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Solar Thermal Plants Losing out to Photovoltaics

Financing and environmental concerns have caused some solar plant developers to switch technology.

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.

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