It's solar power's time to shine

Though a California government mandate demanding that the state's utilities generate 20% of their energy from renewable sources by 2010 has been key in getting the ball rolling for solar thermal, the skyrocketing cost of natural gas and coal is really giving this business a spark. Just check the headlines: On Tuesday afternoon, FPL Group's (FPL, news, msgs) Florida Power & Light announced it was asking state regulators to OK a whopping 16% increase in residential bills -- just to keep up, not for added profits.

Science catches up

Florida Power, it turns out, happens to be one of the country's leaders in developing solar thermal energy, as well as wind farms. It's pure economics, not a green dream anymore. Nathaniel Bullard, a senior analyst at think tank New Energy Finance in San Francisco, told me that utilities see STE as their best hedge against fuel price variability.

If you build a natural-gas or coal plant to help you generate electricity for customers, he said, you are a "price taker" in that you have to accept the world-market cost of natural gas, over which you have no control. In contrast, if you build a wind or solar thermal farm, you are exposed to the cost of steel and labor at the time of construction, but you are never exposed to an increase in the cost of wind or sun.

"This is not science fiction anymore -- this is real stuff," Bullard said. Again, it's all business. Once a wind or sun farm has been built, you see, the entrepreneur or developer contracts with an "offtaker," or utility, to provide a certain number of megawatts of electricity at a certain price for the length of the contract.

The problem with solar up until now has been an inability to guarantee a base load, or steady amount of electricity, at all times. But new tweaks of technology from companies such as well-financed Silicon Valley startup Ausra have changed that. Its Compact Linear Fresnel Reflector, which sounds like something Doc Brown might have created in "Back to the Future" with a flip of his flux capacitor, uses some trippy "molten salt" and an ingenious heat storage system to store sunlight for up to 20 hours.

Ausra, which is hellbent to be the Cisco Systems (CSCO, news, msgs) of solar -- which is possible, I suppose, since it is financed by computer networking pioneer Vinod Khosla -- believes that since seasonal and daily patterns of solar rays correlate strongly with electricity use, its inexpensive generation-and-storage system can create enough electricity from a few square miles of Nevada desert to supply half the country with power for electric vehicles. That would be an especially neat trick because it produces virtually no air pollution.

It looks to me that price and need have come together to finally make solar thermal a normal and fast-growing part of the national energy budget. The industry likes to point out that between 1996 and 2005, U.S. utilities built 250 gigawatts of natural-gas-fired plants, now producing a quarter of the nation's total. There's now nothing standing in the way of building another 250 gigawatts of power using pollution-free solar thermal.

Continued: Solar thermal

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