Solar startup Brightsource shines
At any given time, the Earth receives 174 petawatts of energy from the sun. This is equivalent to 174 Trillion kilowatts and is 6,000 times our worldwide energy usage. In 2008 solar was a hot topic with many solar stocks having excessive valuations. Guggenheim launched their Solar ETF which to date has lost nearly 90%.
In 2013, things have started to turn around for solar. According to an article by ETF Trends the two main solar ETFs, Guggenheim Solar ETF (NYSEARCA:TAN) and Market Vectors Solar Energy ETF (NYSEARCA:KWT), are the two best performing non-leveraged ETFs in 2013. TAN is up 76.2% while KWT has advanced 52%. One very unique startup in this space is Brightsource Energy.
About Brightsource Energy
Founded in 2004, Brightsource builds and operates utility-scale power plants. Backing for Brightsource includes Draper Fisher Jurvetson, Google Ventures, Chevron, British Petroleum, Morgan Stanley, Goldman Sachs, and many others. The company filed for IPO in 2011 and then withdrew leaving behind their S-1 filing which contains extensive information about the company’s financials and outlook as of April 2011.
According to an article by Greentech Media, BrightSource has signed 14 power purchase agreements to deliver around 2.6 gigawatts of installed capacity to two of the largest electric utilities in the U.S.; PG&E, and Southern California Edison. Brightsource estimates this as $4 billion of revenue opportunity.
Brightsource is very unique in that they do not use solar cells to generate energy. Their technology is much simpler. They simply place 1000s of giant mirrors in a large field and these mirrors reflect the sunlight onto a large tower in the center of the field. The sunlight heats a boiler in the tower which in turn creates steam that turns a turbine to generate electricity. Computers control the angles of the mirrors so they capture sunlight in the most effective way as possible.
The method of generating steam to create electricity is no different from the method used for coal-powered electricity generation. It just requires much more space. This method of harnessing solar energy is referred to as concentrated solar power. Every mirror you see in the above picture powers one home.
The Ivanpah Project
Brightsource’s Ivanpah project is the world’s biggest solar project under construction. It employs 2100 workers that through the use of robotics produce a mirror every 1.7 minutes. Upon completion, it will become the world’s biggest solar complex displacing China’s previous record. This video highlights Brightsource and this amazing project.
Upon completion, the company will have installed 173,500 mirrors. There are some uncertainties though around the ability of the company to clean all these mirrors. The below statement was taken from the S-1 filing:
We anticipate each mirror may need to be cleaned every two weeks to prevent a buildup of dust which would significantly degrade the system performance. Mirrors will be washed at night by a dedicated crew using specialized mobile equipment. A truck is being designed that will bring purified water simultaneously to a number of mirrors. We are still designing and testing the specialized equipment to be used in this process. If the mirror washing equipment and process are not effective, actual operating costs may be substantially higher than forecasted or total electrical production may fall short of estimates.
When completed, Ivanpah will generate at least 392 megawatts of electricity nearly doubling the amount of solar thermal energy now generated in the United States. The project will power 140,000 homes in California during the peak hours of the day and reduce carbon dioxide (CO2) emissions by more than 400,000 tons per year. Ivanpah is currently 92% complete.
With many other projects in planning or development stage, Brightsource is a company worth watching.
Want to invest in renewable energy? Then why not hold the biggest renewable energy company in the world, which also happens to be a dividend champion. Become a Nanalyze Premium annual member and see all of the stocks we're holding.