Through a series of seven projects, SCE intends to purchase up to 1,300 megawatts of electricity from BrightSource Energy's solar towers that use heat to produce electricity.
Although the companies didn't provide a price tag for the deal, it's one of the biggest solar energy contracts to date in the U.S. and a validation of solar tower technology. The project still needs to be approved by regulators and financed.
The first project from the deal is scheduled to be a 100-megawatt installation in Ivanpah, Calif. which could be operating in early 2013, supplying 286,000 megawatt-hours of electricity per year, or enough for 65,000 homes.
Concentrating solar technology uses reflective troughs or mirrors to concentrate light onto a liquid to make steam. The steam then runs a traditional electricity turbine.
The technology, best suited for desert climates, is being revived in places like California which have a mandate to produce 33 percent of their electricity from renewable sources by 2020.
BrightSource Energy uses mirrors to reflect sunlight onto a tower to heat water which makes steam. The Google.org-backed company, which has roots with developers who did solar thermal projects in the 1980s, says that its air-cooling process preserves water, an important consideration for desert projects.
Several concentrating solar companies were founded in the past five years, but the credit crisis and economic downturn has made it very difficult to finance these expensive projects. One BrightSource Energy competitor, Ausra, has shifted its business strategy away from giant solar power plants.
California utility Pacific Gas & Electric is expected to announce a large solar deal, which will involve solar photovoltaic panels, some time this quarter.
New Jersey utility Public Service Electric and Gas Company on Tuesday announced that it has applied for a $773 Million Solar Energy program to make 120 megawatts of electricity.