New York Times:
NIPTON, Calif. — The long-promised solar building boom in the desert Southwest is finally under way. Here in the Mojave Desert, a dice throw away from the Nevada border, giant road graders and a small army of laborers began turning the dirt for BrightSource Energy’s $2 billion Ivanpah project, the first large-scale solar thermal power plant to be built in the United States in two decades.
The Ivanpah plant is the first of nine multibillion-dollar solar farms in California and Arizona that are expected to begin construction before the end of the year as developers race to qualify for tens of billions of dollars in federal grants and loan guarantees that are about to expire. The new plants will generate nearly 4,000 megawatts of electricity if built – enough to power three million homes.
But this first wave may very well be the last for a long time, according to industry executives. Without continued government incentives that vastly reduce the risks to investors, solar companies planning another dozen or so plants say they may not be able to raise enough capital to proceed.
”I think we’re going to see a burst of projects over the next two months and then you’re going to hear the sounds of silence for quite a while,” said David Crane, chief executive of NRG Energy, on Wednesday after he announced that his company would invest $300 million in the Ivanpah plant.
Solar developers depend on two federal programs to make their projects financially viable. The most crucial is a loan guarantee program, expiring next September, that allows them to borrow money on favorable terms to finance up to 80 percent of construction costs.
The other is the option to take a 30 percent tax credit in the form of a cash payment once a project is built. Although the tax credit does not expire until the end of 2016, the option to take it as a cash payment disappears this year, making it far less valuable to a start-up company that is just beginning to generate revenue.
With both Democrats and Republicans promising to rein in the federal budget, it is unclear whether lawmakers will extend the programs in any form. “That could stall a number of projects and even lead to the failure of some,” said Ted Sullivan, an analyst with Lux Research, a consulting firm in New York.
Yet no one in the desert here wants to think too much about those looming clouds.
The rest here.