If commercial buildings statewide partnered with utilities to put this solar technology on their rooftops, it would set off a huge wave of renewable energy growth.”

Florida utility jumps into California solar market

Utility giant FPL has filed plans with California regulators to build a $1 billion, 250-megawatt solar power plant in the Mojave Desert. The move marks the first time that a major player — in this case a Fortune 500 company — has jumped into the nascent Big Solar market.

Juno Beach, Fla.-based FPL’s renewable energy arm, FPL (FPL) Energy, will operate the Beacon Solar Energy Project, which will connect to the transmission system operated by Los Angeles’ municipal utility, the Los Angeles Department of Water and Power. FPL Energy spokesman Steve Stengel declined to say whether the company had struck a deal with LADWP to buy the electricity produced by the Beacon project. “We are currently in discussions with a potential customer on a power purchase agreement for this project,” he wrote in an e-mail. “However, due to confidentiality considerations, I cannot elaborate at this time.”

California law requires the state’s investor-owned utilities — PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) — to obtain 20 percent of their electricity from renewable sources by 2010 and 33 percent by 2020. But public utilities like LADWP only have to set green energy targets, 13 percent by 2010 and 20 percent by 2017 in Los Angeles’ case. Under California’s global warming law, the state’s greenhouse gas emissions must be reduced to 1990 levels by 2020.

Those renewable energy mandates have been driving the market for large-scale solar power plants, but so far California’s Big Three utilities have placed their bets on startups like Ausra, BrightSource Energy and Stirling Energy Systems.

FPL Energy, however, is no stranger to the California solar market. It currently operates seven of nine “solar trough” power plants that were built by Israeli solar pioneer Luz International in the 1980s and early ’90s in the Mojave at Kramer Junction and Harper Dry Lake.

The plants use long rows of parabolic mirrors to focus the sun’s rays on tubes of synthetic oil suspended above the arrays. The hot oil is used to create steam which drives electricity-generating turbines. The company’s new power plant (artist rendering above) will built on 2,012 acres of former farmland near California City and will also use solar trough technology.

FPL tends to be tight-lipped about its plans but in a recent interview with Green Wombat, FPL Energy senior vice president Michael O’Sullivan acknowledged the company is bidding on contracts with utilities throughout the Southwest. “We do not develop through the issuance of press releases,” he says, “and there’s a lot of thinly capitalized solar developers trying to get attention by running around the Southwest announcing projects.” Unlike competitors developing new solar technology, FPL is sticking with the tried and true. “One reason we’re focused on solar trough technology like we have out at Kramer is that it’s a proven, financeable technology,” O’Sullivan says.

In a letter accompanying the Beacon Solar application to the California Energy Commission, O’Sullivan estimated the project would create 1,000 jobs during the two-year construction phase and 66 permanent positions once it goes online in 2011.

Abu Dhabi’s solar venture

Abu Dhabi is not content to just sell you the oil that fuels your SUV; now its going to sell you sunshine to keep your lights on and power your electric car when the internal combustion engine goes the way of the buggy whip. Masdar, the oil-rich emirate’s $15 billion renewable energy venture, and Spanish technology company Sener on Wednesday announced a joint venture called Torresol Energy to build large-scale solar power plants in Australia, Europe, the Middle East, North Africa and the United States.

Torresol initially will invest $1.2 billion in three solar power plants to be built in Spain but the company is targeting the global “sunbelt” for future expansion. Masdar will take a 60 percent ownership stake in Torresol with Sener holding a 40 percent stake. A Torresol spokesman declined to reveal the dollar amount of the investment. A prime market for Torresol will be the U.S. desert Southwest, where companies like Ausra, BrightSource Energy, Solel and Abengoa Solar are competing for contracts with utilities PG&E (PCG), Arizona Public Service (PNW) and Southern California Edison (EIX). Torresol potentially could shake up that market, given its very deep pockets and ability to independently finance billion-dollar solar power plants.

The venture is just the latest move by Abu Dhabi to control what Masdar CEO Sultan Ahmed Al Jaber described to Green Wombat recently as “the whole value chain” of renewable energy, from research and development to manufacturing silicon for solar cells to the large-scale deployment of green technology.

The irony is too rich to leave unsaid: A leading oil producer invests billions in carbon-free energy while a leading consumer of fossil fuels - the United States - continues to subsidize Big Oil while while offering only tepid support for green technology. It is inevitable that climate change will foster the rise of renewable energy - the only question is which countries and companies will profit from the new energy economics. It is entirely possible that the U.S. will trade energy dependence of one kind - on Middle East oil - for another - on Middle East and European solar technology - in the era of global warming. It’s no coincidence that most of the solar energy companies with contracts to build utility-scale power plants in California and the Southwest have overseas roots - Ausra hails from Australia, BrightSource was founded by American-Israeli pioneer Arnold Goldman, Solel is based in Israel and Abengoa is headquartered in Spain.

Torresol plans to build solar power plants using a technology it calls a Central Tower Receiver system. It’s similar to technology used by competitors like BrightSource in that fields of mirrors called heliostats focus the sun’s rays on tower that contains a receiver. In this case the receiver is filled with salt which when heated vaporizes water to create steam that drives an electricity-generating turbine. The company says it intends to have 500 megawatts of solar electricity online by 2012.

Arizona’s $4 billion solar deal

Arizona Public Service, Arizona’s largest utility, announced plans Thursday for a 280-megawatt solar power plant to be built 70 miles southwest of Phoenix by Spanish company Abengoa Solar. What’s striking about the deal is that it offers a rare glimpse inside the economics of Big Solar. And as the renewable energy industry pushes Congress to extend crucial green tax credits, the jobs that will be spawned by the Solana Generating Station and the economic ripple effect of the huge construction project is Exhibit A in why fighting global warming can be a win-win when it comes to the economy and the environment.

All the previous contracts for 100+ megawatt solar power plants have been in California, where utilities PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) have shrouded power purchase agreements in secrecy.

APS (PNW), on the other hand, has lifted the green veil a bit, giving some indication of the current cost of producing utility-scale solar electricity and the larger economic impact. According to APS, the utility will pay around $4 billion over 30 years for the greenhouse gas-free electricity generated by Solana that will light 70,000 homes. That comes to about $133 million a year for the life of the power purchase agreement.

