* 4 big California projects switching to photovoltaic
* PV plants now cheaper to build than thermal projects
* PV is more ubiquitous and easier to finance
By Nichola Groom
LOS ANGELES, June 30 Developers of solar thermal power plants are scrapping plans to use steam technology in favor of ever-cheaper solar panels that are easier to finance and could help assuage concerns about the systems' environmental impact.
So far this year, at least four California projects, representing about 1,850 megawatts of power generation, have elected to change most or all of their technology to photovoltaic solar panels, which turn sunlight directly into electricity, from concentrating solar power, or CSP, which uses heat to create steam that powers a generator.
The projects are being developed by NextEra Energy Inc (NEE.N), Germany's Solar Millennium S2MG.DE, AES Solar (AES.N), and U.S. independent power producer K Road Power LLC. They follow switches to PV last year by two projects owned by NRG Energy Inc (NRG.N) in California and New Mexico that had been intended to use technology by solar thermal start-up eSolar.
"The pace is quickening," GTM Research analyst Brett Prior said of the numbers of projects making the switch to PV. "You can build a PV project all-in and it will cost less upfront and cost less ongoing. You will make more money on that project, and so it just makes sense to switch it."
CSP technologies come in several types, but all of them use the sun's heat to create steam that turns a turbine to create electricity.
The price of PV panels has plummeted in the five years since California mandated that the state's utilities source 20 percent of their power from renewable sources by 2010, sparking a building spree of wind and solar projects. The state fell just short of that target, hitting 18 percent, and lawmakers there eased the rule accordingly.
Since 2008, the price of PV solar modules has fallen by more than half, whereas the cost of building a CSP plant is about the same today as it was three years ago, Prior said.
Today, a PV project is able to generate power at 12 to 13 cents per kilowatt hour, according to Prior, compared with 15 to 16 cents for CSP.
That is still about double the cost of coal-fired power plants.
"PV is getting costs down today, and there are further expected cost declines in the future," Prior said.
In some cases, developers have found it easier to line up financing for PV, which is more ubiquitous than CSP.
NRG was forced to switch two of its projects to PV to meet the deadlines in their supply contracts with utilities PG&E Corp (PCG.N) and El Paso Electric Co (EE.N), according to spokesman David Knox.
Under the plan to use eSolar's technology, the company would have needed to secure loan guarantees from the U.S. Department of Energy aimed specifically at new technologies.
K Road Power, which bought the 663 MW Calico project near Barstow, California, last year, said it would convert most of the project to PV panels in part due to financing.
The project's previous owner, NTR Holding's (NTRb.CO) Tessera Solar, had planned to use a CSP technology called SunCatchers that has yet to be demonstrated on a large scale.
"PV is available now and financeable now," said Sean Gallagher, managing director of government and regulatory affairs for K Road Power. "The production of SunCatcher technology has been delayed for a couple of years. It can't be deployed as soon as PV can be deployed."
In documents filed with the California Energy Commission in March, K Road said the shift to PV technology would mean fewer workers, vehicles and heavy equipment during construction. Once in operation, the PV panels will need less upkeep than the SunCatchers, which resemble giant mirrored satellite receivers and require monthly cleaning.
Another former Tessera project, the 709 MW Imperial Valley Solar in California's Imperial County, has hinted that it is also scrapping the project's original SunCatcher technology.
AES Solar, a joint venture between power company AES Corp (AES.N) and private equity firm Riverstone Holdings, bought the project in February and wrote to California regulators in May, saying it intended to change the project to PV from solar thermal. A week later, however, the company withdrew the letter with no further details. A spokeswoman would not comment on the company's plans for the project.
NextEra's 250 MW Beacon project in Kern County, California, is also in the process of switching to PV from solar thermal, spokesman Steven Stengel said in an email. He did not provide any further details.
Some developers hope a switch to PV could help save projects stalled by environmental concerns.
Solar Millennium, for instance, is considering a redesign of its Ridgecrest project in Kern County to lessen the impact on the threatened desert tortoise and Mohave ground squirrel.
The California Energy Commission's staff had recommended against approval of the project because of concerns about the native species, but Solar Millennium spokesman Edward Sullivan said PV arrays can be slotted into the most appropriate areas.
"Our CSP is a little bit more restrictive," he said. "We have to develop 250 MW chunks, so that requires us to develop large continuous swaths, whereas PV is much more flexible." (Additional reporting by Mary Slosson, editing by Dave Zimmerman)