SkyFuel Launching Low Cost Solar Thermal Tech

SkyFuel’s VP of business development, Christopher Huntington, compares his solar startup’s strategy to the tortoise, in the old tortoise and the hare story. He says while many young solar thermal startups are racing to rush next-generation, unproven technologies to market, SkyFuel is working on dramatically lowering the cost of an established solar-thermal technology that’s been used for decades: trough-shaped solar concentrators.

While most parabolic troughs are made out of glass, SkyFuel’s, called SkyTroughs, are made from the company’s own ReflecTech film material — sort of like mylar but sturdier. SkyFuel developed the material while working with the National Renewable Energy Laboratory (NREL) and the company claims it can bring down the cost of a solar system by 25 percent. On Oct. 10, at an event in Arvada, Colo., SkyFuel plans to officially announce its troughs are available for customers to purchase.

Unlike many of its competitors, Huntington says that SkyFuel will partner with power-plant builders and utilities and doesn’t plan to own any of the power plants itself. Many startups, like Ausra and BrightSource plan to build and own solar plants and sell the power from the plant in a power purchase agreement (PPA). SkyFuel doesn’t want to compete with the power plant builders: “We’re like Intel, with Intel inside powering the technology,” Huntington explains.

The approach could offer a few advantages for the company. By acting as a technology supplier, not a project developer, SkyFuels can keep its capital costs low. That could position the company favorably in today’s challenging economic climate. The company is backed by a $17 million Series B round led by Leaf Clean Energy Company announced in April, and grants from the DOE the New Mexico Energy Innovations Fund. Though SkyFuel isn’t as well-funded as competitors eSolar, Ausra and BrightSource. The company says it aims to raise another round next spring.

Avoiding owning and operating plants also means that the company can get its gear into more of the plants being built by independent developers, like Cogentrix Energy. Huntington says the company is in serious talks with 10 companies and drawing up plans for plants with five or six of those. Huntington hopes that by Oct. 10 the company will be able to announce at least one of those customers.

Out of more than a dozen solar-thermal companies that have emerged in the last few years, SkyFuel seems to be one of the most realistic and business savvy of the bunch. Keep costs low and supply customers with a cheaper version of a tried and true technology, while working to perfect a next-generation technology. The company doesn’t even have plans to build factories to produce its own equipment, like other startups have announced recently, and is working with longtime manufacturing companies to get its ReflecTech material made.

The approach isn’t without challenges, however. Other startups that are going the PPA route have the benefit of working with utilities, who want to announce their solar goals to gain PR and demonstrate progress toward meeting state renewable portfolio standards. For example, PG&E has announced solar plans with Solel (also building trough technology), Ausra, BrightSource and solar PV providers SunPower and OptiSolar. Competitors that are already claiming breakthroughs for the next generation of solar thermal technology could also have an advantage just by getting to market earlier.

SkyFuels also has a few hare-like aspirations. The company is working on its own version of a next-generation solar thermal technology (see image below). By 2011 SkyFuels hopes to have a prototype of its solar Linear Power Tower that uses linear Fresnel technology. Ausra also uses linear Fresnel, but Ausra currently uses heated water to run steam turbines, while SkyFuel uses molten salt. Huntington says molten salt can get much hotter, so its solar plants will be able to provide more power.