Abengoa spokesman Peter Kelley told Green Wombat that the exact kilowatt per hour rate the company is paying APS is confidential. No doubt though that the utility will pay a premium per kilowatt/hour for its first large-scale solar energy deal compared to electricity produced by a coal or natural-gas fired power plant. That cost disparity is likely to evaporate when the United States moves to price carbon — either through a carbon tax (unlikely) or a cap-and-trade system that requires fossil-fuel power plants to pay if they exceed limits on CO2 emissions. And the cost of financing carbon-spewing power plants will grow in coming years as Wall Street shies way from projects that carry climate change risks. And as solar power plant components and systems go from being one-off prototypes to mass-produced commodities, the cost of solar electricity is expected to drop even further.

Abengoa and APS are not revealing the construction cost of Solana but solar power plants of that size can run half a billion dollars or more. Of course, once built their operating costs are significantly lower than conventional power plants; the fuel — the sun — after all is free.

In the meantime, the Solana Generation Station is expected to inject about $1 billion into the Arizona economy as Abengoa hired 1,500 workers to build the power station and 85 others to operate it, according to APS. The utility estimates that the ripple affect will create another 11,000 to 15,000 jobs.

Abengoa is using a solar trough design for the plant. A tried and true technology, solar trough plants deploy long rows of parabolic mirrors to heat liquid-filled tubes to produce steam that drives electricity-generating turbines. The Solana plant will also store heat in silos of molten salt. The heat can be released when the sun is not shining to run the turbines. “The molten storage will extend the operating hours of the plant both during cloud cover and when sun goes down,” Kelley says. That means Solana can continue to generate electricty as long as six hours after sunset.

The big “if” for Solana is the 30 percent investment tax credit that expires at the end of 2008. If Congress fails to extend the credit, the cost of such solar power plants will jump, jeopardizing their economic viability

Solana is likely to be just the first big solar power plant in Arizona. Utilities there must obtain 15 percent of their electricity from renewable sources by 2025 and with little wind or geothermal available in Arizona, the state is likely to place a big bet on Big Solar.

Texas: Red state, green frontier

For a state steeped in the mythology of Big Oil, Big Coal (plants) and well, big everything, Texas does not necessarily come to mind when you think of Big Green.

It’s a reputation somewhat undeserved, given the Texas-sized wind farms sprawling across the hundreds of thousands of acres of the state’s ranch lands. Now there are signs that California’s solar boom is spreading eastward. One leading indicator: Silicon Valley solar power plant startup Ausra is opening an outpost in the Lone Star State and hiring an executive to “lead the development of stand-alone solar thermal power projects in Texas using Ausra’s proprietary Compact Linear Fresnel reflector technology and the sale of solar field to utility scale customers,” according to a job description posted last week at the Berkeley Institute of the Environment at the University of California, Berkeley.

Like a growing number of states, Texas has a so-called renewable energy portfolio standard that mandates a certain portion of its electricity supply come from green sources. (Unlike most other states that require utilities to obtain a set percentage of electricity from renewable sources, Texas sets a total green energy target and ups the ante every two years. For instance, the 2009 target of 3,272 megawatts rises to 5,880 megawatts in 2011. Texas utilities are allocated a share of those megawatts based on their sales.)

But if you want to sell solar to Texans you have to be in Texas. That’s because when it comes to electricity, Texas is literally a country onto itself: the Texas power grid is not connected to the rest of the country (except for some outbound transmission lines) and all renewable energy must be generated within the state. (Unlike, say, California, which can buy electricity produced by solar power plants in neighboring Nevada or Arizona.)

“Texas is another California-sized market that’s growing rapidly and seeking clean options in the portfolio,” Ausra executive vice president John O’Donnell tells Green Wombat. “While solar resources are somewhat lower than the Mojave, west Texas is a very good solar region and we see major opportunities going forward.”

O’Donnell wouldn’t reveal details about Ausra’s Texas plans (though the job posting says Ausra aims to build 1-to-2 gigawatts worth of solar power plants a year). But Texas clearly is in the market for green energy. Utility TXU’s (TXU) cancellation of several massive megawatt coal-fired plants (and Wall Street’s growing aversion to such projects) along with the ratcheting up of renewable energy mandates means the state will increasingly be looking to solar and wind to fill the void.

Utility El Paso (EE) is accepting bids to supply for 300-megawatts of green energy while Austin Energy is committed to obtaining at least 100 megawatts of solar energy under the city’s goal of going carbon neutral by 2020.

With wide open spaces and plenty of sunshine and flat land, look for other solar power plant players to beat a path to Texas in the coming months.

 

Another solar power plant play for Khosla, Idealab

A passel of high-profile tech investors  -- including Khosla Ventures, Paul Allen’s Vulcan Capital and Bill Gross' Idealab -- are backing yet another new player in the increasingly hot market for large-scale solar power, pumping $50 million into Infinia, a Kennewick, Wash., company manufacturing a Stirling solar dish.

The Stirling dish has a storied — if unfulfilled - history in the annals of solar energy. It marries a Stirling heat engine, 17th-century invention, with a mirrored dish that looks like a super-sized version of a home satellite receiver. The solar dish focuses the sun’s rays on the Stirling engine, heating a gas inside that drives pistons to generate electricity. Stirling dishes are much more efficient at converting sunlight into electricity than solar thermal technologies that use mirrors to heat liquid-filled tubes to create steam to drive electricity-generating turbines. But while solar thermal plants exist today, the Stirling solar dish has never been deployed on a large scale since work on the technology began in earnest following the oil shocks of the 1970s.

Stirling Energy Systems of Phoenix in 2005 signed contracts with utilities Southern California Edison (EIX) and San Diego Gas & Electric (SRE) to build up to build tens of thousands of Stirling dishes to produce up to 1.75 gigawatts of greenhouse gas-free electricity. Though the company operates a six dishes in a prototype power plant at Sandia National Laboratories New Mexico, it is still working to get production costs down and rivals have questioned whether Stirling Energy Systems will be able to fulfill its deals. (See Green Wombat’s 2007 Business 2.0 magazine article on Stirling Energy Systems here. )

But Infinia CEO J.D. Sitton tells Green Wombat that his company has perfected the Stirling dish to make it competitive with large-scale solar thermal as well as new photovoltaic technologies like thin-film solar. Infinia aims to deploy its Stirling dishes in smaller configurations so that solar power plants can be located near cities and at other sites that don’t require vast stretches of desert land where solar thermal plants are typically built. Each 21-foot-high, 15-foot-wide solar dish can generate 3-kilowatts (compared to 25 kilowatts for Stirling Energy Systems’ dish).

