With the California and federal governments again offering hefty incentives for renewable energy, Goldman is back, this time with even grander ambitions. In 2006 he founded Brightsource Energy in Oakland, CA; having raised $160 million in venture capital and corporate investments, it now plans to build a series of power plants with a combined capacity of more than four gigawatts. It will use a newer version of the Luz technology that achieves far higher temperatures; and instead of heating a network of oil-filled tubes, it uses tens of thousands of mirrors to concentrate the sunlight on a central boiler that sits atop a tower roughly 100 meters above them. Brightsource expects its first commercial facility–at 400 megawatts, one of the largest solar plants in the world–to be operating in Ivanpah, CA, by late 2011.
But as with the solar plant in Chicago, the stimulus money will be critical to the viability of the project, which will cost roughly $2 billion to build. The federal loan program, which provides for direct lending from the U.S. Treasury, could cover 60 percent of the cost. That would require the company to raise only $800 million from investors, who then would be eligible for $600 million in the form of refundable tax credits. (The investment tax credit for renewable energy existed before the stimulus package passed, but the legislation made a key change: it now gives investors an option to receive a direct grant equivalent to 30 percent of their investment, whereas previously they had to apply the credit toward any tax liability they might have.)
Jack Jenkins-Stark, Brightsource’s CFO, is responsible for making the numbers work. “It’s all about capital,” he says. The cost of operating the plant will be minimal–“maybe $20 million a year.” But finding a $2 billion loan to cover the construction costs became nearly impossible after the commercial lending and debt markets collapsed last fall. The only practical way to find such financing these days, he says, is by pairing the federal loan with financing from investors encouraged by the government incentives.
But the federal money, as Jenkins-Stark is quick to point out, comes with plenty of risks. The loan, of course, will have to be paid back. And though finding investors willing to risk several hundred million dollars to build a giant solar plant using new technology is “much easier” with federal incentives in place, he says, “it is still very hard.”
It’s a challenge that Arnold Goldman, for one, is happy to take on. Undeterred by the bankruptcy of his earlier solar empire, Goldman now envisions massive solar thermal plants across a wide swath of Nevada, California, New Mexico, and Arizona. This time, though, Goldman could be part of something even bigger. Nearly six gigawatts’ worth of new solar thermal capacity is planned in California alone. But, says Goldman, “we need a predictable policy environment.”
Catching Some Rays
About the same time in the mid-1980s that Arnold Goldman was filling the Mojave with mirrors, Richard Swanson, then a professor of electrical engineering at Stanford University, founded his company, SunPower. Both men had visions of large solar plants spread across the desert. But while Goldman was intent on making electricity by turning the sun’s energy into steam, Swanson–an expert on semiconductors and microelectronics–envisioned using photovoltaic cells built from precisely manufactured silicon wafers.
In a dusty field in back of SunPower’s headquarters in San Jose, Swanson shows off the technology that, if all goes well, Exelon will install in Chicago. A row of large solar panels, mounted on a tracking apparatus, tilts imperceptibly every few minutes so the panels can follow the sun; each panel holds dozens of high-efficiency solar cells of the type that Swanson developed at Stanford. A solar-powered motor wheezes slightly every time it moves the panels. At night, the motor will swing the panels toward the east, waiting for the next day’s rising sun.