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The hitch with solar power has always been its sky-high cost: the sun may be free, but the materials and the equipment needed to convert rays into electricity certainly aren’t. That’s why entrepreneurs have long been searching for a way to create a solar company with an economic model that resembles a software startup–selling a sophisticated computer program that drives cheap, commodity hardware.

Bill Gross, founder of the startup incubator Idealab, based in Pasadena, CA, believes that he’s got it: an enterprise designed to kick off what he calls a “disruptive revolution” in carbon-free energy. A serial entrepreneur who has launched more than 30 tech companies, Gross is CEO of eSolar, a Pasadena-based solar thermal venture that will go live with a five-megawatt test bed of its utility-scale technology on the grid later this summer.

But that’s only a tiny fraction of what’s to come. The privately held eSolar and its power plant operating partner, NRG Energy, have announced agreements with three electric utilities to install 500 megawatts of thermal solar capacity over the next few years.

To put that into perspective, that is more than the current 450 megawatts of solar thermal capacity that’s online in the United States today, says Daniel Englander, a solar energy analyst with GTM Research, in Cambridge, MA. And it’s a significant fraction of the total of 1.5 gigawatts of photovoltaic solar capacity currently installed nationwide.

The agreements–with Pacific Gas and Electric, Southern California Edison, and El Paso Electric–are aimed at producing power beginning in 2011. While the utilities aren’t disclosing the target price for the electricity in the contracts, Gross claims that he can deliver it at about 10 cents per kilowatt-hour–less than the typical rate for wind power or even a natural gas plant.

ESolar’s thermal power technology has only a few basic components. Giant fields of tabletop-sized glass panels track and reflect the sun. The beams shoot at towers where water is boiled to make steam that can drive a traditional turbine. Meanwhile, special software that costs $100 million to develop runs on a bank of Dell servers. The software coordinates with cheap video cameras that continually monitor the angle of the panels as the sun rises and sets.

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Credit: eSolar

Tagged: Business, Energy, solar power, electricity, solar thermal, turbines, eSolar, mirrors

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