Last week, dozens of people, including Google energy chief Rick Needham and Energy Secretary Ernest Moniz, trekked out to the California-Nevada border in the middle of the Death Valley to dedicate what is believed to be the world's largest solar thermal facility in the world.
At 392 megawatts, the Ivanpah solar thermal plant will be able to power 140,000 homes — the equivalent of all of Newark (averaging two people per household).
We covered the project when BrightSource, the main developer behind the project, first put up a stunning 3-D tour of the site.
But for all its scale and beauty, in terms of the future of renewables, Ivanpah is already irrelevant.
Solar thermal creates electricity by using mirrors to direct intense amounts of heat at a centralized collector, which is used to heat a substance like water to create steam power. Solar photovoltaic, meanwhile, directly converts solar energy into electricity through semiconductors.
If solar thermal sounds unnecessarily complicated, you're right. Solar photovoltaic has seen explosive growth in the past few years thanks to plummeting material costs, state incentives, and eco-conscious homebuyers putting up panels on their roofs. But solar thermal growth has stalled, and is expected to continue to do so. Ivanpah cost $2.2 billion. Warren Buffett paid the same amount for the world's largest photovoltaic plant just up the road outside Bakersfield. That plant will generate 1.5-times as much power as Ivanpah.
As the New York Times' Diane Cardwell and Matt Wald wrote Friday, Ivanpah probably represents an end, not a beginning.
"When BrightSource and other companies asked [investor] NRG to invest in a second thermal project, said David Crane, NRG’s chief, he responded: 'We’ve got $300 million invested in Ivanpah — let me see that work for a few months and then we’ll decide whether we want to be involved in more.' "
And here's what Lux Energy analyst Matthew Feinstein told them:
“I don’t think that we’re going to see large-scale solar thermal plants popping up, five at a time, every year in the U.S. in the long-term — it’s just not the way it’s going to work... Companies that are supplying these systems have questionable futures. There’s other prospects for renewables and for solar that look a lot better than this particular solution.”
It's not that Ivanpah itself won't be cost-effective. BrightSource locked in a 20-year power purchase agreement with local utilities that includes fixed pricing, and the vast majority of costs were borne up front, according to Shayle Kann, director of GTM Research. That means the Energy Department, which lent the project $1.6 billion, and Google, which put up $168 million, will likely see a decent return.
"So it's not so much an issue for Ivanpah as it is for any future solar thermal project," he told us in an email.
But it's a sign of how fast renewable energy technology is moving these days.
More From Business Insider