So, how has this changed the prospects for CSP development in the U.S.? And what are the prospects for long-term growth independent of existing financial incentives?

By Andrew Williams

Loans and Credits
The DOE loan-guarantee programme, developed with the intent of promoting the deployment of utility-scale renewable energy projects, including CSP, has now come to an end. In all, five projects, accounting for some 1312 MW of output, benefitted from the initiative - enjoying a total of 4235 US$ million in loan guarantees.

"The Energy Department's loan guarantee program is supporting the development of CSP projects currently under construction, including the world’s largest solar power tower park, the world’s largest thermal energy storage CSP plants, and two of the world’s largest parabolic trough plants," says William Gibbons, Deputy Press Secretary at the U.S. Department of Energy.
"These projects are helping to demonstrate a framework for the successful financing of large, utility-scale clean renewable energy projects," he adds.

In addition to loan-guarantees, the 2009 American Recovery & Reinvestment Act (ARRA) also included other mechanisms designed to promote the growth of CSP solar (as well as other renewables), including the Treasury's Business Energy Investment Tax Credit [ITC] program. The Act also allows taxpayers eligible for the business ITC to receive a grant from the U.S. Treasury Department instead of taking the business ITC for new installations. The grant is only available to systems where construction began prior to December 31, 2011.

In 2008, SEIA successfully led industry efforts to extend the 30 percent federal solar ITC and cash grant system for eight years, through December 31, 2016. According to SEIA figures, the 'market certainty' provided by a multiple-year extension of the residential and commercial solar ITC has helped annual solar installations grow by over 1,600 percent since the ITC was implemented in 2006 - equating to a compound annual growth rate of 76 percent.

Negotiating the 'Valley of Death'
According to Frank Wilkins, Executive Director of the US Concentrating Solar Power Alliance (CSPA), the Loan Guarantee Program was very good at helping energy technologies such as CSP make it through the R&D “valley of death” to commercialization. His view is that 'most' new technologies fail to become commercialized because of a lack of capital - and that loan guarantees lower risk, which makes the financing of projects that use new technology 'much easier.'

"This has been particularly important during the last several years because the recession has made much of the financial community very hesitant to fund large projects with technology that has not already been commercialized and proven successful through many previous projects," he says.
"The large CSP projects now being built were made possible by the DOE loan guarantees. The loan guarantees, however, don’t come easily. The Department of Energy has a very rigorous process for deciding which projects should receive a loan guarantee," he adds.

Wilkins points out that the ITC has been 'less important' during this time frame because the recession made it 'impossible' for many companies to take advantage of it. However, once the economy recovers, he is confident that the ITC will again become 'very important' in helping industry finance CSP projects.

"The loan guarantees and ITC are important because they enable projects to be built. These projects, in turn, enable cost reductions through industry learning how to build faster and more effectively, and the cost advantages of mass production," says Wilkins.

Around the Clock Power
Even following the end of loan guarantees, Wilkins is very confident that the U.S. CSP sector will continue to attract sufficient levels of investment - particularly as awareness of the efficiency and dependability of large-scale CSP projects increases.

According to him, once completed, the projects being built in Arizona, Nevada, and California will 'show people that CSP projects can reliably provide significant amounts of clean power.' In his view, the energy storage capability of the Crescent Dunes and Solana projects will 'disprove the popular perception that solar energy can only generate power when the sun is shining' - and he highlights the fact that recent studies carried out by the Lawrence Berkeley National Laboratory and the National Renewable Energy Laboratory show that CSP projects with storage 'also provide stability to the grid, which is important to utilities, regulators and grid operators.'
"The ability of solar to provide power day or night will give people more confidence in the use of solar energy as an alternative to fossil fuels. As that confidence grows, particularly within the financial community, it will draw more investors to CSP developers," he argues.
 

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