Infinia won’t itself become a solar developer but will provide its dishes to for power plants that range in size from 1 megawatt to 150 megawatts or more. In contrast, most solar thermal power plants now being planned are in the 400-500 megawatt range.

“We fly in the face of what has been the conventional wisdom in the solar thermal field that to be competitive you have to have a very large system,” says Sitton. “We can be deployed within city limits and be connected to existing transmission systems. No additional transmission capacity is required.”

“Our approach is that the winning solutions will be those that generate for most kilowatts for the least cost,” he adds. “This is a game about capital efficiency.”

That, of course, has been the mantra of leading green tech investor Vinod Khosla, who has disparaged photovolatic solar systems as too expensive to displace fossil-fuel generated power. Khosla also is backing Palo Alto solar thermal startup Ausra, which last year signed a deal to supply solar electricity to California’s largest utility, PG&E (PCG). Serial entrepreneur Bill Gross’ Idealab is funding solar thermal startup eSolar, which also is being backed by Google  (GOOG).

Infinia contends the design of its Stirling dish system makes it competitive with solar thermal technologies. First, the Stirling engine uses helium rather than hydrogen, which typically must be periodically replenished. “We have no lubrication inside the machine and it needs no maintenance,” Sitton says. “We use helium in a hermetically sealed system.”

Second, he says the Infinia dish is made of six panels of glass rather than the 76 panels on the Stirling Energy Systems dish. “That gives us lower production costs and lower capital costs,” says Sitton. “We brought in large-scale manufacturer from the beginning. It’s not like we built a prototype and now have to reduce the cost to produce it.”

The first prototype went online last October and Sitton says Infinia is building a second at Sandia. Field tests will be conducted later this year in California and Nevada. He says Infinia is currently negotiating with solar developers and full-scale production is set to begin in November. Infinia has been in business since the 198os, building Stirling engines for other applications. But the green tech boom and demands from utilities for renewable energy led the company to focus on solar.

Whether Infinia beats Stirling Energy Systems to market remains to be seen but look for the deals it signs with solar developers for a good indication of just how viable its technology is likely to be.

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.

Clock ticking on crucial solar investment tax credit

When President Bushed signed the energy bill into law last month, much was made of the legislation’s mandate that automakers dramatically boost the fuel efficiency of their fleets. Less noticed was that the bill dropped a provision that would have extended the solar investment tax credit — a measure viewed as essential to transforming solar energy from a niche business into a multi billion-dollar industry that can generate gigawatts of greenhouse gas-free electricity.

The timing couldn’t be worse. With the current solar credit set to sunset, as it were, at the end of 2008, Big Solar is at at a tipping point: Utilities and renewable energy companies are in the midst of negotiating massive megawatt power purchase deals whose financing depends on the 30 percent investment tax credit, or ITC.

“I think there is a major concern that this will stall all the beneficiaries of the ITC,” said Joshua Bar-Lev, vice president for regulatory affairs for solar power plant developer BrightSource Energy. The Oakland, Calif.-based startup is negotiating a 500-megawatt agreement with California utility PG&E and is proceeding with plans to build a 400-megawatt solar thermal power station on the Nevada border (artist rendering above).

Solar energy companies, utilities like PG&E (PCG) and Edison International (EIX) as well as financiers such as Morgan Stanley (MS) and GE Energy Financial Services (GE), had pushed for an eight-year extension of the investment tax credit to give Big Solar projects enough time to get off the ground and start to achieve economies of scale. The provision also would have allowed utilities to claim the credit for solar projects they build. The measure drew support from both sides of the aisle in Congress but died — by one vote in the Senate — when Bush threatened to veto the energy bill because the solar tax credit would be financed by repealing previous tax breaks given to Big Oil.

“The Congressional leadership is very strong in their support of the ITC; they will put this on the table In 2008,” said Chris O’Brien, a Sharp Solar executive and chairman of the Solar Energy Industries Association, in an e-mail. “The solar industry will continue to contact legislators in key states.”

House Speaker Nancy Pelosi and the Democratic leadership in the Senate have pledged to re-introduce renewable energy tax credit legislation this session. “Speaker Pelosi has said repeatedly that she hopes to address that this year,” Drew Hammill, a spokesman for Pelosi, told Green Wombat. “We’re just getting started but there’s bipartisan support for the tax credit.”

Publicly, at least, no one in the solar industry will say that the uncertainty over the tax credit is affecting planned projects. “Our expectation is that there will be another tax bill that will address this issue,” said Kevin Walsh, managing director of the renewable energy group at GE Energy Financial Services. “We’re working on a number of [solar thermal] deals but it’s too early to disclose them.”

In recent months, PG&E has signed deals for more than a gigawatt of electricity — enough to light more than 750,000 homes — with solar power plant developers. Such power purchase agreements can take more than a year to hammer out and the permitting and construction of a solar power station can take another three to five years.

"We’re continuing to move forward with negotiations and with contracts that have already been signed, but certainly the absence of the ITC could potentially impact future projects,” said PG&E spokesman Keely Wachs. “Without the credit, it does increase the cost of that energy and of course it also sends a very clear market signal as to our country’s energy priorities.”

Silicon Valley solar startup Ausra is building a 177-megawatt solar power plant on the Central California coast to supply electricity to PG&E and is pursuing deals with Florida’s FPL (FPL) and other utilities.

“Just like any business, the solar industry prefers a predictable system for the future,” wrote Holly Gordon, Ausra’s director of regulatory and legislative affairs, in an e-mail. “It will be more difficult to plan for our projects while the situation remains uncertain. While we are currently seeing excellent demand for solar energy at market prices, we need a long term extension of the renewable energy tax credits to ensure market stability and investor confidence as the market continues to grow.”

Solar power plant factory to open in New Mexico

Big Solar has been about Big Dreams - fields of mirrors carpeting the desert to produce clean, greenhouse-gas free electricity. In another step toward making that vision a concrete-and-glass reality, Schott Solar announced Monday that it is building a factory in Albuquerque, N.M., to manufacture components for large-scale solar thermal power plants as well as photovoltaic modules for commercial rooftop arrays.

