Solar Activity Rises at Firm

Things are heating up at Burbank’s eSolar Inc. The company has raised $12.8 million this year through an on-going $30 million equity offering, according to filings with the Securities and Exchange Commission. Now the firm, which built a small solar powered utility plant in Lancaster, is going on a hiring spree. Last month, it announced it was looking to fill 14 positions, from engineers to production technicians, adding to the nearly 60 personnel it has now. The company hasn’t announced what it plans to do with the money, but there are some indications. It has spent the last two years working on advancements for its “concentrated” solar technology, which employs acres of mirrors to capture and focus the sun’s rays. The technology uses molten salt to retain the heat created by those concentrated rays, solving a problem many solar power plants have: producing power when the sun isn’t shining. The firm announced in 2010 a grant-backed project to develop molten salt technology with Charlotte, N.C. energy company Babcock & Wilcox Co. The two firms received $10.1 million from the Department of Energy for the research. The company has raised $185 million since it was founded in 2007 at Pasadena’s Idealab and is backed by deep-pocketed investors, including Google Inc. and General Electric Co. – and so far only has the small Antelope Valley power plant and other licensing agreements to show for it. The company has gone through several iterations, starting out trying to build “pre-fab” power plants, moving to building its own plant, then deciding to license its component designs. The molten salt storage development is only its latest attempt to make commercial solar power viable, but at least one analyst said it has real potential. “This is about the perception of concentrated solar plants’ efficiency,” said David Yang, a solar industry analyst at Santa Monica research firm IBISWorld. “It would make the industry as a whole lot more viable.” Emerging tech Molten salt storage isn’t exactly new. The idea has been around since the late 1990s, but most research was shelved as oil prices lowered after the world economy slowed. Now, with a renewed interest in utility-scale renewable energy projects because of looming state mandates, the idea is once again generating buzz. Concentrated solar plants involve acres of mirrors that are turned to reflect sunlight to one or two high towers placed among them. The concentrated light generates high heat, which is used to produce energy. Salt melts at just over 250 degrees Fahrenheit, and when mirrors direct sunlight at one point, the temperature is nearly five times that. By putting salt and chemicals in the tower that is the focus of the mirrors, it creates an extremely hot, melted salt slush. The salt’s properties allow it to retain the heat for nearly a week, meaning that it can be converted to energy during the nights or on rainy days, when traditional methods of solar energy storage can’t produce needed electricity. While eSolar executives were not made available for comment for this article, Chief Executive John van Scoter told the Business Journal last year that the company was looking to advance its molten salt storage research. “We’ve got experience in the form of personnel that is deep and can leverage all the work we’ve done in heliostats and plant design into the molten salt system,” he said. While it works on the technoogy, eSolar has generated cash in a variety of ways, mostly by licensing its designs for concentrated solar plants to larger firms. In late 2009, it inked a $30 million deal with Haryana, India firm ACME Group to develop solar power plants. In 2010, it signed a similar $40 million agreement with its investor, GE. (The licensing agreements are separate from any equity investment the two firms have made, according to company press releases.) Representatives from GE and ACME did not return calls or emails seeking comment. The company got off the ground with a bang one year after it was founded, announcing in 2008 that it had raised $130 million in Series A funding from the venture capital arm of Idealab, prominent Greenwich, Conn. venture capital firm Oak Investment Partners and Google. The initial funds were putatively for designing and manufacturing “pre-fabricated” CSP plants, which could be ordered by third parties and set-up by the firm. Later that year, eSolar announced it was going to build its own plant as a model, the Sierra Sun Tower project in Lancaster. The plant, which went online in 2009, cost $65 million, with the Department of Energy kicking in $19.5 million. The plant secured a power purchase agreement with Southern California Edison, so that the company would generate revenue from the power it returned to the grid. Edison spokeswoman Vanessa McGrady said that agreement has been renewed three times, most recently this month. The small-scale plant is expected to produce enough electricity to fully power 174 homes for a year. Viable solar But even with a new product, the question is if eSolar can show its investors some returns on the big money that’s been thrown at the firm. The solar energy business is notoriously risky. Most recently, there have been spectacular flame outs as domestic solar panel manufacturers have battled cheap imports that have driven down prices. But in some ways the lower costs have helped the industry, making the panels more common, more efficient and more accepted. Michael Barker, a senior analyst at research firm NPD Solarbuzz said concentrated solar power plants could eventually benefit from more efficient storage. “It took a long time for solar panels to get where they are, and to be able to be scaled down to smaller sizes,” he said. “It’s perhaps the same with concentrated solar.” For now though, rival Brightsource Energy LLC of Oakland recently shelved plans for a $2.7 billion Northern California concentrated solar plant, which would have provided power for 178,000 homes during peak hours, after concerns were raised over its cost effectiveness. “The technology is more expensive than solar panels,” said Barker. “And so that’s hurting it before it even gets off the ground.”