Solar Millennium Gets The Greenlight To Build The World’s Largest Solar Project In California

The US solar market took another step forward this week with the federal government’s approval of Solar Millennium’s plan to build a massive thermal power station in Blythe, California. Located between Phoenix and Los Angeles in the arid Palo Verde Valley, this thinly populated city will soon be home to the world’s largest solar project.

The Interior Department’s Bureau of Land Management delivered the final greenlight, wrapping up a (relatively swift) year-long approval process. Technically, it is the government’s first approval of a parabolic trough power plant, which uses curved mirrors to direct the sun’s heat towards a pipe that contains a heat transfer fluid. The heat from this fluid helps create steam which ultimately powers a turbine

Solar Millennium, a German firm, plans to build four plants on the expansive property with a total capacity of 1,000 megawatts— which is roughly on par with the country’s current total solar capacity. With 1,000 MW at completion, the station would be able to power more than 300,000 homes.

The hope, the company says, is to start supplying the grid with electricity by 2013. In terms of regional economic impact, Solar Millennium predicts that the project will hire 1,000 people during the construction phase and 220 permanent workers (once its operational).

In the meantime, there’s quite a bit of construction to be done which will require significant financing. In a press release, the company said it has secured enough cash for the first wave of construction, which could begin as early as this year, but acknowledged that it is heavily dependent on government incentives and pending loans.

Speaking of the federal government’s approval, Solar Millennium’s CFO, Oliver Blamberger says, “This paves the way for the start of construction of the first two 242-MW plants before the end of the year…This is also good news for our advanced talks with the US Department of Energy on the loan guarantees for which we have applied. A successful conclusion of this process would secure more than two thirds of the financing volume of the first two planned power plants through the American Federal Financing Bank.”

As we mentioned in a post on Monday, the US solar market is ramping up significantly, with capacity expected to grow roughly 30x over the next 10 years to 44G. But the capital intensive industry will need to continue to raise heaps of private capital (and benefit from generous government policies) to get there.

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LDK Solar Inks $300 Million Deal With BYD

Several big names in solar have settled from recent highs on Wall Street, but there’s still a lot of money running into the sector.

On Monday morning, LDK Solar announced that it has locked up a new two-year sales deal with Chinese juggernaut BYD worth roughly $300 million. Under the deal, LDK will provide monthly shipments of polysilicon starting on January 2011.

It’s another win for the solar wafer manufacturer, which earlier this month raised its third quarter revenue guidance about 7% to a range of $610 to $640 million. In addition to raising its outlook, LDK noted that shipments of solar wafers and modules were outpacing demand.

For its part, the diversified BYD— which makes everything from automobiles to mobile phone batteries— has made no secret of its ambitions in green tech.

Earlier this year BYD announced that it will spend more than $3 billion over five years to construct one of China’s biggest solar power battery plant in Shangluo. Meanwhile, the company has also been working on large-scale energy storage solutions and their all-electric vehicle, the e6, is being prepped for a US debut. Although BYD (which Warren Buffett’s Berkshire Hathaway has a 10% stake in) has struggled this year amid soft demand in China’s auto market, the company has seemingly maintained its aggressive stride in the green sector.

“We are very excited to add BYD, a leading high-tech enterprise that has a strong commitment to the green energy sector, as a key customer,” LDK’s CEO, Xiaofeng Peng said in a statement.

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Innovalight Chief Awarded For Making Solar Cells (And Industry) More Efficient

The chief executive and president of Innovalight, Conrad Burke, won the 2010 Ernst & Young Emerging Entrepreneur of the Year award, the companies announced today, following the ceremony in Dublin, Ireland earlier this week. The award recognizes “entrepreneurs who are building and leading successful, growing and dynamic businesses” according to an E&Y press statement.

According to Innovalight’s website its silicon ink technology improves the photon to electron conversion efficiency of solar cells by one percent, which can drive the cost of solar energy down by six percent. Solar cells are semiconductor devices that convert photons from the sun into electrical current.

The U.S. Department of Energy backed Innovalight in 2008 with a $3 million grant for:

“…Developing very high-efficiency, low-cost solar cells and modules by ink-jet printing their proprietary ‘silicon ink’ onto thin-crystalline silicon wafers. The company’s contact-less printing process has been demonstrated to significantly reduce both the manufacturing costs and the complexity required to make today’s highly efficient [solar] cells and modules.”

Under Burke’s leadership, Innovalight has developed sales through licensing and collaboration deals with solar manufacturers, rather than through the manufacture and sales of its own solar photovoltaics. The company’s customers are major manufacturers seeking to increase the megawatts-per-year that they produce per line without increasing expenditures on new equipment. These include several of China’s top solar concerns, among them Yingli Green Energy, JA Power and as of last week SolarFun Power.

In January this year, the company raised $18 million in a series D round led by EDB Investments (EDBI) of Singapore, and joined by Vertex Venture Holdings (the venture subsidiary of Temasek Holdings in Singapore) and its pervious investors: Apax Partners, ARCH Venture Partners, Convexa Capital, Harris & Harris Group, Sevin Rosen Funds and Triton Ventures. That brought Innovalight’s total raised capital, mostly from venture, to about $60 million.

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Even If Solar Grows 30X, It Will Only Be 4% Of America’s Power Capacity

For all the talk about solar, the US market for solar power still has a long way to go before it makes a real dent in the country’s overall power capacity.

On Monday morning, Bloomberg New Energy Finance, a major aggregator of green industry data released a few key projections: the US solar market is on track to grow 30x to 44 gigawatts by 2020 and could make up 4.3% of America’s total power capacity. Of this fraction, the bulk (or approximately 68%) will be in photovoltaics with solar thermal making up the remainder.  Furthermore, Bloomberg predicts that consumer traction will also move noticeably higher, with 2.4% of homes solar-equipped by 2020.

Of course, that path to 4.3% of national power capacity is not cheap. In order to get there, the US market will need to attract $100 billion in investment dollars.

The possible leap from 1.4GW to 44GW is an impressive growth curve, but these figures certainly highlight the simultaneous growth and challenge of solar installation.

As Bloomberg New Energy Finance points out, the surge in solar capacity has been supported by two crucial trends: the drop in prices (the price of photovoltaic modules has tumbled from roughly $300 per watt in the mid-20th century, to less than $5 per watt today) and the heavy hand of government support. And yet, even as solar becomes more affordable, it’s still playing catch up to other sources of energy. That may be a well known fact but it often gets muffled in the bucolic vision for solar panel farms as far as the eyes can see.

“The group’s latest analysis places the unsubsidized cost of best-in-class photovoltaic and solar thermal electrivity generation at just below $200/megawatt hour— nearly four times the equivalent cost for a coal-fired power plant ($56/megawatt hour)— and between two and four times the cost of onshore wind power, ” according to the Bloomberg report.

On the investment front, it will be interesting to see how the solar industry fares in the money race. Overall, the sector has been a major beacon for investment dollars but momentum has recently waned. According to a Mercom Capital report for the third quarer,  VC funding for the solar sector was $169.35 million on 11 deals, versus $922 million for 18 transactions in the prior quarter. On the flip side, there was strength in other funding sources (including credit lines from banks), which totaled a healthy $20.7 billion for the quarter.

(Image: Flickr/Warm N’ Fuzzy)

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