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Favorable energy policies involving budget allocations and air quality have bolstered solar energy. The latest news is coming from the Mojave Solar Park in California and expressly from Pacific Gas and Electric that has said it will buy some of its green power.
California and other states with ample renewable energy resources are requiring their utilities to offer more green options. Their efforts are winning de-facto national support, with Congress and the Bush administration allocating more research and development into all forms of energy, including solar - precisely $2.2 billion through 2009. And with all stakeholders concerned about the threats from climate change, the green movement in particular is finding lots of support.
A key challenge is winning new capital from venture capitalists and major manufacturers of generation technologies. Such enterprises are stepping forward. The endeavor is no doubt helped by state mandates that are giving investors more confidence that they can earn handsome returns. California, for example, requires utilities to provide 20 percent of their fuel options in the form of green energy by 2010. That has motivated solar manufacturers from around the globe to start bidding on projects.
"The solar thermal project...is another major milestone in realizing our goal to supply 20 percent of our customers' energy needs with clean renewable energy," says Fong Wan, vice president of energy procurement, PG&E. "We can harness the sun's climate-friendly power to provide our customers with reliable and cost-effective energy on an unprecedented scale."
Specifically, the Mojave Solar Park project will deliver 553 megawatts. It is expected to be fully operational in 2011 and will cover up to 6,000 acres or nine square miles of the Mojave Desert. Israel-based Solel Solar Systems is providing the technology.
Solar energy now provides less than 1 percent of all energy needs in this country. Currently, 742 megawatts of solar cells are produced annually worldwide. Germany has 500 megawatts of solar energy already installed. That market, along with Japan's and the United States', accounts for 75 percent of the world's solar photovoltaic market. Globally, the market value tied to solar power is pegged at $4 billion.
Bigger Role
According to Professor Erin Baker at the University of Massachusetts Amherst, the goal is to bring down the cost of photovoltaic technology to the same level as that of competing fossil fuels, around 3-5 cents per kilowatt hour and all by 2050. But such price advantages - and the corresponding environmental breakthroughs -- can only happen if solar power can be harnessed and released when needed.
"The development of complimentary technologies, in particular low-cost storage of electricity, is critical," says Baker. She says that private-public partnerships are essential if solar power is to gain increased footing while more federal support ought to come in the forms of subsidies and other tax breaks.
Solar costs about 25 cents a kilowatt hour. That's compared to about 9 cents a kilowatt hour for natural gas and 5 cents a kilowatt hour for modern coal-burning plants, as well as 6 cents a kilowatt hour for wind energy if tax considerations are included. The good news is that the cost of solar power is falling all the time. It once stood at $1 a kilowatt hour and advocates say that it could soon cost 12-16 cents a kilowatt hour.
Nevertheless, the goal is to make solar competitive with prevailing technologies. And, initiatives such as the one in California are providing motivation to suppliers. Major manufacturers are already showing an interest in this pursuit. General Electric and Mitsubishi Electric & Electronics USA are in solar markets and in the case of GE, it says that it is planning to invest $3 billion in all green technologies. Both companies are focusing in the American Southwest where the possibilities for solar energy are highest.
Meantime, the Sandia National Laboratories is joining forces with Phoenix-based Sterling Energy Systems. The two are trying to ramp up production on a massive scale. But they got the break they needed when Sterling signed 20-year agreements with San Diego Gas & Electric and Southern California Edison to provide about 850 megawatts of solar energy to each. With those commitments, Sterling expects the incremental cost of production to fall and therefore the subsequent price per kilowatt hour.
"This will be the largest array of solar dish-Sterling systems in the world," says Chuck Andraka, the Sandia project leader. "Ultimately, Sterling Energy envisions 20,000 systems to be placed in one or more solar dish farms and providing electricity to southwest U.S. utility companies." Realistically, the Bush administration says that solar power could provide as much as 2 percent of the nation's generation mix by 2025.
Understandably, utilities and others are concerned about entering into long term agreements that involve technologies that do not have enduring track records. But, the more certainties that developers receive, the less those risks become. And their cause is no doubt helped by the fact that major American businesses are stepping up. Wal-Mart, for example, has said that it will generate as much as 20 megawatt hours per year of solar at store locations in California and Hawaii.
That commitment, if successful, would be a boon for all aspects of the solar enterprise. It would also indicate to businesses both large and small that their efforts to produce a healthier ecology can make a difference. Solar and other sustainable energy forms are not going to replace fossil fuel usage. But renewable technologies will get better and cheaper and energy policies will likely keep pace. When coupled with a growing global energy appetite, the fundamentals that underscore the green energy space will only get stronger.
More information is available from Energy Central:
California Goes Solar - Industry Rattled by Massive Plan, EnergyBiz, March/April 2006
Business Models Driving Solar, EnergyBiz, May/June 2007
For more on this topic, visit the Energy Central Generation Technologies Topic Center.
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