The German company’s news follows Silicon Valley solar startup Ausra’s announcement last month that it’s building a solar thermal factory in Nevada — the first in North America.

That solar companies are now investing capital to break ground on manufacturing plants represents the creation of a Big Solar infrastructure and, of course, a move to get on the ground floor of what is expected to be a solar building boom in the sun-drenched Southwest of the United States. Utilities throughout the region are facing mandates to dramatically increase their use of renewable energy. In California, for instance, PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) are all negotiating big megawatt contracts for utility-scale solar power thermal power plants. A consortium of Southwest utilities meanwhile has put out to bid a 250-megawatt solar station.

“We certainly see the opportunity for growth in the solar thermal market,” Mark Finocchario, CEO of Shott’s North American operations, told Green Wombat. “The concentration of solar thermal plants will be in the Southwest and we see that’s where the rest of the supply market will develop as well. But we would have the ability to ship product to anywhere in the world.”

The $100 million Albuquerque factory will manufacture solar thermal receivers — long tubes that hang over curved mirrors called solar troughs. The mirrors focus the sun’s rays on the receivers and liquid inside becomes superheated to produce steam that drives electricity-generating turbines.

Finocchario says the the plant, which will employ 350 people,  is set to go online by the end of the first quarter of 2009. Future plans call for another $400 million investment to expand the factory’s workforce to 1,500.

SunPower’s solar power plant building boom

Another day, another new solar power plant. At least that's the way it seems, given SunPower's recent spate of deals to build multi-megawatt photovoltaic solar power stations. The latest came Friday when the Silicon Valley solar panel maker announced a contract to construct an 8-megawatt solar power plant in Spain. The agreement follows a November deal for three other solar power stations in Spain totaling 21 megawatts. That in turn was preceded by an October announcement of a contract for a 18-megawatt plant in -- where else -- Spain.

See a pattern here? SunPower (SPWR) now has solar power plants totaling more than 100 megawatts built or under contract in Spain. Plus it constructed an 11-megawatt solar power station in neighboring Portugal and a 10-megawatt plant in Germany. It's sole PV power plant in the United States is a 15-megawatt station at Nellis Air Force Base outside Las Vegas.

It's no accident that SunPower has set its sights on Spain and other European markets. Spain and Portugal, for instance, offer simple so-called feed-in-tariffs that pay solar power plant operators a premium rate -- typically for 15 to 20 years -- for producing renewable energy. That makes the economics of financing and building solar power plants relatively straightforward in contrast to the patchwork of short-term state and federal green energy incentives in the U.S. (Witness the current upheaval in the industry over the crucial solar investment tax credit that expires at the end of 2008, and which Congress neglected to extend in the recently enacted energy bill.)

No wonder Europe is attracting renewable energy financiers like GE Energy Financial Services (GE), which financed SunPower's Portugal plant (pictured above). "We truly believe utility-scale solar will be an incredible opportunity,” Kevin Walsh, managing director of GE Energy Financial Services, told Green Wombat at the opening of the Portugal plant last March. (That's not to say that companies like GE don't see opportunity in the U.S. market. Just this morning, GE and SunPower announced that GE Energy Financial Services will finance and own five 1-to-2.4-megawatt commercial solar arrays in California being installed by SunPower for Toyota (TM), Hewlett-Packard (HPQ), Agilent, Lake County, and the Rancho California Water District.)

The built-in profit margin for solar in Spain and Portugal also makes photovoltaic power plants viable. PV plants are essentially residential rooftop solar arrays writ large that track the sun and convert sunlight that strikes silicon-based cells directly into electricity. But silicon is expensive and solar panels are relatively inefficient. So absent subsidies like feed-in tariffs, few PV power stations have been built in the U.S., which has focused on large-scale solar thermal power plants that use mirrors to heat water or other liquids to create steam that drives electricity-generating industrial turbines. The beauty -- literally - of a PV plant is that it contains virtually no moving parts or the bulky power blocks that contain turbines and other machinery. That means they can be built closer to urban areas and used to shoulder the load from overburdened utility substations.

Even solar panel installers are striking deals overseas. Silicon Valley-based solar installer Akeena (AKNS), for instance, developed a new solar panel system called Andalay that cuts the cost of installation for homes and businesses. The company contracted with China solar panel giant Suntech (STP) to manufacture Andalay, which will also sell the panel in Europe, Japan and Australia.

Another California solar power plant clears hurdle

Big Solar is on a roll in California.

For the second time in seven weeks, the California Energy Commission has voted to accept an application for a massive megawatt solar power plant. The commission on Wednesday certified as "data adequate" Silicon Valley startup Ausra's application to build a 177-megawatt solar on the state's central coast. That means Ausra's Carrizo Energy Solar Farm has cleared a significant regulatory hurdle and the commission will begin a year-long review process. If all goes well, construction will begin in 2009 and the plant will start producing electricity in 2010. (To get an idea of the complexity of the California licensing process and why the acceptance of an application is a big deal, you just need to scan Aura's 1,000-page application package.

The Ausra move follows the commission's Oct. 31 vote to greenlight for review BrightSource Energy's planned 400-megawatt power station complex to be built in the Mojave Desert on the Nevada border.

Ausra, backed by A-list venture capitalists Vinod Khosla and Kleiner Perkins Caufield & Byers, has signed a 20-year power purchase agreement with utility giant PG&E (PCG) for the greenhouse gas-free electricity generated by the Carrizo plant in eastern San Luis Obispo County. BrightSource (backed by Morgan Stanley (MS) and VantagePoint Venture Partners), meanwhile, continues to negotiate with the utility for a 500-megawatt power purchase deal.

Nevada gets nation's first solar power plant factory

Here's another sign that Big Solar's time has come: Silicon Valley startup Ausra is building the U.S.'s first solar power plant factory.

When the 130,000-square-foot facility goes online in April outside Las Vegas, robots will assemble mirror arrays and other equipment that will then be trucked to solar power plant building sites in California and the Southwest. Ausra, backed by venture capitalists Vinod Khosla and Kleiner Perkins Caufield & Byers, signed a deal with utility PG&E (PCG) in November to supply electricity generated by a 177-megawatt solar thermal power station to be built on California's central coast.

