In the last several years costs for solar power have dropped significantly, driven by advances in manufacturing technology, improvements in efficiency, and government support, among other things. Apparently, that's led some solar power plant projects to switch from using solar thermal technology—which involves concentrating sunlight to generate high temperatures that can be used to generate electricity—for photovoltaics, solar panels that convert sunlight to electricity directly. At least that's what Reuters reported today.

Reading between the lines, the issue may also be something called bankability. Solar panels are established technology—banks have a pretty good idea how long they'll last and what the return on investment will be. Much of the solar thermal technology being deployed now hasn't been tested on a large scale for long periods of time, which can make financing harder. Indeed, in one case, "the company would have needed to secure loan guarantees from the U.S. Department of Energy aimed specifically at new technologies," the report said.

Photovoltaics may have another advantage over at least one solar thermal technology called"power tower". The technology requires arranging a field of mirrors around the tower. The placement of the mirrors is critical, and in some cases requires bulldozing a large area, which can destroy animal habitats. Concerns over desert tortoises are slowing some solar thermal projects in California. There's more flexibility with the siting of solar panels. From the article,

Solar Millenium spokesman Edward Sullivan said PV arrays can be slotted into the most appropriate areas.

"Our [solar thermal technology] is a little bit more restrictive," he said. "We have to develop 250 megawatt chunks, so that requires us to develop large continuous swaths, whereas PV is much more flexible."

But solar thermal stands a chance, especially in light of a series of DOE loan guarantees announced in recent weeks (the DOE keeps a list here). The DOE is also helping out photovoltaics. Yesterday it announced a multibillion dollar guarantee to support solar farms that will use panels from Tempe, Arizona-based First Solar.

A promising approach to reducing the cost of solar power is moving forward with the construction of an installation in Indianatown, FL, that will combine a field of solar concentrators with a natural gas power plant.

Today The New York Times has an update on the project, which the utility Florida Power and Light (FPL) announced almost two years ago, and which we wrote about here. When completed later this year, the power plant is expected to generate up to 75 megawatts of power by making use of turbines at the natural gas plant, which itself has a 3,600 megawatt capacity.

The solar concentrators generate steam, which can be used to drive the turbines. Using existing turbines and generators can greatly reduce the cost of a solar power plant. FPL says the current project reduces costs by 20 percent, according to the Times.

Similar natural gas-solar hybrid projects are being built in Egypt, Morocco, and Algeria. There's also an effort to pair solar concentrators with coal fired power plants. Abengoa, the Spanish based company that's building natural gas plants in Morocco and Algeria, is working with Xcel Energy in Colorado to build solar coal hybrid test facility. According to Abengoa, such hybrids could cut the cost of solar power by 30 to 50 percent to as low as 6 cents per kilowatt hour, which is competitive with many fossil fuel power plants.

The U.S. Department of Energy has announced a $1.37 billion conditional loan guarantee for the Ivanhoe Solar Complex in the Mojave Desert. The project, managed by Brightsource Energy, will use mirrors to concentrate sunlight, creating high temperatures that can be used to generate electricity. The complex will include three power plants that together will produce about 400 megawatts of electricity.

Basically, the guarantees would cover the loans in the case of default. The money for the loans is expected to come from the Federal Financing Bank.

One of the biggest challenges that large solar developments face is getting financing, particularly because few such solar power plants have been built. The DOE guarantees help on this front.

But other challenges remain, including getting approval from the government to actually build on the chosen sites, and clearing the National Environmental Policy Act review. The application process for the plants started nearly 3 years ago, and construction on the sites has already been delayed. Before the process is over, new hurdles might get thrown up, a possibility illustrated recently when Senator Dianne Feinstein (D-CA) submitted legislation to ban solar projects from some parts of the Mojave desert, a move that threatened several projects already in the works.