An increasingly rare type of solar farm goes online in California

When the huge solar farm just outside of Las Vegas called Ivanpah opened up in early 2014, many lamented that this type of solar plant, called solar thermal, could soon become a dinosaur. Late last week another of these large solar thermal farms was officially turned on, and it truly could be one of the last of this size built in the U.S., thanks to a one-two punch of changing incentives and economics.

Large utility-scale solar panel farms use rows and rows of solar panels to directly convert the sun’s energy into electricity. Solar thermal farms, on the other hand, uses mirrors to concentrate sunlight to heat liquid that produces steam and makes electricity from a turbine. These sites are essentially using the heat of the sun to produce electricity.

Abengoa's solar thermal farm Mojave Solar

Abengoa’s solar thermal farm Mojave Solar

Spanish power giant Abengoa celebrated the opening last Friday of a huge 280 MW solar thermal farm called Mojave Solar, built just outside of Barstow, California. The project can provide enough solar power for 90,000 homes in California, and was built across 2 square miles.

Abengoa said the site will generate $169 million in tax revenue over 25 years, provided a peak of 2,200 construction jobs, and now employs about 70 people. California utility PG&E is buying the power from Mojave Solar, and the facility will help PG&E meet California’s state mandate to generate a third of its electricity from clean power by 2020.

Abengoa finished another 280 MW solar thermal farm in Gila Bend, Arizona at the end of 2013. Years ago, power companies were as bullish on solar thermal farms as they were on solar panel farms, which are increasingly being constructed in the deserts of California, Nevada and Arizona.

The Topaz solar farm.

The Topaz solar farm, built by MidAmerican, outside of San Luis Obispo

But a few years ago the price of solar panels began to drop dramatically, from an average installation cost of $5.79 per watt in 2010, according to the Solar Energy Industries Association, to $2.71 per watt in the third quarter of 2014 (this is the average cost blended across all types of installations). Utility-scale solar panel installations can be as low as $1.68 per watt according to GTM Research.

As a result, some power companies that had solar thermal farms planned converted these sites over to solar panel facilities. Other companies that had developed businesses off of developing solar thermal sites cancelled projects in the U.S. that were no longer deemed economical and focused internationally.

A look at the heliostats and 2 of the 3 towers of Ivanpah. Taken from the 6th floor of the Unit 1 tower.

A look at the heliostats and 2 of the 3 towers of Ivanpah. Taken from the 6th floor of the Unit 1 tower.

But ultra cheap solar panels are only part of the headwinds facing large utility-scale solar thermal farms in the U.S. There’s also a couple of important incentives that have been changed as well.

First off, the federal investment tax credit (ITC), which delivers a 30 percent tax credit to solar project developers, is planned to be cut to 10 percent by the end of 2016. While it could be extended, the uncertainty is threatening the construction of utility scale solar farms, using both solar thermal and solar panels. The New York Times noted in an article this weekend that there are no future large solar thermal projects planned in the U.S.

Then there’s the fact that federal incentives in the form of loan guarantees are also no longer widely available for solar thermal plants. When Ivanpah was built, it used a $1.6 billion loan guarantee from the U.S. government to construct its 347,000 mirrors and three huge 450-foot towers. Likewise, Abengoa’s Mojave Solar used a $1.2 billion loan guarantee to finance construction. These types of large loans are no longer regularly coming out of the Department of Energy.

NRG Energy CEO David Crane and Energy Secretary Ernie Monitz cutting the ribbon at solar farm Ivanpah, just outside of Las Vegas

NRG Energy CEO David Crane and Energy Secretary Ernie Monitz cutting the ribbon at solar farm Ivanpah, just outside of Las Vegas

While large solar panel farms are still low cost enough that they could continue to be constructed, solar thermal farms the size of Ivanpah (392 MW, 5 square miles), Mojave Solar (280 MW, 2 square miles), and Solana (280 MW, 3 square miles) are far less likely to get built in the future. (Though, solar panel projects will also be impacted by the reduction of the ITC.)

Utilities calculate how much clean power they need (most likely to meet a state mandate) and then compare it to the cost of building a new natural gas plant, a wind farm or either type of solar farm. If natural gas plants, or other types of clean power, are cheaper than solar thermal facilities, then it’s an easy decision.

But large solar thermal farms could still find life outside of the U.S. They can uniquely store thermal energy at night, providing electricity far longer than solar panel farms without energy storage can.

BrightSource, which is the startup behind the Ivanpah site, recently announced a joint venture with China’s Shanghai Electric Group to build utility-scale solar thermal plants in China. Their first proposed project is to build two 135 MW solar thermal projects in the Qinghai province of China.

My 14 favorite energy stories of 2014

While the rest of the tech world focuses on things like Apple’s upcoming gadgets, which retailer is the latest to get hacked, or the ongoing drama around Uber, I’ve spent much of the past year (the past seven years, actually) looking at what’s going on at the forefront of energy innovation. Progress with energy — making it cleaner, more efficient and more accessible — can come in a variety of places, from university labs, within Silicon Valley startups, at big corporations, and even via government programs.