"Steel, flat glass and standard boiler pipe flows into the factory and completed solar fields come out ready for installation," John O'Donnell, Ausra's executive vice president, told Fortune's Green Wombat from Nevada over the din of construction noise. "We wound up working with one of Australia’s leading builders of car production systems to develop robotic assembly, weld, bond and paint systems for the mirror units."

Ausra will deploy large arrays of long mirrors that concentrate sunlight on water-filled pipes that hang over the reflectors. As the water is heated to 545 degrees Fahrenheit the resulting steam drives a standard turbine to generate electricity. O'Donnell says the Las Vegas factory, located near McCarran International Airport, will employ about 50 people and be able to produce 70 megawatts worth of solar equipment a month -- implying Ausra has many more big power deals on the table.

The facility marks the emergence of Nevada as a player in the solar power industry. "We see Nevada as one of the best markets for solar power," says O'Donnell. "It has the business climate, the solar resource and a rapidly growing market for electric power. The main reason for being here is the combination of a transportation center, a workforce and a central location for where we think all the power plants will be. We looked at locations in California, Phoenix and here. Taking the five-year view, we would like to build a lot of power plants in the Southwest so we asked, Where is the best location? What are the transportation options?"

Nevada's proximity to California means that solar power plants can be built on the its side of the border to ship electricity to densely populated Southern California as well as the booming Las Vegas region. O'Donnell says Nevada offered Ausra a standard package of tax incentives but nothing extra to locate the factory in the Silver State.

“As the world transitions to clean energy, Nevada will be a leader in building and delivering clean power to our state, to our region, and to our country," said Nevada Development Authority CEO Somer Hollingsworth in a statement.

Nevada will get a run for its money from sun-drenched Arizona, where Phoenix-based Stirling Energy Systems plans to build factories to manufacture Stirling dishes for solar power plants that will supply electricity to Southern California Edison (EIX) and San Diego Gas & Electric (SRE).

First Solar buys Ted Turner's green energy company

First Solar, the solar panel maker with the Googlicious stock price, announced Friday afternoon that it had acquired a solar installer backed by media mogul and environmentalist Ted Turner.

The price First Solar (FSLR) paid for Turner Renewable Energy -- to be renamed First Solar Electric -- was decidedly un-Google-like: a mere $34.3 million in stock and cash. But the deal is more important for what it says about the state of the solar industry. Increasingly, solar energy companies want to be able to deliver the complete package to customers. That means solar panel makers like First Solar -- a Phoenix-based company whose largest shareholders are the Walton heirs -- want to be able control and cash in on the booming market to install solar arrays on commercial and residential rooftops. Vertical integration, as they say. Silicon Valley solar cell maker SunPower (SPWR), for instance, bought solar installer PowerLight last year and has seen business grow as its panels appear everywhere from Palo Alto rooftops to Portuguese solar power plants. In China, meanwhile, solar company Trina Solar (TSL) makes silicon ingots, wafers, and modules. It recently announced it will begin producing its own polysilicon, the raw material of solar cells.

• First Solar: The Google of green tech?

With the acquisition of Turner, First Solar also gets the financing relationships the company has forged that let it sell massive megawatt solar arrays to Fortune 500 firms. Turner, for examples, works with MMA Renewable Ventures (MMA) of San Francisco on deals. (Just this week SunPower announced the formation of a jointly owned holding company with Morgan Stanley (MS) to finance solar arrays for customers.) For Ted Turner, it was a fast turnaround -- he made his investment in the company then known as DT Solar just last January.

First Solar: The Google of Green Tech?

Solar panel maker First Solar’s Google-like stock price — shares soared 34 percent today to close at $224.43 — is either a sign that green tech is getting bubbly or that investors genuinely see a huge potential market in renewable energy.

Probably a bit of both. The Phoenix-based company makes thin-film solar modules for use in solar power plants or in rooftop arrays for commercial buildings. While thin-film offers lower efficiency than traditional silicon-based solar modules, it can be produced cheaper, and First Solar (FSLR) has been rapidly ramping up production. The trigger for today’s investor love was First Solar’s third-quarter earnings report on Wednesday that showed revenue spiked 106 percent to $159 million from the previous quarter and up a whopping 290 percent from a year ago. First Solar — fun fact: it’s biggest shareholder is the estate of Wal-Mart (WMT) heir John T. Walton  — also upped its 2007 revenue forecast to $480 million to $485 million from an earlier estimate of $400 million to $415 million. The stock fell back to $206.85 at the close of trading Friday.

Investors were prepped for by recent announcements from First Solar that the company would double its manufacturing capacity by the end of 2009 and that it had signed new deals with customer. Much of First Solar’s production goes to solar companies in Germany, where generous government subsidies have made the a country solar hotbed. First Solar also is benefiting from being one of the first new-generation thin-film solar companies to market. A host of thin-film startups like Nanosolar and HelioVolt — they also minimize the use of expensive silicon but use a different technology — have scored hundreds of millions of dollars in funding from venture capitalists but have yet to produce products.

Savvy investors also know that the U.S. market is poised to take off, particularly for utility-scale solar projects.  Half the states now have imposed so-called renewable portfolio standards that require varying percentages of utilities’ electricity be obtained from greenhouse-gas free sources. In California, for instance, in addition to the state’s global warming law that will cap greenhouse gas emissions, portfolio standards oblige utilities like PG&E (PCG), Southern California Edision (EIX) and San Diego Gas & Electric (SRE) get 20 percent of their power from renewable sources by 2010 and a third by 2020. They’re going to need a lot of solar power plants to meet that mandate.

That explains why other solar module makers have experienced a similar run-up in their stock. For instance, SunPower (SPWR), which makes solar panels used in residential and commercial arrays as well as in photovoltaic power plants, has seen its shares spike 81 percent over the past three months to close at $141.93 on Thursday. That’s a 322 percent premium over what the stock was trading a year ago.

Berkeley approves first-in-nation solar homes financing plan

The Berkeley, California, city council Tuesday night greenlighted a proposal to pay for the installation of solar panels and solar hot water systems for any homeowner or commercial building owner in a move to dramatically boost local use of renewable energy. Property owners would retain ownership of the solar systems, paying back the cost over 20 years through an assessment on their annual property tax bill.

“We’re off and rolling,” said Berkeley Mayor Tom Bates after the city council unanimously gave initial approval for the Sustainable Energy Financing District.

