Clear Skies rides high on solar gloom

Engineering plans are underway again for an $11 million, 3.2 megawatt thin-film solar farm in the Mojave Desert.

Massapequa Park, N.Y.-based solar installer and renewable energy company Clear Skies Solar (OTCBB:CSKH) postponed its Cantil, Calif., project late last year when the economic crisis hit and funding sources dried up.

Clear Skies said today that it's reviving the project because module prices are as much as 30 percent lower than three months ago. CEO Ezra Green said he expects module price to decline even further.

"Although this project will be smaller than initially anticipated, the use of thin-film technology will offer our investors a substantially higher return, which investors are now demanding under current economic conditions," Green said.

Part of the reason for the price drop is the oversupply of panels in Europe.

A number of project developers didn't pay for ordered panels at the end of 2008, leaving panels languishing in Spanish ports. Crystalline silicon panels that were about $4.49 a watt a few months prior dropped down to $2.70 to $3.47 per watt (see Extra solar panels in Spain driving down prices).

Some developers were able the buy up the low-cost panels at bargain prices, but the tight credit market made sure inventories remained high, causing some solar manufacturers to cut back on production and lay off workers, including Jiangsu-based PV manufacturer Suntech and Hayward, Calif.-based OptiSolar (see Is this the end of China's solar boom? and Solar layoffs continue with OptiSolar).

Clear Skies said the improved economics of the solar farm is also due to efficiency improvements in thin-film solar. The company has not yet selected a vendor for the panels but plans to break ground in the third quarter.

Clear Skies plans to own, operate, and maintain the 34-acre solar farm. The company's other solar projects include two projects totalling 7 MW in India, and a 150 kilowatt project in Greece (see Clear Skies Solar to develop $20M India project and Clear Skies Solar signs $8M India deal).