Defense contractor Lockheed Martin is building its first large-scale solar power plant – a $1.5 billion, 290-megawatt solar thermal plant about 75 miles west of Phoenix.

Under the deal announced Friday, Lockheed will build and operate the plant for developer Starwood Energy Group, which has a contract to sell the power to utility Arizona Public Service Co. when it is complete in 2013.

It's the first project under a Lockheed/Starwood partnership first announced in 2007, aimed at marrying Starwood's deep pockets and project expertise and Lockheed's experience in space-based photovoltaic applications to bring utility-scale solar power projects to Earth.

Lockheed called the 290-megawatt plant the largest of its kind in its Friday press release.

Still, it's far from the biggest contract signed between solar-thermal power plant developers and utilities hungry for renewable energy.

Oakland-based startup BrightSource Energy would appear to hold that title, with a total of 2.6 gigawatts of thermal solar power under contract to California utilities Pacific Gas and Electric Co. and Southern California Edison. BrightSource plans to build a number of plants in California's Mojave Desert to meet those contracts (see BrightSource, PG&E Sign 1.3GW Deal in California and BrightSource Inks 1.3GW SoCal Edison Deal).

BrightSource uses a "power tower" design – a field of mirrors, or heliostats, to concentrate the sunlight and heat the water atop of a central tower to make steam to power a turbine. Its first plant, a 110-megawatt solar thermal station in Ivanpah, Calif., is set to begin construction in 2010 and begin operation in 2012.

Lockheed, on the other hand, will use a parabolic trough design, using 3,000 100-meter reflective troughs to focus sunlight on fluid-containing tubes that carry the heated fluid to a heat exchanger to generate steam (see Solar Thermal: Which Technology Is Best?).

California's investor-owned utilities like PG&E and Edison are under a state mandate to include 20 percent of its power mix with renewable electricity.

Arizona Public Service also has a mandate to provide 4.5 percent of its power from renewable sources by 2014.

But its project with Lockheed and Starwood, along with its deal to buy power from a 280-megawatt solar-thermal plant that Spanish developer Abengoa Solar plans to build, should bring the utility to 9 percent renewable energy by then, according to The Arizona Republic, which also cited the $1.5 billion plant cost (see Abengoa Q&A: Heating Up the Solar-Thermal Market).

Other large-scale solar thermal projects are underway in America's Southwest, which has some of the best sunshine in the world for the large-scale power plants (see NREL Hunts for Solar-Thermal Hot Spots).

In Nevada, Solar Millennium plans to develop a 250-megawatt solar thermal power plant and sell the power to utility NV Energy. That plant is set to start operating in 2014 (see Green Light post). 

Despite the utility hunger for solar power, the high costs of building solar thermal power plants, combined with the ongoing credit crunch and economic downturn, have stymied some other startups hoping to enter the field.

In January, solar-thermal startup Ausra said it was exiting the power producing business to focus instead on selling its equipment and technology to other developers, calling the power plant building business "way beyond" the startup's capabilities (see Inside Ausra's Big Change).

And Pasadena, Calif.-based startup eSolar, which wants to develop tower-style solar thermal plants, said in February that it would sell the rights to develop 500 megawatts of its contracted projects to NRG Energy (see With NRG Deal, eSolar Shifts From Power Provider to Equipment Maker and eSolar's Transformation Continues With Indian Deal).

Lockheed and Starwood have much more money than a typical startup, of course. Their deep pockets could give them, along with other large-scale companies getting into renewable energy, a leg up during these credit-constrained times, Greentech Media analyst Daniel Englander notes (see Barbarians At the Gate).

Join experts and influencers at Greentech Media's Growth Opportunities in the New PV Market: Projects, Finance and Policy in San Francisco on July 14.