Cisco DeVries, Bates’ chief of staff who devised the municipal solar financing proposal, said the city hopes to start signing up homeowners by June 2008. But first it must hammer out the legal and financial details. The city will likely float a bond to obtain millions in bank financing to pay for homeowners’ solar arrays.

“The banks and others have been very interested in this,” said Bates. “The banks that Cisco and I have had conversations with have been very encouraging.”

City manager Phil Kamlarz said Berkeley should be able to obtain a lower interest rate than commercial home equity loans as the property tax assessment will act as a lien, putting banks first in line to collect in the event a property owner defaults.

“We’re looking at what’s the benchmark to make this thing work and right now its less than 7.5% so we’re going to try to make this less than 7.5%,” he told council members.

A property owner would choose a solar installer from a city-approved list. It appears to be a win-win situation solution to the high cost of going solar. The homeowner immediately begins saving money on electricity bills without incurring the $15,000 to $30,000 upfront cost of installing a solar system. They also usually get a boost in their property value from the solar array and the property tax that pays for the system is deductible on their federal income tax return. When the house is sold the solar array and the tax assessment remain with the property, passing to the new owner and thus further diluting the cost of the system.

Bates said other cities have approached him about replicating the Berkeley initiative. The city has won the backing of utility PG&E (PCG) and the solar industry has, not surprisingly, been enthusiastic about a program that promises to expand the market for solar panels made by companies like SunPower (SPWR) and Sharp as well give installers more work.

“This is going to create green collar jobs,” said Bates.

Berkeley’s left-wing politics often puts it on the fringe of the U.S. mainstream but when it comes to environmental policies, the Bay Area city has led the way. Berkeley, after all, was the first city to adopt curbside recycling decades ago, now common even in some of the reddest of red states.

“The power of this is really expanding it beyond Berkeley,” noted one council member.

PG&E's latest Big Solar power deal

PG&E this morning finally consummated a long-expected solar power deal with Silicon Valley startup Ausra, agreeing to buy 177 megawatts of green electricity generated by a solar thermal plant to be built by the company on California's central coast. As Green Wombat reported Friday, Ausra -- backed by marquee venture capitalists Vinod Khosla and Kleiner Perkins Caufield & Byers -- has filed a development and licensing application with the California Energy Commission for the project, called the Carrizo Solar Energy Farm.

With its latest power purchase agreement, PG&E (PCG) has committed to buying more than 1.2 gigawatts of greenhouse-gas free electricity from three large-scale solar power plants -- enough to light nearly a million homes. Construction of the Ausra power plant is expected to begin in 2009 and go online the following year. Terms were not disclosed -- they never are in power purchase deals -- but Ausra revealed in its Energy Commission application that the agreement runs for 20 years. The company, which decamped to Silicon Valley from Sydney last year, claims that its Compact Fresnel Linear Reflector system -- long flat mirrors that focus the sun's rays on water-filled tubes to create steam that drives electricity-generating turbines -- will produce power at costs competitive with natural gas-fired plants. A pilot power plant (Ausra photo above) is up and running in Australia. The Carrizo solar farm will be a boon for the San Luis Obispo County economy, employing 350 workers during construction and creating 100 permanent jobs, according to Ausra.

Carrizo will be the company's first solar power station in the U.S., though in September Florida utility FPL (FPL) announced it would build 10-megawatt demonstration plant using Ausra's technology as well as a 300-megawatt version if all goes as planned. Ausra executives have told Green Wombat they anticipate rolling out enough solar farms to produce at least a gigawatt of electricity over the next few years.

That might be taken as so much Silicon Valley hype, and only time will tell if the technology lives up to its promise, but regulatory and economic trends indicate that deals like the PG&E-Ausra agreement is just the beginning of a wave of Big Solar projects. California's investor-owned utilities -- PG&E, Southern California Edison (EIX) and San Diego Gas & Electric (SRE) -- face a 2010 deadline to source 20 percent of their electricity from renewable sources, with the ante rising to 30 percent by 2020. Those utilities are actively negotiating gigawatts of solar power deals, sources tell Green Wombat. Meanwhile, California-based solar power companies like Ausra and BrightSource Energy, as well as a host of overseas competitors, are moving to license prospective projects, confident they'll secure power purchase agreements with utilities as well as the financing to build their solar power plants. That Morgan Stanley (MS) has quietly invested in BrightSource -- the company is negotiating a 500-megawatt agreement with PG&E -- is but the latest sign that Wall Street is looking to profit from Big Solar.

Even California's green governator weighed in on the PG&E-Ausra deal. "Today's agreement between PG&E and Ausra highlights how clean energy will create jobs in California while delivering a reliable source of renewable energy," said Arnold Schwarzenegger in a statement. "I'm pleased to see California companies rising to the challenge of AB 32, California's historic initiative to reduce carbon emissions and combat climate change. Clearly, California continues to lead the nation in clean energy research, development and generation."

Big solar power plant planned for California’s central coast

Silicon Valley's solar boom continues with Ausra, a Palo Alto startup backed by venture capitalist heavyweights Vinod Khosla and Kleiner Perkins Caufield & Byers, filing an application to build a 177-megawatt solar power plant on California's Central Coast.

Ausra's lodging of its 1,000+ page "application for certification" with the California Energy Commission last week is another sign the company, which relocated to Silicon Valley from Sydney last year, is about to sign a major deal with a California utility. Khosla has previously said Ausra is negotiating with PG&E (PCG). In its application, the company stated that the San Luis Obispo County project, called the Carrizo Energy Solar Farm, would begin providing greenhouse gas-free electricity to "a major California utility" by June 2010 under a 20-year power purchase agreement. If the Commission licenses the project - at least a year-long process - construction would begin in 2009. In September, Florida utility FPL (FPL) announced it would use Ausra's technology for a planned 300-megawatt solar power plant.

While there's no shortage of solar startups with big plans for Big Solar, only three companies have actually taken the expensive and time-consuming step of filing a construction application with the California Energy Commission. (On Wednesday, Oakland, Calif.-based solar company BrightSource Energy cleared a major regulatory hurdle when the Commission signed off on its application for a 400-megawatt Mojave Desert power plant and began the licensing process.)

