Start-up sees new dawn for old solar tech

A New Age massage educator resurrects discarded engine technology, uses it to evangelize on behalf of a new type of solar energy. Photos: Catching rays with a Stirling engine

A clarification was made to this story. Read below for details.
updateDavid Slawson is an unabashed granola-crunching, tree-hugging New Age apostle whose livelihood rests on matriculating massage therapists to his alternative health care college in Portland, Ore.

Yet he's also the chief executive of a Phoenix-based start-up that's raised $20 million to parlay a quirky, early-19th-century engine design, repeatedly discarded as antiquated by utility, aerospace and other companies, into a multibillion-dollar solar energy company.

Intriguingly, Slawson might be on to something, though with the help of the U.S. Department of Energy's Sandia National Laboratories and Boeing. Then again, one of Slawson's former business partners, Harry Braun, an expert on Slawson's acquired technology, argues that it will never be efficient enough to produce power at competitive rates.

Both men, however, agree that Slawson's Stirling Energy Systems boasts good science as well as inspiring environmentalism. Only the business model is in doubt, which hasn't deterred Slawson. "I've raised money and mortgaged things for the last nine years to keep the company going," says Slawson, 57, the father of two grown children and now the owner of Portland's East-West College of the Healing Arts for advanced massage and hydrotherapy instruction.

Stirling Energy's solar technology, however, is anything but New Age. It consists of small metal tubes filled with hydrogen, which are heated by a large dish of mirrors that concentrate the sun's rays on the tubes, causing the hydrogen to expand and contract as it passes through heat exchangers. This process pushes the pistons of an engine originally invented by Church of Scotland reverend Robert Stirling in 1816 that in turn drives a generator and thus creates electricity.

A matter of efficiency
Unlike the internal combustion engine, never burns any fuel and is consequently a thoroughly clean technology. Today it's used in extremely high-tech environments, such as within nuclear-powered submarines, but has never been deployed on a broader commercial basis.

Stirling Energy's solar technology, however, is about three times as efficient as silicon-based photovoltaic solar cells, Slawson says, which means it could be economically viable as an alternative energy source as traditional energy costs rise.

The engine's one big drawback, however, is that it requires near constant amounts of sunlight when the sun happens to be shining, which restricts its use to places such as the deserts of the American southwest. Another problem: Tracts of isolated land are needed to set up the mirrors and tubes and noisy pistons to generate enough energy to make it worthwhile.

Those are the reasons why Stirling Energy has been largely stymied in booking sales, although Slawson claims he has pending 20-year contracts for 800 megawatts worth $3 billion, including two from utility companies in the Southwest. Alas, he needs financing to begin production: about $40 million, he figures, which he's seeking from high-net-worth individuals and financial markets.

So far, he's funded the company with $20 million raised from friends, family and angel investors, the most prominent being Robert Nissenbaum, who sold his organic food company Imagine Foods to Hain Celestial Group in 2003. Slawson, Nissenbaum and a couple of other large investors own most of the company.

To prove the technology works, Slawson, the DOE's Sandia National Laboratories in Albuquerque, N.M., and Boeing, have together spent $3 million developing and launching a model power plant--a six-dish system that produces 150 kilowatts, enough to power 40 homes, which sits in a small field in Albuquerque.

Slawson is also developing his next project, a 1- to 5-megawatt project that will probably also be set up in New Mexico. The next stop is California, a market he hopes to begin supplying with high-volume commercial units out of his own just-in-time assembly plant in the first quarter of 2008. Schuff Steel of Phoenix has already agreed to invest $8 million to set up a fabrication facility to make the system's steel components, and electric transmission company Trans-Elect of Reston, Va., has agreed to assist Stirling with power transmission.

Earlier this month, Stirling scored a 20-year power purchase agreement with Southern California Edison. If approved by the California Public Utilities Commission, the deal could result in a 500-megawatt, 4,500-acre solar project outside Los Angeles that the utility says would far outstrip production from any other solar project in the country.

Working out the kinks
Slawson says Stirling will outsource and do final assembly in the field, noting it takes five men four hours to put each system together and deploy. Each system would initially cost $150,000 to build, although the price could come down to $80,000. "It's not like building a coal or nuclear plant, where you have to get the whole thing built before you can pull the switch," Slawson says. "Once we get it tied to the grid, we can start pumping power on the grid and be paid for the power sales through construction."

Still, many kinks remain in the technology. The system is big--38 feet wide and 40 feet tall--too large for someone's rooftop and too noisy to be anywhere near a residential neighborhood. But Slawson says he isn't targeting home or commercial use for his technology. He wants to build his systems to provide electricity to existing utilities. And he says he can do it at a competitive 7.8 cents per kilowatt hour.

"We're going to sell electricity," he says. "We're going to build, own and operate the plants. These utilities don't want to invest the capital; they'd rather sign the power purchase agreement. We will augment existing power supply."

It's really all his plants can do. Because they are fueled by the sun's rays, they only generate electricity during sunlight hours. "We're not storing the sun's energy yet," he concedes. "But when capital costs are retired and

 

Correction: This story originally omitted details of a power purchase deal signed in August between Stirling Energy and Southern California Edison.
Featured Video