Dr. Fred Morse believes the single biggest obstacle to the widespread deployment of CSP technology is the U.S. Congress. According to Dr. Morse, the American Southwest has a bigger energy potential than both hydro power in the Pacific Northwest and the oil under West Texas. This is a much more refined argument than the oft-repeated statement that "if we covered all of Nevada in solar panels, we could power the world, house the orphans, and cure malaria." Dr. Morse took the NREL resource maps and refined them down, eliminating urban areas, military bases, and protected habitats to show that in Arizona alone 13,000 square miles of CSP could generate a nameplate capacity of 1.7 GW on land with a 1 degree slope with a solar energy density in the range of 6.5 kWh/meter squared to 8.5 kWh/meter squared. This is much higher than Spain's 5.5 kWh/meter squared average direct insolation. So why has Spain had more success in deploying CSP technologies than the U.S.? According to Dr. Morse, what Spain has in spades is policy, and "you need a resource in policy." The Germans proved "you can use solar energy without any solar. All you need is policy." In the United States, Dr. Morse estimates there's about 5 GW of CSP projects waiting in the pipeline, which represents about $20 billion going into the economy, including employment, materials, construction. But none of these projects are going anywhere because of policymaker resistance to broaching the topic of tax subsidy. Travis Bradford suggested the ITC could be rate-base financed, much like the feed-in tariff in Germany, which comes out to be about the "cost of a beer a month," according to Dr. Morse. The ITC is worth close to $0.02/kWh to $0.0/kWh, which plays a significant component in reducing the cost of CSP technologies. The combination of the ITC, which makes the cost of CSP competitive, with a federal RFP to motivate utilities to take up CSP projects, would create a significant future market - on the order of 26 million kWh of electricity generated annually just from the 11 states in the American Southwest. Aside from the uncertainty over extending the ITC, Dr. Morse believes the tax credits require a new formulation. Currently projects are available for tax credits when they come online. But, since it takes close to five or six years from origination to generation ramp, the inability of Congress to extend the tax credits means nearly all projects currently under contract won't be eligible for the tax credit. This has killed a lot of projects and constrained the amount of debt financing going into new projects. By changing the structure of the ITC and allowing projects to be eligible for tax credits upon the signing of a binding contract, Dr. Morse believes a lot more projects would move off the blueprints and on to the balance sheet. Policymakers account for only a third of the story here. Utilities and investors have both come out as proponents of CSP technology deployment. Utilities need to deploy affordable, reliable electricity, but "their options are closing down." Rising fuel, commodity and labor costs, in addition to the potential for some form of carbon legislation, will constrain the deployment of fossil fuel-powered generation capacity in the future. Ultimately, "without a carbon policy, electricity prices will double in the next five years." CSP technologies combined with "spinning thermal reserve is what has captured the imagination of the utilities," according to Dr. Morse. "For utilities, basically, if its big and its steam, they get it. These guys where hard hats." With utilities and investors on board, and policymakers potentially coming around, Dr. Morse sees between 2 and 3 GW of CSP installed in the American Southwest by 2010. The potential for CSP to turn into a "clean cash cow" is large, especially with long-term LCOE expected to drop to $0.05/kWh through cost reductions brought on by learning and experience, R&D, and - most importantly - scale.

Greentech Media is coming live to you all week from Intersolar North America in San Francisco. We're kicking off the week with a day long conference on concentrating solar technologies and markets, featuring industry leaders like Dr. Fred Morse from Abengoa, Travis Bradford, Hal LaFlash from PG&E, and Robert Morgan from Ausra. On Wednesday we're turning our attention to solar finance across all sections of the value chain: utility, commercial, and residential. It's not too late to sign up for that if you're in the Bay Area... Right now, Prometheus Institute alum and current SunPower engineer Libby Wayman is walking us through the current state of CSP and CPV technologies and giving us insight into the future of technology development in this side of the solar industry. I'll be back throughout the day with updates from our CSP conference, including a blow-by-blow of the talks from industry godfather Dr. Fred Morse. Please send your emails this way if you have any questions about the conference or the talks going on today or on Wednesday.