The Carrizo solar thermal power plant will deploy 195 long rows of flat mirrors to focus the sun’s rays on tubes of water suspended over the arrays. The superheated water creates saturated steam that will drive two electricity-generating turbines, to be supplied by either GE (GE) or Siemens (SI). While the efficiency of Ausra's compact linear fresnel reflector system is lower than competing technologies, company executives claim they will able to drive down the costing of producing solar electricity to make it competitive with natural gas. (For more on Ausra, see Green Wombat's previous post.) Unlike most solar power plants in the works for California, Ausra has chosen not to locate its facility in the Mojave Desert, where solar sites are sun-drenched but are often on government land and far from transmission lines. Instead, the Carrizo project will be built on 640 acres of old ranch land on the Carrizo Plain, where Ausra will just need to construct a 850-foot transmission line to connect to the power grid.

"Ausra Inc.’s (Ausra) proved, proprietary technology significantly reduces the cost of a solar thermal power plant and is thus capable of significantly reducing global carbon emissions by generating low-carbon electricity on a commercial scale at competitive prices," the company stated in its application.

California’s first Big Solar power plant in 16 years clears hurdle

Green Wombat happened to be chatting with BrightSource Energy CEO John Woolard yesterday at the solar power startup’s Oakland, Calif., offices when an executive burst into a conference room with big news: the California Energy Commission had accepted BrightSource’s application to be build the first large-scale solar thermal power plant in the Golden State in 16 years. “We were found data adequate this morning by the CEC,” said Doug Divine, vice president of project development. “That’s huge,” replied Woolard. “It’s a big step.”

Indeed it is. In Commission-speak, being declared “data adequate” means the expensive, year-long process of assembling hundreds of pages of documents detailing the proposed 400-megawatt power plant and its environmental impact had passed bureaucratic muster. Now the Commission begins a 12-month process to review and license the project. If all goes well, ground could be broken in early 2009 on on BrightSource’s Ivanpah Solar Electric Generating System, to be built in the Mojave Desert just across from the Nevada border in San Bernardino County. (BrightSource’s artist rendering above.)

BrightSource is currently negotiating a 500-megawatt power purchase agreement with California utility PG&E (PCG), and Woolard says the company is in talks with other utilities to supply another 1,000 megawatts from seven power plants. BrightSource has applied to lease a site from the U.S. Bureau of Land Management for a second solar power plant, a 500-megawatt project to be built near Broadwell Dry Lake in the Mojave. The company has relied on venture capital for funding but Woolard revealed Wednesday that the company has also secured investment from Morgan Stanley (MS).

There’s a certain historical symmetry in the Commission’s decision. BrightSource was founded by American-Israeli pioneer Arnold Goldman, whose Luz International built the last big solar power plant in California in 1991. That was Solar Electric Generating System IX, the last of nine solar trough power plants constructed by Luz in the Mojave Desert northeast of Los Angeles and that today are mostly operated by FPL (FPL).

BrightSource has developed a new solar technology, dubbed distributed power tower, that focuses fields of sun-tracking mirrors called heliostats on a tower containing a water-filled boiler. The sun’s rays superheat the water and the resulting steam drives an elecricity-generating turbine. BrightSource is now building a 7-megawatt pilot power plant in Israel to show investors the distributed power tower is ready for prime-time. “The technology is locked down,” Woolard says.

Berkeley to finance solar arrays for homeowners

From my perch in the Berkeley Hills I look down on a sea of roofs stretching toward San Francisco Bay. A glint here and there in the California sunshine telegraphs that someone has installed a solar array. But even in this most ecologically self-conscious of cities, homeowners face a familiar conundrum: cutting the utility cord and your home’s greenhouse gas emissions means coughing up some serious cash. A residential rooftop solar system can cost anywhere between $15,000 and $30,000, and it can be up to a decade before the array pays for itself in electricity savings. Rebates through the $3.3 billion California Solar Initiative help and the program has been a great success so far, but its goal of a million solar roofs by 2017 will cover just a fraction of the state’s households.

Now the city of Berkeley has devised an innovative plan that could dramatically increase that number and turn the nascent solar industry into a mass market if replicated. Under a solar initiative to be considered by the city council on Tuesday, Nov. 6, Berkeley would finance the installation of solar arrays and solar hot water systems (more on that later) for any homeowner or commercial building owner. You choose an installer from a city-approved list and retain ownership of the solar system, paying back the cost over 20 years through an assessment on your annual property tax bill. “Over next decade we could have solar on 25 percent of the buildings in Berkeley,” Cisco DeVries, chief of staff for Berkeley Mayor Tom Bates, told Green Wombat. The federal government is supporting the Berkeley initiative — the first of its kind — and California’s largest utility, PG&E, backs the plan.

Here’s the game-changing aspect of Berkeley’s proposed Sustainable Energy Financing District: When you sell your home the solar array and the tax surcharge stays with the property, passing on to the new owner. In other words, there’s little risk that you’ll lose money by going solar. And given that a solar array generally boosts your property value — in California, at least — you’ll likely to come out ahead. (When Green Wombat’s Fortune magazine colleague, Michael Copeland, installed solar on his new Berkeley home, the appraised value immediately jumped nearly $13,000.) What’s more, as a property tax the solar assessment is a deductible on your federal income tax return. Banks now offer solar home equity loans that similarly allow property owners to install an array with no upfront costs. But the catch is that when you sell your home, you pay back the loan from the proceeds. With the city financing your solar array, you’re just on the hook for the annual property tax surcharge for the time you own your home.

Given that the city will likely put up a bond to borrow millions of dollars, DeVries expects to obtain a lower interest rate than what would available through a solar home equity loan. “Because this is an assessment on your property bill, effectively a lien, it’s a very secure position for financing,” he says. “In event of foreclosure, it’s paid before the mortgage.”

The program also will finance the installation of solar hot water systems, which for Berkeley and other temperate zone cities could be a real environmental and economic boon. Solar thermal systems that tap the sun’s rays to heat water are widely used in countries like China but have not caught on in the United States. But they make perfect sense for cities such as Berkeley, where moderate weather means that much of residents’ utility bills is not for electricity used to power energy-sucking air conditioners but for natural gas that heats water for bathing, cooking and running dishwashers. “You would be able to displace natural gas and get a much more direct environmental benefit,” says David Rubin, PG&E’s (PCG) director of service analysis, who helps run the utility’s solar rebate program. Solar hot water also will help Berkeley meet a voter-approved mandate to fight global warming by reducing the city’s greenhouse gas emissions 80 percent by 2050.

