Will taxes halt Calif.'s solar thermal ambitions?

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"If people aren't sure the exemption is going to be there, they won't finance the plant," BrightSource's Woolard said. "The one thing that is certain is that it would introduce rampant confusion and stop every project for a while."

It's happened in the past. In the '80s and '90s, California was a leader in solar thermal technology. Luz, an Israeli company, was building the existing plants in the Mojave Desert under a state program that granted real estate exemptions. The Senate and Assembly passed an extension in the early '90s, but then-Gov. George Deukmejian vetoed it on his last day in office. Construction halted.

Luz continued to work while the next governor, Pete Wilson, worked on an extension. Luz ran out of money before Wilson's exemptions went into effect. Luz has now been reborn as BrightSource.

Most investors and alternative energy advocates admit that subsidies and exemptions eventually do have to end. "I don't think any one of us has plans for investing in companies that need subsides long term," said Ira Ehrenpreis, a partner at Technology Partners.

Nonetheless, they do help jump-start an industry. Government incentives in Germany, Japan, and some states in the U.S. effectively caused the boom in the solar panel market. (Solar panels also generate electricity from the sun, but in a different way than solar thermal plants.) Oil companies also benefited enormously from credits issued to them in the early 1990s.

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"put the plant under water."

No.... Put the plant ON water! No property taxes, Earth is 75% covered with the stuff, and nobody seems to care what goes on out there anyway.