Large, credible, and financially strong developers have entered the market and are reducing the risk associated with CSP projects. For example, Pacific Gas and Electric recently signed a 25-year contract for the output of a 553 MW CSP plant that is to be built in California's Mohave Desert where 354 MW have been in operation since the 1980s. CSP is ideal for utilities as it is most economical in large (100MWs) sizes, can utilize thermal energy storage to match peak demand periods and offer dispatchability, and, with transmission built up, it can scale up rapidly to meet the Southwest’s growing electricity demand.
CSP is clean, non-polluting, and has no carbon emissions that contribute to climate change. It can serve intermediate and peak load, and provides reliable domestic energy. CSP provides energy diversity and reduces pressure on natural gas demand, thereby lowering natural gas prices and acting as a hedge against electricity price fluctuations. CSP investments pay back in jobs, tax revenue, and gross state product (GSP) increases. CSP electricity costs will reduce over time through economies of scale and advancements in R&D.
While CSP holds great promise, technology supporters say federal and state policy measures are needed to help scale up production and lower costs. Long term extension of existing incentives is critical to getting plants built and maintaining the necessary momentum. For serious CSP expansion, utility ownership must be an option, making the current utility exclusion from the investment tax credit (ITC) a barrier to CSP. Section 103 of the House-passed energy bill (HR 3221), extends a 30 percent ITC for solar energy property by eight years, from January 1, 2009 to January 1, 2017. It also removes the utility exclusion provision from the ITC, and authorizes $2 billion in new Clean Renewable Energy Bonds (CREBS). The Senate-passed version of the energy bill (HR 6) does not contain these tax provisions, although they were part of the Finance package reported by the Senate. As the energy bill goes to conference, policy support is required to realize the benefits of CSP for America. Decisions made by the conference committee on the energy bill could have a major effect on the future of CSP in the United States. It should be noted that other countries are moving forward on large-scale solar technologies.
On September 6, 2007, the Environmental and Energy Study Institute (EESI) held a congressional briefing about the most recent developments in concentrating solar power (CSP) technologies and how this fits into the energy bills and conference committee coming before the Congress this fall. CSP plants produce electric power by concentrating the sun's energy into high-temperature to drive conventional steam turbines or engines or directly into electricity via high-efficiency photovoltaic (PV) cells. The recent Western Governors' Association (WGA) Clean and Diversified Energy Initiative Solar Task Force Report projects that the installation of 4,000 MW of CSP capacity in the United States, primarily in Arizona, California, Colorado, Nevada, New Mexico and Utah, would lower the price of CSP to that of fossil fuel generation The resource potential of the southwest is very much larger than 4,000MW.