Solar companies roll the dice
June 24, 2006
PAONIA – Gambling that the economics of energy are changing, two new companies have proposed building the largest solar power plant in the world. New Solar Ventures and Solar Torx, both based in Phoenix, Ariz., plan to construct a solar power plant and a factory to manufacture the necessary photovoltaic cells. The 300-megawatt plant near Deming, N.M., would be 30 times bigger than the largest solar-powered plant now online, located in Germany. Company officials estimate startup costs at $1.6 billion – over six times that of a comparably sized natural-gas-powered plant. But natural gas prices have nearly doubled since 2000, while a solar plant’s everyday operating costs are close to zero. The companies are “betting on the price of gas,” says George Douglas, spokesman for the National Renewable Energy Laboratory in Golden, Colo. They’re also betting that they can get production costs low enough to turn a profit. At its cheapest, solar energy has cost about 20 cents per kilowatt-hour to produce: To sell power at the going rate of 8 to 10 cents per kilowatt-hour, New Solar Ventures will need to achieve unprecedented cost savings. The companies hope to begin producing power by 2007. The United States once dominated the field of solar technology, but a lack of government investment allowed other countries to take the lead. Now, with a recent 30 percent federal tax credit for producers of solar energy and several Western states extending credits for renewable energy, U.S. solar may be making a comeback. Nevada, Washington and California are also considering solar power plants. This article originally appeared in High Country News (www.hcn.org), which covers the West’s communities and natural-resource issues from Paonia.