LOS ANGELES
Generating clean electricity that is as cheap as power from fossil fuels is the Holy Grail of green-energy companies. A new solar project powering California houses appears to be closing in on that prize.
Sempra Generation, a subsidiary of Sempra Energy in San Diego, has taken the wraps off a 10-megawatt solar farm in Nevada. That is small by industry standards, enough to light just 6,400 homes.
But the ramifications are potentially enormous.
A veteran analyst has calculated that the solar farm can produce power at 7.5 cents a kilowatt-hour, less than the 9-cent benchmark for conventional electricity.
If that is so, it marks a milestone that advocates for renewable energy have longed for: "grid parity," in which electricity from the sun, wind or other green sources can meet or beat the price performance of carbon-based fuels.
"We now have an alternative-energy source that can actually deliver cost-competitive electricity with no subsidies," said Mark Bachman, a senior equity analyst for Pacific Crest Securities in Portland, Ore.
The stock of First Solar Inc., the Tempe, Ariz., company that manufactured the solar modules for the project, has risen 20 percent since Bachman released his analysis in mid-December.
The trouble is that no one involved in the deal is willing to confirm Bachman's conclusions, not wanting to disclose valuable know-how.
What they will say is that this solar farm, known as El Dorado Energy Solar, is producing electricity at costs below anything comparable to date.
"Our contract is the least expensive solar power ever delivered in the world at scale," said Michael Allman, the chief executive of Sempra Generation.
The company has signed a 20-year deal to sell the electricity to Pacific Gas & Electric Co. of San Francisco, whose service territory covers much of Central and Northern California.
Sempra constructed the project on 80 acres next to its El Dorado Energy gas-fired power plant, about 40 miles southeast of Las Vegas in Boulder City, Nev. The solar farm uses photovoltaic panels similar to those mounted on homeowners' roofs, except the panels are anchored to the desert floor in long rows and there are 167,000 of them.
Another difference is technology. Conventional solar modules turn sunlight into electricity using a semiconductor known as polycrystalline silicon. That is the same material used in computer chips. Until recently, it had been expensive and in short supply.
First Solar uses a lower-cost semiconductor known as cadmium telluride, which it fashions into thin-film cells that are cheaper to manufacture than their silicon-based counterparts.
"It's like the Wal-Mart of solar panels," Allman said.
Allman said that Sempra planned to install another 50 megawatts of First Solar panels at the El Dorado site, and is considering a 500 megawatt project adjacent to its Mesquite Power Generating Station, a gas-fired plant near Phoenix.
First Solar's technology is proving popular with Southern California energy companies looking at supersize solar projects. In 2008, Southern California Edison placed the company's modules on a 600,000-square-foot Fontana warehouse, the first of 150 commercial buildings the utility hopes to cover with photovoltaics. If approved by state regulators, that project would deliver 250 megawatts.
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