BrightSource Files for $250 Million IPO

Last week, BrightSource Energy, an emerging concentrating solar developer, filed for a $250 million IPO.

Late last year, we reported the company might file this year after receiving $168 million from Google for its Ivanpah Solar project – its first commercial project. It received a $1.6 billion loan guarantee from the US Department of Energy which would enable Brightsource to finance the 392 MW solar plant, to be spread over 3500 acres of public land in the Mohave Desert.

Ivanpah is the world’s largest solar project under construction and when completed in 2013 would increase the amount of solar thermal electricity produced in the US by 75%.

Founded in 2004, the Oakland, California-based company, raised $201.7 million in the first quarter of 2011, after raising $176 million last year. It has completed just one project – a 6 MW solar plant in Israel.

Besides Google, investors include Keating Capital,  VantagePoint Venture Partners, Draper Fisher Jurvetson, Alstom, CalSTRS, Chevron Technology Ventures and BP Technology Ventures. NRG Solar, a subsidiary of NRG Energy  (NYSE:NRG) intends to invest up to $300 million in Ivanpah.

For 2010, BrightSource reported a loss of $71.6 million on $13.5 million in revenue. Revenues were up slightly from 2009 ($11.57 million) when it declared a loss of $43.78 million.

It would be an important milestone for concentrating solar if the IPO is successful because the industry has experienced setbacks in recent months.

Among the challenges are: competition from the well established solar photovaltics sector, which is seeing large price declines, and siting mammoth plants on sensitive lands such as the Mohave Desert. Solar thermal plants require a great deal of water to keep the mirror surfaces clean – that’s problematic in deserts, especially with scant, dropping water tables, and it also lead to cost over-runs.

BrightSource says it has 14 power purchase agreements with California utilities PG&E and SCE for a total of 2.6 GW of energy. And it claims to have 110,000 acres of land available in its development portfolio, which could produce 11 GW.

The Ivanpah project, however, faces two lawsuits that question whether permits should have been given, mostly on environmental grounds. There are doubts as to whether the permits comply with federal laws: the National Environmental Policy Act (NEPA), Federal Land Policy Management Act (FLPMA), the National Historic Preservation Act, the Native American Graves Protection and Repatriation Act, and the Endangered Species Act.

In April 2011, the DOE’s Bureau of Land Management told Brightsource that it would have issue a "revised biological opinion" by the U.S. Fish & Wildlife Service before giving permission to proceed with Ivanpah’s second and third phases.

Sounds like a risky proposition, but you can follow its story and its affect on the industry when you subscribe to Progressive Investor, which covers solar stocks.

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