California, take a good look at the cost structure of the Ivanpah solar energy project, which is to be built over the next three years in the Mojave Desert along the California-Nevada border. Appreciate that BrightSource Energy -- the Oakland, California-based firm that is developing the $2 billion project -- was able to secure a guaranteed loan from the federal government and combine it with a 30 percent grant, in order to make the three-project mega-plant happen. Now know this: such a financing structure may never be possible again.
It's not because lawmakers fail to recognize the benefits of such a plant. Ivanpah, when fully operational, will be able to power 140,000 average American homes each year. It will be, by far, the largest such plant in the the world and, according to the New American, it will more than double the amount of domestically produced commercial solar thermal power. Construction of Ivanpah alone will create 1,000 jobs and, combined with eight other solar thermal projects, will give birth to approximately 8,000 clean energy American jobs.
But the two financial incentives that played a key role in making the Ivanpah project possible will soon expire. The government loan guarantee program will expire next September and the opportunity to receive the 30 percent tax credit in cash form will end this calendar year. And with the two programs unlikely to be extended regardless of which political party takes control on election day, a high-unemployment, cash-starved state like California is unlikely to pick up the tab left behind by the expired incentive programs. Add that to that the fact the electricity from solar thermal plants -- which produce energy at 13-17 cents per kilowatt-hour (kWh) -- is competitively priced but still higher than power generated by natural gas, and you may question how many solar thermal plants will be built in the near future. Consequently, there's doubt as to whether lenders will back similar endeavors in the future.
Then there's also the entire wildlife issue, which has some environmentalists so fired up that they're threatening to sue BrightSource for disturbing the habitat of lizards and tortoises in the area. While it's unclear whether a lawsuit would be successful in hampering construction, it does force Californians -- and Americans in general -- to consider the balance between the preservation of local habitats and the creation of clean energy and green jobs.
So you tell us: Do the benefits of clean energy outweigh the cost of relocating species whose habitats are being built over?
Check out other Ivanpah-related stories from GetSolar: