photo: Optisolar
SAN FRANCISCO — With the financial crisis dimming solar’s prospects to become a significant source of renewable energy, utility giant PG&E on Tuesday said it will spend $1.4 billion over five years to install 250 megawatts’ worth of photovoltaic panels in California while contracting with private developers for another 250 megawatts. PG&E chief executive Peter Darbee said the utility is also prepared to be a “green knight,” rescuing distressed big centralized solar power plant projects by providing financing so they can get built.
“We have contracted for 24% of our energy to be renewable and we’re concerned whether our [developers] will have access to capital,” Darbee said at PG&E’s San Francisco headquarters during a press conference. “We think financing for these projects may be in jeopardy. PG&E is well-positioned with its $35 billion balance sheet to step up and help.”
PG&E’s (PCG) move to take a direct role in obtaining the renewable energy it needs to comply with California’s global warming laws could be big business for solar module panel makers and installers like SunPower (SPWRA), Suntech (STP) and First Solar (FSLR). The action was prompted in part by a change in the tax laws that lets utilities claim a 30% investment tax credit for solar projects.
Fong Wan, PG&E’s vice president for energy procurement, said most of the 500 megawatts of solar panels will be installed on the ground in arrays of between one and 20 megawatts at utility substations or on other PG&E-owned property. (The utility is one of California’s largest landowners.) A small portion may be installed on rooftops, he said.
PG&E said the solar initiative will generate enough electricity to power 150,000 homes and will provide 1.3% of the utility’s electricity supply.
“There’s no or little need for new transmission and these projects can plug directly into the grid,” said Darbee. “Given our size and our credit ratings and our strength, we can move forward where smaller developers may not be able to do so.”
The California Public Utilities Commission must approve PG&E’s solar initiative, which Wan estimated would add about 32 cents to the average monthly utility bill. An $875 million program unveiled by Southern California Edison (EIX) last year to install 250 megawatts of utility-owned rooftop solar panels has run into opposition from solar companies that argue it is anti-competitive and from consumer advocates who contend the price is too high. The state’s third big utility, San Diego Gas & Electric (SRE), has also proposed a rooftop solar program.
Wan acknowledged that objections to Edison led PG&E to design its program so that private developers would have a 50% stake in the initiative. PG&E will sign 20-year power purchase agreements for privately owned solar installations.
PG&E will also need regulators’ approval to inject equity financing into companies developing big solar power plants. The utility has signed power purchase agreements for up to 2,400 megawatts of electricity to be produced by solar thermal and photovoltaic power plants to be built by companies like Ausra, BrightSource Energy, OptiSolar and SunPower.
“We are looking at the least risky and most developed opportunities to see where we can be the most helpful,” Darbee said.
Green Wombat 
The government should make low cost interest loans to help the solar industry get up to scale. There was a provision for massive loan guarantees for the nuclear industry, that thankfully got cut out of the stimulus bill. New nuclear isn’t ready for large scale commercialization. Solar and wind are. The same money loaned for building solar thermal(CSP)with heat storage in the southwest, for instance, would jumpstart a proven technology that can provide base load power day and night. 50-100 GW of could be built before the first 1 GW new nuclear plant would go online.
Doing the same for wind would be smart too. Wind energy in the U.S. grew by 8.3 GW in 2008. Factoring in winds 35% capacity factor, thats equivalent in megawatt hours to about 3 – 1 GW nuclear plants, or 5 to 6 600 MW coal plants. We should grow this ultra clean energy even faster.
Wind energy also grew by over 6 GW in China BTW.
What I have been wondering about is if it is feasable to build solar thermal in Southern California to provide electricity and desalinize water at the same time. I know CSP can do this, it’s the geography and logistics of piping water that I don’t know enough about. Pump seawater to the solar plant for steam and cooling, and send fresh water to San Diego or LA. Southern California is going to have to tackle desalinization one way or the other. The state’s water resources just can’t support it without excessive stress on ecosystems, agriculture and other cities.
This brings PG&E’s solar energy to a whopping 2.3% of their portfolio. The primary energy investments that PG&E makes continue to be in nuclear and gas, and the company continues to be in violation of minimum CA renewable energy mandates. But why let the facts get in the way of a flashy PG&E headline… it never has before.
Richard I will try and not beat you up too much on this one but just what is this “proven” technology that will run a solar-thermal plant day and night at base load? In reality there is not a “proven” heat storage for solar-thermal. There have been some demonstrations with molten salt and Ausra wants to use hot water under pressure. The problems with these technologies is that they only offer a day or two at most of energy storage. In reality we would need a week or two of storage. One problem is even in the sunny Mojave we sometimes go over a week without sun. There is also a huge difference in the amount of electricity produced depending on the time of year. Not only are the days shorter in the winter, the sun is also much further south and has to travel through more atmosphere to get here. Now this limited solar energy storage would be great for adjusting load and extending the day. This would be a huge advantage over other renewable energy sources but would not come close to competing with other sources such as gas or nukes. Hopefully we can come up with long term storage but until then solar will only ever be a tiny fraction of the total.
Now I have no idea how you would make fresh water with a solar plant. If you were to put sea water in the steam cycle of a solar plant you would destroy it very quickly. You could use sea water in the open cooling cycle but that would only make the water more salty. Even if you could do it you would have to worry about what to do with all the sodium, calcium and other solids in the water.
It may sound like I do not like solar but I think it shows lots of promise. It just is not ready to run the country right now. I operated two of the largest solar plants for over five years and have never met anyone, in the industry, who thinks it is. Most of the industry, including me, think nukes are the way we are going to have to eventually go. I just hope it does not happen to quickly or I will be out of a job but to tell you the truth I am not very worried about it.