August 13th, 2020
Given the general location of California this study will set its hypothetical solar plant, for precision’s sake, outside the city of Barstow, in the county of San Bernardino. Hence, the plant will be affected by its typical weather of 102°F in the summer, receiving 281 days of sun, and 22 days of precipitation, with annual rainfall of 5 inches.
To determine the value of the land per acre we did the following research. In a ground known as the Mojave Desert Land Trust land prices ranges from $500  to $1,522  per acre depending on the government subsidy. Outside the realm of nature preservation the land prices begin to increase steadily. A survey of available land in Barstow reveals prices of $900 per acre in more rural areas  compared to $2,163  and $4,225  per acre closer to the city center of Barstow. Given the requirements of our project we took the average of the three that best meet our land qualities: $500, $900, and $1,522, establishing a cost of $974 per acre.
When it came to defining the lifespan of the plant we found many studies citing a theoretical lifespan ranging from 20 to 30 years. Sean Gallagher, Vice President of Market Strategy & Regulatory Affairs at Tessera Solar, provided a way to think of things more concretely for the sake of our study: the lifetime of a dish Stirling engine is 100,000 hours of run time. Now, given that our dishes will run 12 hours a day we get 100,000/12 = 8,333.33 days of lifetime or 22.83 years. For simplicity’s sake and the potential of downtime due to maintenance in the lifetime of the dishes, we set a lifespan of 23 years.
Similarly, over the lifetime of the farm certain routine maintenance would have to be performed. These include a complete washing of the reflective mirrors of each engine eight times a year, as well as engine maintenance once every two years. However, for calculations’ sake Sean Gallagher provided another way of determining the costs by calculating maintenance on a kilowatts per hour basis. This is done by defining the amount of grid-ready kilowatt-hours a dish generates in a year and by establishing a cost per kilowatt-hour of electricity generated. This logic shows that the cost of maintenance per kilowatt-hour of electricity generated is less than 2 cents, our case study assumes a cost of 1.80 per kilowatt-hour.
Next we define the sale price of energy produced with this technology. Several studies, including Black and Goodward, have quoted a sale price between 60 and 80 per kilowatt-hour , and given that this conservative range is outpaced during peak demand where many areas of California reach 11.330 per kilowatt-hour, this study will set the sale price at 80.
Finally, we set the initial rate of return (IRR). Given that there are no major doubts related to this technology as it has been tested and proven reliable, but also given that this is quite a large installation and certain speculation remains, as sustained by Leitner, regarding the viability of the project, hence we set an IRR of 20% to help dissuade any doubts of technology risk and help us acquire the necessary level of capital.