Another day, another new solar power plant. At least that’s the way it seems, given SunPower’s recent spate of deals to build multi-megawatt photovoltaic solar power stations. The latest came Friday when the Silicon Valley solar panel maker announced a contract to construct an 8-megawatt solar power plant in Spain. The agreement follows a November deal for three other solar power stations in Spain totaling 21 megawatts. That in turn was preceded by an October announcement of a contract for a 18-megawatt plant in — where else — Spain.
See a pattern here? SunPower (SPWR) now has solar power plants totaling more than 100 megawatts built or under contract in Spain. Plus it constructed an 11-megawatt solar power station in neighboring Portugal and a 10-megawatt plant in Germany. It’s sole PV power plant in the United States is a 15-megawatt station at Nellis Air Force Base outside Las Vegas.
It’s no accident that SunPower has set its sights on Spain and other European markets. Spain and Portugal, for instance, offer simple so-called feed-in-tariffs that pay solar power plant operators a premium rate — typically for 15 to 20 years — for producing renewable energy. That makes the economics of financing and building solar power plants relatively straightforward in contrast to the patchwork of short-term state and federal green energy incentives in the U.S. (Witness the current upheaval in the industry over the crucial solar investment tax credit that expires at the end of 2008, and which Congress neglected to extend in the recently enacted energy bill.)
No wonder Europe is attracting renewable energy financiers like GE Energy Financial Services (GE), which financed SunPower’s Portugal plant (pictured above). “We truly believe utility-scale solar will be an incredible opportunity,” Kevin Walsh, managing director of GE Energy Financial Services, told Green Wombat at the opening of the Portugal plant last March. (That’s not to say that companies like GE don’t see opportunity in the U.S. market. Just this morning, SunPower announced that GE Energy Financial Services will finance and own five 1-to-2.4-megawatt commercial solar arrays in California being installed by SunPower for Toyota (TM), Hewlett-Packard (HPQ), Agilent, Lake County, and the Rancho California Water District.)
The built-in profit margin for solar in Spain and Portugal also makes photovoltaic power plants viable. PV plants are essentially residential rooftop solar arrays writ large that track the sun and convert sunlight that strikes silicon-based cells directly into electricity. But silicon is expensive and solar panels are relatively inefficient. So absent subsidies like feed-in tariffs, few PV power stations have been built in the U.S., which has focused on large-scale solar thermal power plants that use mirrors to heat water or other liquids to create steam that drives electricity-generating industrial turbines. The beauty — literally – of a PV plant is that it contains virtually no moving parts or bulky power blocks that contain turbines and other machinery. That means they can be built closer to urban areas and used to shoulder the load from overburdened utility substations.
Even solar panel installers are striking deals overseas. Silicon Valley-based solar installer Akeena (AKNS), for instance, developed a new solar panel system called Andalay that cuts the cost of installation for homes and businesses. The company contracted with China solar panel giant Suntech (STP) to manufacture Andalay, which will also sell the panel in Europe, Japan and Australia.