Solar Panels Start to Outshine Mirrors - Businessweek

Solar Panels Start to Outshine Mirrors - Businessweek:

Factories in China have been churning out solar panels so fast that prices have plunged. Just ask the folks at Solyndra, the bankrupt photovoltaic-cell maker that has gotten the Obama Administration into hot water over loan guarantees. Those Chinese manufacturers are now disrupting another corner of the solar industry: so-called solar thermal installations, which make electricity by bouncing sunlight off mirrors to boil water, creating steam that drives turbines.

At least four companies have abandoned plans for solar thermal plants in the U.S. in favor of electricity-producing solar cells, which have fallen in price by nearly half this year, according to Bloomberg New Energy Finance. That means it may no longer make sense to complete many solar thermal projects, typically vast installations in deserts that take years to build. For solar thermal, “the future in the U.S. looks very challenging,” says Brett Prior, an analyst at energy consultancy GTM Research.

In the past two years developers have switched nine thermal projects with about 4.5 gigawatts of capacity to solar panels, GTM reports. In August, Germany’s Solar Millennium made the change at a $2.9 billion plant 200 miles east of Los Angeles. Then on Oct. 6 the company sold all four of its U.S. projects to another German company, Solarhybrid, which said it planned to shift the entire operation to panels. Solar Millennium said it sold the plants to focus on thermal in other countries.

Although at least three dozen U.S. solar thermal projects remain in the works, thermal developers are struggling to raise money. Dublin-based NTR in August wrote off €42.4 million ($58.5 million), its entire investment in solar thermal, after selling two U.S. projects. Solar thermal “has not been successful to date in securing third-party funding,” NTR CEO Michael McNicholas wrote in an e-mail.

In Hawaii, Italy, and other places with abundant sunshine and high electricity rates, it’s already cheaper for consumers to install rooftop solar panels than to buy power from their local utility. By 2015 panels will have reached that point of so-called grid parity in much of the U.S., Europe, and Japan, Bloomberg New Energy Finance predicts. Over the past two years, BNEF says, solar thermal plants have trimmed the price of their power by 3 percent, to about 27¢ per kilowatt hour, while electricity from photovoltaic installations has plunged 41 percent, to 17¢. “I don’t think solar thermal will ever be able to compete with photovoltaic” on cost, says BNEF analyst Jenny Chase.

Despite the recent pullback, the International Energy Agency predicts global solar thermal capacity will reach 147 Gw by 2020, vs. about 1.3 Gw today. A big reason for the IEA’s bullish forecast is that thermal plants can heat up vats of liquid salt in the afternoon and use that energy at night to keep the generators running. “The big thing with solar thermal is storage,” says Cédric Philibert, an analyst at the IEA. “It’s cheap, and it’s very effective.”

Those sticking with mirror-based systems say the ability to store power makes the technology worth the extra cost. In Spain, where subsidies help make solar thermal profitable, some two dozen plants with nearly 1.5 Gw of capacity are being built, according to New Energy Finance. Spanish developer Abengoa says its 250-megawatt Mojave Desert project in California will continue with thermal technology. NextEra Energy’s Genesis thermal project nearby is under construction, and there are no plans to switch it to panels.

Some companies are working to keep solar thermal competitive.  While most plants today use a “trough” system in which a series of convex mirrors focus their energy on a liquid-filled tube that sits just a few feet off their surface, BrightSource Energy is betting on a technology it calls the power tower. At its Ivanpah plant in California, the company is using mirrors arranged in concentric circles over thousands of acres to focus the sun on a central column with a tank of water, which is heated to nearly 1,000F. BrightSource got a $1.6 billion U.S. loan guarantee for the project based in part on its experience as the first developer of commercial solar thermal plants. With the new design, “we were able to drop costs significantly,” CEO John M. Woolard says. “Ivanpah is the culmination of two and a half decades of work and thinking around solar.”

The bottom line: 

With prices for photovoltaic cells down 30

percent this year, solar power producers are 

switching mirror-based projects to panels.