VentureBeat

Pacific Gas & Electric, the utility that services much of northern and central California, has announced plans to buy electricity from an 800 megawatt solar panel installation, a vast project many times the size of anything currently existing.

The move is somewhat surprising, because the expectation was that utilities would first work on building more solar thermal plants, which focus sunlight with mirrors to drive steam turbines, before building large plants with costly solar panels. At around the output of a nuclear plant, the PG&E project should provide power to several hundred thousand homes.

Economics usually drive such purchasing decisions, and they don’t always make sense for solar. Solar panels are generally expected to produce power for costs of over 15 cents per kilowatt hour when set up en masse (in smaller installations, like rooftops, the figure is higher). Roughly speaking, that’s at least three times what coal plants cost. Wind power goes for well under 10 cents per kWh, and solar thermal producers usually claim to be at 8-12 cents per kWh. Some estimates are listed here.

Thus the unusual aspect of PG&E’s deal. It would seemingly make more sense to work with other types of renewables to reach the 20 percent requirement for renewable energy the utility needs to reach by 2010. While costs for solar panels have been dropping, most companies would prefer to test smaller projects first. No numbers have been released for the installations, which will be in San Luis Obispo County.

One possible reason for PG&E pulling the trigger on the deal is that there is very little time left until the 2010 requirement. Solar thermal and wind require not only building the plants, but also erecting costly transmission lines from the site, sometimes several hundred miles worth. San Luis is close to the center of PG&E’s territory.

However, there’s also an existing deal with solar thermal provider Ausra to build a 177MW plant in the county, which suggests that PG&E could have contracted for more solar thermal in the same location. Instead, it went with Optisolar, a secretive thin-film solar firm that will build out a previously rumored 550MW of panels, and SunPower, a public corporation that makes standard panels, and will have 250MW of generating capacity.

Optisolar, which still says little about its technology, is also building about 100MW of capacity in Ontario, which offers hefty incentives for solar power. The thin-film silicon panels the company makes are likely very inefficient at converting sunlight to electricity, but very cheap to make.

The obvious conclusion to draw is that the economics of solar panels have changed drastically in a short time, such that giant solar farms make sense. And that seems to be the impression that all three companies are attempting to give off; for instance, a PG&E spokesperson told the NYT that the plant would be “competitive with wind power”.

However, there’s likely more to the story than is being admitted. PG&E obviously has some strong motivations to buy solar power. The question is what its contract with the two companies looks like. A standard contract involves a set purchase rate for electricity, say 12 cents per kWh for ten years, rising with inflation. That limits risk for the utility; and the risk, in turn, generally falls on the owner of the generating capacity.

What’s nearly certain is that the plants will not be competitive with wind power, which is not only very cheap, but also proven at very large scales. Solar is not yet proven at the scale PG&E is working on — and that may remain the case until the plants are built. And in the meantime, to be built at all, the plants will require a renewal of the investment tax credit, which still doesn’t look likely.

Giant radio station company Clear Channel signs with Google — The two companies announced a multi-year agreement that enables Google to sell a guaranteed portion of 30-second advertising inventory available on more than 675 of Clear Channel’s AM/FM stations.

Want to be acquired by Google? Don’t call them — Google takes deal-making seriously, responding to every e-mail pitch, but responding to only about 10 percent of phone calls, according to an interview with one of its dealmakers. In the past, Google has also used a technique called Monte Carlo analysis to size up a deal, where computer algorithms are used to answer questions.

Dekoh, an open-source challenger to Adobe’s Apollo, launches– Like Apollo, the San Jose, Calif.-based Dekoh lets you build applications that can be used offline, but which incorporate Web data once an Internet connection is made.

EBay’s Apollo product demonstrated — EBay’s application using Apollo, one of the first large companies that are offering a full-fledged product through the new technology, was demoed at the Web 2.0 Expo. Click on image at left.

Microsoft responds to Adobe’s Flash — Microsoft just unveiled its Silverlight product, which is its answer to Flash. The WSJ has a good summary. Like Flash, it is piece of software that when downloaded onto your computer lets you view Web sites with advanced features. Microsoft offers software tools called Expression Studio designed, for developers to build these features — which competes with Adobe’s recently launched Creative Suite 3. As the Journal says, this is an uphill battle for Microsoft, given Flash is already used by millions of Web sites and keeps innovating with things like Apollo.

