ESolar Emerges as the Dark Horse of Solar Thermal

(MoneyWatch)  Following an announcement last week that utility NRG would build 500 megawatts of solar thermal generation with eSolar designs, a Pasadena, Calif. company, has scored another coup, this time with an Indian company called The ACME Group, for development of a full gigawatt of capacity.

These are big deals, but that detail alone is not terribly significant -- other solar thermal companies like Brightsource and Solel have also set out to build huge plants. But there's something more notable about the new agreements. Specifically, I'm referring to the fact that NRG is a big utility that's mostly reliant on coal, and ACME's operation is restricted to India.

Why notable? Well, to date, estimates for how much solar thermal energy will cost, per kilowatt hour, have ranged from an optimistic 8 cents per kilowatt-hour to a fairly easily achievable 15 cents. But coal comes in at 6 cents or less, which is why the industry has steamed on, despite the rancor of environmentalists.

Reading into eSolar's choice of partners -- a coal expert and a company operating in a nation reliant on the cheapest forms of energy available -- suggests that they believe eSolar's designs can produce power for even less than the optimistic goals of other companies.

At a recent conference in Abu Dhabi that I attended, an eSolar representative making a presentation suggested that their prices might, indeed, be competitive with coal, before incentives or new taxes on the coal industry. And several months ago, when I talked to new eSolar hire Craig Tyner, a veteran of Sandia National Lab, he suggested that the company would be able to add on innovations like overnight energy storage (so there's power even without sunlight) without increasing costs too much.

All in all, eSolar is beginning to look like a formidable opponent for more established solar thermal technologies. Doubly so in the current funding environment -- before, when funding was more easily available, a company with slightly more expensive technology could still take out a large loan to build its own plant as long as it could sell the power at a profit.

Today, with partnerships becoming more important, cost will factor heavily in determining who the big players will work with. And eSolar, built from the start to be a technology licensing firm, has few barriers to working with as many other companies as it can.