Bill Gross was famous during the Internet boom as the founder of Idealab, an “incubator” that hatched more than 75 companies. His best-known investment was GoTo.com, which created an online marketplace where advertisers bid for primacy in the results of Web searches–the innovation, now called “keyword advertising,” that made Google wildly rich (with the all-important tweak that sponsored and algorithmically derived results should be clearly separated). GoTo.com (which became Overture Services) was sold to Yahoo for $1.6 billion in 2003.

Of course, Gross (and Idealab) never really went away. Among Gross’s recent investments is eSolar, a TR50 startup of which he is chairman. The company hopes that with its technology, solar thermal energy–heat and electricity generated from sunlight using mirrors–will cost no more than coal-generated power. Jason Pontin, Technology Review’s editor in chief, met with Gross at the 2010 annual meeting of the World Economic Forum in Davos, where eSolar was honored as a Technology Pioneer.

TR: Why did eSolar choose solar thermal power, which has been little implemented beyond a handful of utility plants?

Bill Gross: We want to compete with coal. We looked at all of the renewable technologies that can be deployed at scale, and they were all variations of solar thermal. It has the capacity for scale because all the materials are readily available: there’s enough steel and glass to power the planet with solar thermal. Solar thermal’s potential has, so far, been theoretical, but we’re going to try to make it a reality.

TR: But how are you different from established solar thermal companies, some of which are almost 20 years old?

BG: Abengoa [Solar, a Spanish company founded in 1984] has made many solar towers, and there have been others deployed at scale. But there’s been no disruption [of fossil-fuel-generated power]. The problem is, there’s been too much civil construction: if you want solar thermal to disrupt the energy market, you need its parts to be mass-produced like an automobile. A 200-meter-tall solar tower [upon which the mirrors are focused] is a skyscraper, and it takes a year to build. So we decided to go with small towers and small mirrors, all of which can be prefabricated in a factory. We have a two-piece tower that gets erected in one day. All of our mirrors, all of our frames, fit in a shipping container, which means you can make them in China and ship them anywhere. When your stuff is smaller than a container, you switch from a few big moving elements to hundreds of thousands of small moving elements. That’s the disruptive switch we’ve made–and that posed a new challenge.

TR: You’re referring, I think, to the software eSolar developed that allows thousands of mirrors to more precisely reflect sunlight back to a tower.

BG: The software is the differentiation at eSolar. It’s challenging because all those mirrors don’t move the same way. Every mirror is moving slightly differently, bisecting the angle between the tower and the sun all day long. Other solar thermal players have to survey everything very accurately. They figure out where they think the sun should be, where the tower is, and try to bisect the angle of the mirrors mechanically. We are the only ones who have ever actually tracked the exiting beam [of sunlight] from the mirror. That’s hard to do with software, and we’ve patented it. But the reward is that when we place the mirrors, they’re not surveyed at all: we open our shipping container, we unfold our stuff, and we place it in the ground. The guys can be drunk when they place the rows; it really doesn’t matter. Our tolerance is plus or minus a foot.

TR: That’s how you’ll make your solar thermal power cheaper than existing solar thermal?

BG: Processing power is cheap, and in energy, it’s the only thing that’s getting cheaper. All other commodities, long term, are going to go up in price. That’s how we’re going to compete with fossil fuels: just pour software at the problem.

TR: What’s wrong with photovoltaic power?

BG: You’ll never be able to beat coal with photovoltaic technology. The PV cell is not the only expensive part. First Solar, a great PV manufacturer, is down to, like, 90 cents a watt for the actual panel. If they drive that down to zero, it still doesn’t matter, because the cost of skilled labor to install the PV and its low capacity factor will result in price minima [the prices beneath which products or services cannot fall, even as new efficiencies are brought to bear]. And they’re not going to get to zero, because there are expensive materials in there. For us, we will drive the price of power closer and closer to the cost of the glass, but because of our modular design, because we have prefabrication, because we’re running at triple to quadruple the efficiency of PV, they can never touch our price.

TR: Idealab has mostly invested in Internet ventures like GoTo.com. Why eSolar?

BG: I think that maybe eSolar is as disruptive an idea as GoTo. And I would like to think that as GoTo was a $100 billion opportunity for Google, this will turn into a $100 billion opportunity, too.