LeapTag, another StumbleUpon-like company, launches — StumbleUpon lets you discover Web sites, and has gotten a lot of buzz. LeapTag, by contrast, wants to help you discover sites, but ones more tightly related to your expressed interests. You install LeapTag in your browser. As you surf, you tag pages you’re interested in, and LeapTag tracks this. Based on those tagged interests, it then offers up pages and other content for you to peruse. Somehow, this feels too late, and too demanding of input: When it returns results, you are supposed to vote whether you like it or not, so that it can learn more.

Dodgeball founder leaves Google — Dodgeball was an early company that let users notify their friends about their whereabouts with messages from their mobile phones. Twitter, of course, has stolen the buzz with its similar service. Dodgeball, bought a while ago by Google, was neglected, an example of how small operations can get lost within big organizations. Its founder Dennis Crowley has announced his departure. More here. This may be the first real case of big-company-disease being manifest so obviously at Google. “The whole experience was incredibly frustrating,” Crowley wrote. Besides Twitter, another company with momentum is Jaiku, a Helsinki, Finland company. Crowley’s departure follows the exit of video search expert David Lee, for StumbleUpon — and thus the wave of exits from Google picks up.

Clean-tech company fastest grower in Silicon Valley — The Merc has run its annual ranking of the valley’s largest and fastest-growing companies. SunPower, a solar company, is the fastest-growing company, tripling its sales last year. Industry data suggests solar-panel installations are growing 40 percent a year, up from earlier estimates of 20 percent. Google, though, has one of the highest profit margins of the valley’s companies, at 29 percent. The only company beating that is Linear Technology, which boasts margins of 39 percent. (Surely, the SGI reference must be a mistake?) Also, see the bigger package of stories here.

The newest tech site — The Wall Street Journal’s Walt Mossberg & Kara Swisher are launching AllThingsD.com, a new tech news site. Mossberg and Swisher are creators of the annual “D: All Things Digital” conference.

The U.S. Department of Energy has awarded $168 million to 13 solar companies, many of them Silicon Valley start-ups, in what is the equivalent of manna falling from heaven for these companies.

It is cut-throat industry, where solar projects are expensive and difficult to get off the ground, but once at high-levels of production can prove efficient and profitable.

Just last week, a group of ethanol companies were awarded similar grants, to help create alternative fuels.

These are the most valuable awards yet for the start-up community’s push to create alternative energy sources to gasoline and natural gas.

The awards are part of President Bush’s Solar America Initiative.

The latest awardees include Berkeley’s PowerLight, and its parent company, San Jose’s SunPower. Particular noteworthy are the awards to Palo Alto’s Nanosolar and Santa Clara’s Miasole, two companies that are producing really thin sheets of solar cells that can be spread efficiently across vast areas, such as parking lots or roofs of large companies.

Miasole’s grant begins at $5.8 million for the first year and will total about $20 million over three years if it meets certain targets. Nanosolar will get about $20 million over three years if it meets its milestones.

More details here.

Solar panel maker SunPower has agreed to acquire solar intaller PowerLight for about $332.5 million, creating a solar giant.

The purchase will bolster the wave of investments in solar; it proves there’s a way to make profits. PowerLight had received about $20 million in backing from investors, including Bay Area Equity Fund and New Energies AG.

They are the two largest solar players in the valley, and complement each others business. SunPower, of San Jose, makes efficient panels, but needs to distribute them to installer-contractors. Berkeley’s PowerLight, a leading installer, will help grease that process. See Merc story by Sarah Tribble.

The deal includes $265 million immediately, and the $67.5 million balance to be paid in two to four years.

TJ Rodgers is chief executive of Cypress Semiconductor, which is the primary shareholder of the fast-growing silicon panel company, SunPower.

SunPower has excelled in the market by focusing on making silicon more efficient — even if silicon looks feeble compared to promise other, newer materials. CIGS (copper indium gallium selenide), for example, is cheaper and more flexible, scientists say — it can be sprayed like paint onto just about any surface.

But Rodgers, an outspoken Ayn Rand adherent, says silicon has been studied so much in recent decades, and is therefore so reliable, that his company will wipe out newcomers like Nanosolar, which is unveiling a product based on CIGS.

“Silicon has a reliability record which is unmatched by any other material,” he told CNET. “They could rename the company NanoDollar, because that’s all they are going to be left with after we get done kicking their butt,” Rodgers said referring to Nanosolar.

This is a counterpoint to the comments of venture capitalist Vinod Khosla, about how science trumps everything — when it comes to multiplying resources. Translation of science into actual business application is unpredictable, and can take a long time for superior science to take over a market.

We’ll see if this is true for Nanosolar, which is due out on the market soon.