Create incentives for all to build green energy plants, etc and they will. from earth2tech.com
The biggest barrier to building all these solar thermal power plants in the Mojave desert is, unsurprisingly, cost. At this week’s Fortune Green conference the CEO of California utility PG&E, Peter Darbee, said he’s had discussions about using PG&E’s deep pockets to buy their own solar thermal power plants. It’s a big deal because utilities don’t traditionally own solar power-generating systems, and PG&E’s $36 billion in assets could potentially provide much-needed funding for solar startups to get these plants up and running in California.
“There are some very compelling financial reasons for utilities to own solar plants,” explained PG&E spokesperson Keely Wachs. “One reason that Peter highlighted is the fact that utilities can leverage their assets to get relatively less costly access to capital.”
But PG&E says there are some hurdles standing between it and the solar power-generation business, namely the Investment Tax Credit (ITC). The ITC, a tax credit for 30 percent of a solar investment, has helped to reduce the costs of building solar systems for numerous solar companies. But as Wachs notes, it doesn’t extend to the utility industry — at least not now.
PG&E would obviously like to share in this credit, so much so that Darbee said he is actively trying to get the regulation amended so that utilities could qualify. But if it’s not, he says the company will look into creating a subsidiary that would qualify, ultimately giving PG&E access to the credit.
ITC or no, PG&E still wants to own solar plants. “I wouldn’t say that a lack of the ITC would prevent us from pursuing ownership of solar plants,” Wachs told us.
Utilities are increasingly being subject to state renewable portfolio standards, which means they have to make sure a certain percentage of their energy comes from renewable sources. This is likely driving utilities to become more aggressive in getting into the power generation business.
While some utilities have started acquiring wind projects, very few have moved to own solar thermal plants. Though Southern California Edison will own its distributed photovoltaic rooftop plan, which it announced back in March. And if PG&E does decide to own a solar plant, it won’t be the first time in its history that PG&E will generate power. Wachs explained that “prior to deregulation, the corporation did own other generating entities. The company was forced to sell these assets under deregulation.”
The solar startups building these plants in the desert would certainly support the idea of PG&E’s ownership plans. Some, like the CEO of solar thermal startup Ausra, Bob Fishman (our interview with him here), said, are expecting it. “I see utilities stepping into the space and becoming owners of plants,” he said at the Fortune conference.