Three years ago California regulators in quick succession approved nine multibillion-dollar solar thermal power plants. They were to be built in the desert and would generate 4,142 megawatts (MW) of carbon-free electricity. The state, it was said, was on its way to becoming the Saudi Arabia of solar.
Not any more. Today, the developers of four of those projects have since gone bankrupt and only three solar thermal power plants are under currently under construction.
In recent weeks, BrightSource Energy put on hold two new solar thermal power plants that would have generated an additional 1,000 MW. And last week, the builder of what would be the world’s largest solar station at 1,000 MW—at peak output that’s equivalent to a big nuclear power plant—downsized the project to 485 MW.
So why are big solar thermal projects in the desert fizzling, while installations of rooftop photovoltaic panels in cities and suburbs continue to set records? It’s all about money, technology and location, location, location.
Solar thermal plants are more efficient than solar panels at generating electricity and are less prone to having a passing cloud interrupt power production. The heat they generate can also be stored in molten salt and released at night to keep the turbine going.
But those advantages have not been able to compete against a 75% drop in solar panel prices in recent years. And while solar thermal power plants involve complex engineering challenges—building huge towers to hold boilers, installing tens of thousands of heliostats—developers of photovoltaic plants simply take rooftop solar panels and put them on the ground, albeit in the tens of thousands.
For risk-averse bankers, tried-and-true solar panels seemed a better bet than solar thermal. Even with a $2.1 billion loan guarantee from the US government, Germany’s Solar Millennium could not find bankers willing to put up the billions needed to build its 1,500 MW of solar thermal projects in California.