In 2014, there seemed to be resurgence of startups and entrepreneurs taking risks and daring to tackle the difficult world of energy. Perhaps they were inspired by the successes of Tesla CEO and SolarCity Chairman Elon Musk, or the Opower founders, who saw their energy data startup go public this year. Or maybe there was just a little bit more funding available to these types of strategic thinkers, after a couple years of political backlash in the U.S. and a backpedaling from energy investing by venture capitalists.

Looking back at the year, I think it’s one of the brightest ones we’ve had in awhile when it comes to the changing face of energy, using new technologies and new business models. Here were my favorite 14 stories, in chronological order, that I covered this year:

1. What 60 Minutes got right and wrong in its story on cleantech: The year kicked off with one of the most high profile — and most negative stories — to appear about the whole cleantech phenomenon in the long form television show 60 Minutes. While a lot of my peers rejected the coverage out right, I thought the producers got some things right (the VC cleantech crash angle), and some things pretty wrong (the politics and missing the solar panel boom).

Vinod Khosla – Founder, Khosla Ventures

Vinod Khosla – Founder, Khosla Ventures

2. The Hoover Dam of solar is now live in the desert of California, and why it’s important: The huge solar thermal plant Ivanpah was finally finished and started distributing electricity in early 2014. The project was one that highlighted the difficulties it takes to get a project like this built — it faced many delays, criticism from environmental groups (over desert tortoises), and also changing economics, as the cost of solar panels dropped dramatically as it was getting built (it doesn’t use panels, but mirrors to concentrate the sun). But the project also showed how the Department of Energy’s support of Ivanpah was crucial for it to get built, how a startup like BrightSource can innovate, and how companies like NRG and Google are eager to invest in clean energy.

A look at the heliostats and 2 of the 3 towers of Ivanpah. Taken from the 6th floor of the Unit 1 tower.

A look at the heliostats and 2 of the 3 towers of Ivanpah. Taken from the 6th floor of the Unit 1 tower.

3. The sheer size of Tesla’s massive battery factory could be a game-changer in many ways: One of the most interesting things to happen in energy in 2014 was the unfolding of Tesla’s plans for its battery factory, which is now planned for a spot just outside of Reno, Nevada. This is the article where I first started to realize how disruptive and unusual the idea was.

A recently raised spot of land in the Tahoe-Reno Industrial Center.

A recently raised spot of land in the Tahoe-Reno Industrial Center.

4. It’s easy to miss the meaningful parts of the Valley, if you ignore them: I went on a bit of a kick in the spring of this year, fighting back on the notion that the Valley doesn’t create anything meaningful anymore. Anyone who has followed the rise and fall of cleantech or is interested in energy innovation knows this isn’t true. A lot of times these Valley innovators are working on less sexy problems (so the media ignores them), and their innovations are taking longer to come to fruition.

Bloom Energy fuel cells.

Bloom Energy fuel cells.

5. As KiOR Crashes, it’s another cautionary tale for energy innovation: KiOR has always been a symbolic company for me when I think about some of the more unusual strategies that cleantech venture capitalists have taken around energy over the years. The company, which was largely owned by Khosla Ventures as well as Vinod Khosla personally, went public in the summer of 2011 at $15 per share, making Khosla Ventures’ share worth about $830 million at the time. But at the beginning of 2014 it was starting to falter, and by the end of the year it had filed for bankruptcy. I covered these guys from launch (first I heard of them was 2007) to the end.

One of Kior's facilities. Image courtesy of Kior.

One of Kior’s facilities. Image courtesy of Kior.

6. With Opower’s IPO, founders show meaningful tech can pay off: I was pretty excited to see Opower IPO in the Summer of 2014, and see that the company’s founders still held considerable equity at the time. Now Opower’s founders and longtime friends Alex Laskey and Dan Yates are the poster children for the growing meaningful tech movement.

Opower executives at the New York Stock Exchange ringing the closing bell.

Opower executives at the New York Stock Exchange ringing the closing bell.

7. As solar panels boom, it was the simple business model that the big energy players missed: While this wasn’t a huge story, I liked it because it shows that even in the difficult energy space there are things that entrepreneurs and innovators can do that big companies miss. Both NRG and GE lamented that they didn’t get in earlier into the solar-as-a-service financing business for rooftops that SunEdison started and companies like SolarCity are now dominating.

solar panels

8. An almond farm and a “big ass battery” show the future of energy in California: I visited the site of this flow battery in the little city of Turlock in the Spring of 2014. It stuck out in my mind because it shows how a really small company like EnerVault can use a tiny grant, and a lot of strategic thinking, to get entirely new energy technology built in very specific places for specific use cases. In this case, the battery is installed on an almond farm, and it bottles up energy from solar panels that help power an irrigation pump that waters about 300 acres of the farm.

EnerVault's battery on an almond farm in Turlock, California.

