SolarReserve snags $737M loan guarantee for solar power tower

Solar power energy startupSolarReserve is now the second major solar power company to secure a high-profile investment and move forward on a large solar power plant.

The company uses a huge array of mirrors to focus heat on a point on a large tower. The heat from the focused sunlight is used to boil water, creating steam that moves conventional turbines to generate electricity. It’s an alternative to traditional solar power projects that use large arrays of photovoltaic cells to capture sunlight and convert it to electricity. The idea is reminiscent of the Archimedes Death Ray, an oft-used trope in popular culture.

SolarReserve was able to secure a $737 million loan guarantee from the U.S. Department of Energy. A loan guarantee helps companies attract buyers and investors for new renewable energy projects. Basically, it means the government will foot the bill if the project does not take off or is unable to get some kind of return for the investors. It’s one of the ways the U.S. government is promoting renewable energy sources.

The new project will be built around 220 miles northwest of Las Vegas, Nev., and will generate 110 megawatts of power. The mirrors heat molten salt to around 1,050 degrees Fahrenheit, which then heats up water that powers a traditional steam turbine. The salt takes a while to cool down, so the solar power tower is able to continue producing heat and electricity into the evening even after the sun has set.

BrightSource, the other major solar power tower developer, filed to go public Friday to raise up to $250 million. Search giant Google also invested $168 million in the company’s massive Ivanpah solar power tower plant. One of the largest risk factors cited was whether the company could effectively wash and clean those mirrors every two weeks. The company lists the mirror cleaning technology as “largely unproven,” and said it may perform well below expectations.

While solar power towers are largely unproven sources of renewable energy, there are a few proof-of-concept projects. Two solar power towers deployed in California already show that the technology worked. The two towers generated 38,000 megawatt hours of electricity while they were active between 1982 and 1988. The average home in the U.S. uses around 920 kilowatt-hours of electricity each month. There are also a few active solar power towers in Spain, which generate around 50 megawatts.