LOS ANGELES -- The owners of one of the largest solar power plants in the world said Friday that they have dismantled and sold off about a fifth of the solar panels at the facility.
'It's a real shame to do this, but we really don't have any choice because of the economics of the situation,' said Michael Elliston, one of the co-owners of the Carrizo Plains solar plant, located about 60 miles east of San Luis Obispo.
The plant, which sells its power to San Francisco-based Pacific Gas & Electric Co., remains in operation, but can now only generate half of its peak of 5.2 megawatts or enough to provide electricity to more than 5,000 homes.
PG&E pays an 'avoided cost' of about 3 cents a kilowatt-hour for the power, but Elliston said his company, Carrizo Solar Corp., needs about 10 cents a kilowatt-hour to make a profit.
The plant, which uses photo-voltaic silicon panels that convert sunlight to electricity, was opened in the early 1980s by Los Angeles- based Atlantic Richfield Co. as part of its aggressive foray into solar energy. The panels are mounted on pedestals that track the movement of the sun to maximize the power it can generate.
ARCO's expectation at the time was that oil prices, which had hit $40 a barrel, would climb to more than $60 a barrel and make solar power economical.
But oil and natural gas prices have remained depressed for several years, lowering the 'avoided cost' payments to producers. Additionallly, government support for solar operations through tax credits has been cut back.
Carrizo Solar, a group of private investors bought the plant and a smaller ARCO solar plant in Hesperia, Calif., in the Mojave Desert for an undisclosed price. A few months later, ARCO decided to leave the solar business entirely when it sold its solar panel manufacturing facility in Camarillo, Calif. to German electronics giant Siemens.
Elliston said that six months of operation, his company began selling off some of the 100,000 photo-voltaic panels at the facility at the rate of $1,000 a panel. Most of the buyers have been dealers and suppliers who sell the used panels to remote locations throughout North and South America.
'There really is a big demand for these panels in places such as the Carribean that have only intermittent power through things like diesel generators,' Elliston said.
The Mojave Desert plant is about half-dismantled, Elliston said.
Carrizo Solar is hopeful of keeping the plant operating by obtaining a rate increase next year from the California Public Utilities Commission or by selling the property to a utility or electronics company.
Solar power advocates have argued that the costs of using fossil fuels for power generation do not factor in the accompanying health problems created by pollution or the long-term problems that may occur as a result of global warming.
'We'd still like to operate as a power plant. Or it could make sense to run this place as a research facility, because it's set up for that, with a lot of tracking and monitoring equipment,' Elliston said.
The solar business took a body blow earlier this month when Luz International Ltd., its largest supplier, had to cut its 700-employee work force in half and postpone for a year its 10th solar plant in the Mojave Desert.
Luz produces about 90 percent of the world's solar power at its facilites located about 140 miles northeast of Los Angeles. The fields of large curved or 'trough' mirrors generate 354 megawatts -- enough power to supply the electrical needs of more than 350,000 California homes daily.
The company said the layoffs and construction suspension was prompted by Luz's failure to obtain $280 million in loans needed to build the 10th plant at Harper Lake, a dry lake bed.
The skittishness of investors stemmed from delays this year in passage of a state law that extending exemptions of property tax and the prospect that federal tax credits were due to expire at the end of its fiscal year.
The overall solar industry is growing at a rate of 20 percent a year and produced revenues of $560 million in 1990, but much of that growth is coming overseas.
