NRG Energy Teams With First Solar For Houston Project

(MoneyWatch)  First Solar has snagged its latest utility-scale solar deal, alongside NRG Energy. The two will build a 10 megawatt plant that will supply the city government of Houston, Texas with 1.5 percent of its energy needs, according to the Houston Chronicle.

The plant itself will come in at about $40 million, with NRG doing the financing. What's a little more interesting, though, is the model they're working under, which will combine gas and solar generation.

Houston will be paying NRG only 8.2 cents per kilowatt-hour, says the Chron. But NRG is primarily a coal-firing utility, with some natural gas plants. So the 8.2 cent figure appears to be an average for all the power that NRG is supplying under the deal. The solar component is valued at 19.8 cents per kilowatt hour.

NRG is also setting its reputation as a utility that likes to strike numerous small, innovative deals. In another example, the solar thermal plants that NRG is building with eSolar are much smaller than those being built by companies like Abengoa and BrightSource Energy. But eSolar uses a cutting-edge computer guidance technology to direct the sun's rays that it says will make its small, modular plants cheaper than the competition.

That's definitely the case with First Solar. Traditional photovoltaics are still coming down in cost from 30 cents per kilowatt hour (or more). That figure is falling fairly quickly, but NRG is obviously expecting to make a profit on less than 20 cents with First Solar's thin-film panels.

First Solar may not yet be at grid parity, as an analyst claimed late last year, but it's at least approaching the cost of the best solar thermal technology.