NRG Energy (NRG) is joining with eSolar to develop solar power plants with 500 MW of capacity in California and the Southwest. That’s enough to potentially power 400,000 homes from each plant.
NRG will invest about $10 million for equity and development rights from the deal. eSolar owns the land that the plants will be developed on. The first plant will be producing electricity by 2011.
Why do this deal? eSolar needs money, and it’s difficult for a start up to distribute electricity, says Greentech Media.
Greentech: If the contours of the deal sound familiar, that’s because they are. Earlier this year, solar thermal startup Ausra changed its business plans. The company had earlier planned to build solar thermal power plants with its own equipment. Revenue for Ausra would come from selling power. In January, however, Ausra said it would start to concentrate on selling solar thermal equipments and building out solar thermal plants.
The reason for the switch at Ausra? Capital and time, said Ausra’s CEO Robert Fishman in an interview. Building and owning power plants takes several years and hundreds of millions in capital. Utilities and power providers have access to the kind of manpower and money needed to do that. Startups don’t.
Power plants “are way beyond” the capabilities of a startup, Fishman said. Besides, by shifting to power plants, Ausra could begin to garner revenue now, versus several years in the future when power begins to come online.
Pasadena, Calif.-based eSolar has already raised $130 million. Still, it has been looking for additional funds. New CEO (and early investor) Bill Gross said in January that the company was looking to sell up to 10 per cent of the company.