EnerVault’s battery on an almond farm in Turlock, California.

9. We don’t need solar roadways, we need to help unleash current solar panels: This story makes me laugh because there was SO much attention on it: 204 comments, some pretty interesting, some total garbage. Most of my peers in the energy tech sector (or covering it) I think agreed with my assessment, but didn’t want to come out and say it directly. After this was published, there were a variety of take-down articles written. Most people interested in sustainability are pretty nice and don’t want to come down on someone else’s project.

But a lot of readers out there across America did NOT like or agree with my opinion of solar roadways. Only time will really tell with these things, so I guess I’ll just have to review where the solar roadways project is in the spring.

solar panel

10. Behind the scenes with Tom Siebel, C3 and its data engine for the power grid: C3 has gotten a lot of flack over the years because it pivoted substantially early on away from carbon software and to energy data analytics for utilities. But I don’t think anyone should count C3 or Tom Siebel out just because their product has been a long time coming. Siebel is one of the world’s best salesmen, he’s all in on energy data, and the company has secured a large amount of customers in a short time frame. While this wasn’t one of the most popular articles, I thought it was a fun one.

Power grid

11. The Elon Musk playbook for disrupting energy: vertical integration and huge factories: I think it’s fascinating that SolarCity and Tesla are looking to disrupt energy and cars using similar businesses models. In this article, I tried to compare and contrast these methods and help entrepreneurs realize how Elon Musk is trying to scale these disruptions.

SolarCity panels on a Walmart, courtesy of SolarCity.

SolarCity panels on a Walmart, courtesy of SolarCity.

12. Behind the scenes of Aquion Energy’s battery factory & the future of solar storage: It’s exciting when startups that have been talking about a technology for years finally get to the point of commercially making and shipping it. I got a chance to check out Aquion Energy’s battery factory outside of Pittsburgh over the summer. It was still small, but represents a big leap for startups building the next-generation of grid batteries.

Battery stacks and modules in Aquion Energy's factory. Image courtesy of Katie Fehrenbacher, Gigaom.

Battery stacks and modules in Aquion Energy’s factory. Image courtesy of Katie Fehrenbacher, Gigaom.

13. The changing face of Reno: Why the ‘world’s biggest little city’ is attracting Apple & Tesla: Before Tesla announced that it planned to build its battery factory just outside of Reno, I took a trip up there and checked out the rumored Tesla factory site, as well as Apple’s yet-to-be-built-out solar farm up there. I also met with a variety of Reno officials as well as geothermal industry execs, who were in town for a conference. Reno, which has long been a gambling backwater, is slowly transforming into a high tech manufacturing hub, and Tesla’s factory will only accelerate that.

The Tahoe Reno Industrial Center. Photo by Katie Fehrenbacher/Gigaom

The Tahoe Reno Industrial Center. Photo by Katie Fehrenbacher/Gigaom

14. Lithium, the Salton Sea and a startup that’s trying to change the game: The Salton Sea is such a bizarre and fascinating place that any company trying to build something new out there would be interesting. But Simbol Materials turns heads because the startup is looking to recover lithium from geothermal plants, and it’s backed by Silicon Valley investors. I drove down to the Salton Sea in September and took a tour of Simbol’s demonstration plant in Calipatria, California.

Simbol Materials' VP of Business Development Tracy Sizemore stands in front of Simbol's demo plant that neighbors EnergySource's geothermal plant just below the Salton Sea. Image courtesy of Katie Fehrenbacher, Gigaom.

Simbol Materials’ VP of Business Development Tracy Sizemore stands in front of Simbol’s demo plant that neighbors EnergySource’s geothermal plant just below the Salton Sea. Image courtesy of Katie Fehrenbacher, Gigaom.

BrightSource actually raising $130M for solar thermal

Solar thermal company BrightSource is actually looking to raise $130 million, which is another $50 million over the amount it announced last month. The company makes solar thermal power plants which use mirrors and a boiler to produce electricity.

Behind the scenes video of the pioneering solar farm Ivanpah

This is what it feels like inside Ivanpah, the world’s largest solar thermal farm under construction. We drive along the solar mirror fields, take an elevator to the top of one of the 450-foot towers, and peek inside the assembly building at.

A mirror a minute: the Ivanpah solar farm kicks into high gear

From nine stories up the 450 foot tower at the Ivanpah solar thermal farm, the tens of thousands of mirrors look like metallic chiclets, and the workers like Doozers walking amongst them. The first of its kind solar site is in a full construction boom.

BrightSource’s Ivanpah solar project is a quarter completed

BrightSource Energy, which builds solar power plants and plans to do an IPO, has completed about a quarter, or 25 percent, of its first project, Ivanpah, which is on schedule to come online next year, the company said in a government filing on Friday.

The fate of 9 giant solar farms in Cali

It was roughly a year ago when the California Energy Commission approved nine solar farms all within a few months in order to make sure those projects could qualify for a federal program that subsidizes 30 percent of their costs. Where are they now?