First Solar has entered into a contract with the Tri-State Generation and Transmission Authority to build a 30-megawattsolarfarm in New Mexico, according to a report.
The deal that will likely push this wing of First Solar's business up to 200 megawatts by 2010, according to Jeff Osborne of Thomas Weisel Partners. The New Mexico contract is worth around $98 million to $113 million, he added in a research note. The California Public Utilities Commission will also argument for and against a project for First Solar to build 250 megawatts for Southern California Edison on March 25 (see First Solar Scores SCE Panel Bid).
Meanwhile, the Rancho California water district announced the completion of a 1.1 megawatt solar system at its plant in Murrieta. SunPower built the facility and sold the power back to the water district under a contract that could save the utility 6.8 million over 20 years.
A similar large-scale solar project with a water agency is expected to be announced soon in San Francisco, according to sources.
For water agencies, it's a good deal. Roughly 19 percent of the power in California is consumed in processing and transferring water. Water agencies also have spare, fallow real estate on the roofs of their processing plants. Las Vegas' municipal water authority has installed solar panels on many facilities.
The two deals underscore to some degree how the solar industry in the U.S. is getting more German by the day. Although consumers and homeowners continue to account for a significant portion of U.S. solar sales, solar manufacturers are increasingly gravitating toward utility scale solar parks and large-scale projects, like in Europe. Utilities can get access to capital to build these things, and many are under pressure to meet mandates for renewable power. In California, utilities are supposed to get 20 percent of their power from renewable sources, not including large hydroelectric dams, by 2012.
To put the trend in perspective, many news outlets gushed back in 2006 when Google announced it had erected a 1.6-megawatt system. At the time, it was the largest private solar installation in the U.S. Since then, Applied Materials, several military bases and other customers have installed large scale systems.
The high capital cost and opportunity in this market recently set off the equivalent of a land grab. Companies such as Ausra, eSolar and Optisolar had landed the rights to build utility-scale projects. All three, though, ran out of the money and credit necessary to go through with their plans. Thus, they sold the rights. First Solar, for instance, is taking over Optisolar's role in building a 550-megawatt plant for PG&E.
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