Today, Chevron Mining Inc., a subsidiary of oil major Chevron Corp, announced that sister company Chevron Technology Ventures (CTV) will build a one megawatt concentating-photovoltaic (CPV) project on CMI's molybdenum mine in Questa, New Mexico, which is slated to begin operation later this year. Confused yet? If not, then how about this: the project represents a departure from Chevron's normal solar development strategy, which is to use its other subsidiary Chevron Energy Solutions (CES) to construct and finance projects. This is what happens when a company Chevron's size gets into the solar project development game.

Let's take a step back. Chevron has been developing PV projects, mostly through CES, for years. Its primary clients, as in this case, have always been Chevron Corp.-owned sites such as refineries, offices, and oil fields. CES has about 22 MW of operational PV capacity and at least another 50 MW in the pipeline. Its largest planned project is s 45 MW system in Lucerne Valley, Calif. With a signed PPA from Southern California Edison, it is expected to begin construction this year and begin operation in 2012. The project will use First Solar CdTe modules and will be constructed in two phases (20 MW and 25 MW).

Now, on to today's announcement. In the presence of Governor Bill Richardson, Chevron Mining, Inc. announced that its New Mexico site would soon be home to a one megawatt CPV installation using a Concentrix Solar GmbH system. Although a one megawatt project is nothing to scoff at, it isn't usually big news. But this announcement warrants consideration for four reasons.

First, once operational, it will become the largest CPV project in the United States. This says as much about the CPV industry as it does about the project itself. The CPV market has been slow to grow, and significant cost reductions are hard to achieve with no real manufacturing volume. But there have been a number of recent high concentrating PV project announcements, so it's unlikely the Chevron project will retain the title for long.

Second, the fact that the project is being developed by CTV, rather than CES, tells us something. CTV is essentially the venture capital arm of Chevron, and its announced solar investments to date have been Brightsource Energy (CSP) and Konarka (Organic PV). CTV's mission is to "identify, acquire, test, and validate and -- if appropriate -- help integrate" new technologies into the rest of Chevron's business. Concentrating PV is indeed a new technology, so it makes sense that CTV would develop this project. But if this project goes well, I wouldn't be surprised to see CTV announcing an investment in or acquisition of a CPV company.

Third, the project is yet another example of New Mexico's rapid ascension as a state solar market, as we've been saying for months. Given its high insolation and unique incentive structure, New Mexico is poised to become one of the main second-tier solar markets despite having only one megawatt cumulative installed at the end of 2008. Since we predicted this in our December report The United States PV Market Through 2013: Project Economics, Policy, Demand and Strategy, New Mexico's utility-scale PV project pipeline has grown to over 400 MW.

And finally, power from the Chevron project will be sold through a PPA with local utility Kit Carson Electric Cooperative. Seriously.

Next up: Exxon inks a deal with Daniel Boone Power & Light.