Solar upstart BrightSource Energy files to go public

The utility-scale solar thermal company seek to raise $250 million from IPO, testing the investors' appetite for its technology and risks in developing projects.

BrightSource Energy plans to raise $250 million from the stock market to build a pipeline of utility-scale solar power projects.

The Oakland, Calif.-based company on Friday filed its S-1 document with the SEC, laying out its business model and the risks of building large-scale energy projects in desert areas. BrightSource Energy is one of the few green-tech companies started last decade to seek to go public, which will be a test for investors' interest in its solar thermal technology.

A sketch of the three solar towers of the Ivanpah solar project will look when finished in 2013.
A sketch of the three solar towers and 170,00 heliostats of the Ivanpah solar project will look when finished in 2013. BrightSource Energy

The S-1 notes that BrightSource Energy's technical team has deep roots in concentrating solar thermal projects, with hundreds of megawatts built in decades ago. Rather than use flat photovoltaic panels to generate electricity, BrightSource Energy builds a field of thousands of mirrors that track the sun. They concentrate light onto a tower which heats up a liquid to make steam which is fed into a turbine to make electricity.

Last fall, BrightSource began construction of the Ivanpah Solar Electric Generating System in southern California, which is anticipated to produce enough electricity to supply more than 100,000 California homes when it is fully completed in 2013. The gross output is 392 megawatts with 22 megawatts required to operate it, making it net producer of 370 megawatts generated.

Its business model is to sell its equipment and own solar projects during construction and then sell ownership to outside companies, as it did with Ivanpah, in which it sold a stake to Google and NRG Solar .

The company said it has 14 power purchase agreements with two California utilities worth about 2.6 gigawatts of capacity. It also has about 110,000 acres under control for potential development in California and southwest which has the suitable sunlight for concentrating solar systems.

The solar thermal technology can also produce steam for enhanced oil recovery , where steam is pumped into existing wells to extract more oil. In 2007, the seven-year-old company signed a contract with Chevron for a project that is scheduled to begin operating in the second half of this year.

The S-1 also spells out a number of risks and obstacles to successful expansion including lengthy environmental reviews, a heavy reliance on government policies to promote renewable energy, and the need to raise a lot of money to finance project construction.

At the Ivanpah location, for example, BrightSource needed to create a plan to relocate an endangered tortoise and changed its water cooling system to reduce the amount of water it used.

The company also needs to ensure that it project construction and operation do not overrun on costs. The S-1 notes that the heliostats at Ivanpah will be washed at night by a crew using "special mobile equipment" including trucks that will spray multiple heliostats at once, but the process could cost more than anticipated.

BrightSource is not profitable, having lost $71.6 million on revenue of $13.5 million in 2010.

 

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