Just how much extra homeowners will pay on their property tax bill depends on the size of the solar array they install and the terms of the financing the city is able to arrange. But DeVries says some preliminary calculations show that a $15,000 solar array might add $1,300 to a homeowners’ annual tax bill. (It should be noted that Berkeley residents are accustomed to such surcharges. Green Wombat just got his 2007-2008 property tax bill and counts 18 local surcharges, ranging from fees for mosquito control to school classroom-size reduction.) While it will hit them in the pocketbook at tax time, Berkeley homeowners, if they install the appropriate size solar array, can count on free electricity year-round. California is a so-called net-metering state, which means that electricity produced from a residential solar panels is fed into the power grid; in return homeowners receive a credit that can zero out the cost of the energy they consume.

No surprise that the solar industry is enthusiastic about the Berkeley’s initiative, which has the potential to provide a big boost to their business if other cities copy the program. Among those that stand to benefit are installers and solar cell makers like SunPower (SPWR) and Sharp. “It just seems like it’s a great model for other cities to look at and hopefully to emulate because it really advances homeowners’ access to solar,” says Ron Kenedi, vice president of Sharp Solar, one of the world’s biggest solar panel makers. Sharp supplies arrays to many of the installers Berkeley is likely to include in its program. “We found that solar powered homes are easier to sell and move faster on the market. And they gain value over time.”

Says Barry Cinnamon, CEO of solar installer Akeena Solar: “It’s going to raise awareness of solar. I think there will be a big spill-over effect, especially if starts to work. If they can aggregate the financing, it definitely helps lower the cost of solar.”

DeVries has been meeting with solar installers and already has had discussions with PG&E about what support the utility can provide to the program. For PG&E, a big spike in residential and commercial solar could potentially ease the cost and environmental impact of peak power demand. “Having the city finance solar through a property tax assessment is a good idea,” says Rubin. “Additional amounts of solar do help reduce demand.”

Lest you think this is just another wacky notion from Berkeley’s left-winging politicos and social engineers, consider that two Bush administration agencies have lined up in support of the initiative. The U.S. Department of Energy has given Berkeley a $200,000 grant that can be used in part to promote the Sustainable Energy Financing District while the U.S. Environmental Protection Agency is about to sign off on another $160,000 to get the program off the ground and create a guide for other cities.

If approved by the city council next week, DeVries expects to begin signing up homeowners and business owners by June 2008. “I just got an e-mail from a large-scale commercial property owner interested in the program,” he says.

Solar startup GreenVolts scores $10 million

Last year's California Clean Tech Open winner GreenVolts is a poster child for how a startup can capitalize on the startup contest to bootstrap itself into some major deals. Working from a San Francisco office provided by utility PG&E (PCG) as part of its contest winnings, GreenVolts earlier this year scored a contract with its benefactor to build a 2-megawatt solar power station using the solar startup's high concentration photovoltaic technology. The company's microdishes track the sun and focus its rays on small but highly efficient solar cells. Rotating platforms each hold 176 of the dishes.

So it was appropriate that GreenVolts CEO Bob Cart announced last night at this year's Clean Tech Open ceremony that the company had raised $10 million in its latest round of funding. The company also said that its demonstration solar power plant for Spokane, Wash.-based utility Avista (AVA) had begun generating electricity. Avista had made an earlier investment in GreenVolts and participated in the latest round, which was led by Greenlight Energy Resources.

California's Solar Success

Californians are going solar at record rates, according to a new report assessing the performance of the the $3.3 billion California Solar Initiative. The program, which began in January, offers rebates to homeowners, businesses and non-profits that install solar panels. Between January and mid-September, the CSI program has received 5,109 applications representing 160 megawatts of solar energy, according to the study by the California Public Utilities Commission. "In the first nine months alone, requests for CSI incentives are on track to exceed California’s total installed solar from the previous 26 years,"  the report's authors write. The ambitious goal is to generate 3 gigawatts of solar electricity from solar arrays by the time the program ends in 2016.

About 90 percent of the applications received this year are for residential rooftop solar panels, but the arrays being installed by business, governments and non-profits represent 87 percent of the megawatts of green electricity that will be generated. In July, utility PG&E (PCG) was being flooded by 50 to 90 applications a day. In fact, Northern Californians have been the most enthusiastic about the solar program, judging by the fact that the San Francisco-based utility has received about 70 percent of the rebate applications.

The state currently pays a rebate of $2.50 per watt generated by a solar array. For a real-life example of the bottom line cost of going solar in California, check out the Fortune magazine story Green Wombat wrote tapping colleague Michael Copeland's experience installing panels on his Berkeley home. But don't be in a hurry to get that rebate - it took an average 117 days for PG&E customers to receive their checks while Southern California Edison (EIX) customers had to wait 135 days, according to the report. San Diego Gas & Electric (SRE) customers got their rebates the fastest, with an average 113 day wait. One way to avoid spending months checking your mailbox is go with a solar installer that deducts the rebate from the cost of the solar system upfront, as Copeland did.

The California Public Utilities Commission acknowledged that it's too soon to predict whether Californians will continue to install solar panels at the same rate has they have in 2007, but the commission predicted CSI would outperform past solar incentive programs.

Fat Funding for Thin-Film Solar Startup

Thin-film solar startup HelioVolt has closed its latest round of financing, raising a total of $101 million since August. The Austin, Texas, company has developed flexible solar cells that it says can be integrated into building materials like roofs, skylights, windows and skyscraper facades. With its latest round, HelioVolt has put itself on equal financial footing with Silicon Valley thin-film startup Nanosolar, a VC favorite. HelioVolt and Nanosolar use copper indium gallium selenide as a semiconducting material rather than expensive silicon. Although the efficiency of thin-film solar is less than conventional photovoltaic panels, the CIGS cells can be printed on rolls of flexible material at lower costs. HelioVolt will use its $101 million to build factories, which it plans to locate near manufacturers of building and construction materials. Nanosolar, meanwhile, is building a thin-film factory in San Jose. While CIGS thin-film startups have yet to produce a product, investors appear to be patient, judging by HelioVolt's latest round. Among the investors are Sequel Venture Partners, Noventi Ventures, Passport Capital, Paladin Capital Group, Masdar Clean Tech Fund, New Enterprise Associates, Solúcar Energia, Morgan Stanley Principal Investments (MS), Sunton United Energy, and Yellowstone Capital.