In BrightSource IPO Failure, Rare Display of Solar Common Sense

In fact, the conventional and skeptical take on the BrightSource IPO from analysts was that the solar thermal company's IPO filing raised more questions than it answered. Several analysts who did not want to be quoted on the BrightSource deal referred to it as a "science project." That seems about right, not even taking into account the wider market's growing pains.

PV is challenging solar thermal and PV prices remain in freefall.

Financing for large-scale solar projects without the Department of Energy loan guarantee project remains uncertain.

Utilities in California are near or already at their renewable portfolio standard mandate.

Natural gas is so cheap -- and expected to remain cheap for so long -- that it could continue to tilt utilities away from renewable plant investment at a time when overall electricity demand is also waning.

There is a debate as to whether the future of electricity generation should be led by large-scale desert projects or distributed generation projects of 10 megawatts to 50 megawatts constructed much closer to the end use market.

Environmental challenges have held up the construction of several large-scale solar plants out west and the broad "land use" concept related to solar is far from decided as a legislative priority or legal precedent.

As Solar Reserve's Smith said, "I've been in the energy market since I got out of college in the early 80s and I've been through lots of cycles. Wind projects anywhere from 50 megawatts to 400 MW I worked on and built up had lots of these issues. Every large scale project, whether solar, wind, nuclear, coal or natural gas has all of these challenges, from permitting to transmission logistics and the low growth profile of utility demand and the 'not in my backyard' sentiment. These are perennial issues."

One trend in the new solar IPO wave -- well, a wave now all of one deal with BrightSource's failure redux, microinverter company Enphase Energy -- is that the commoditized solar panel manufacturer is no longer able to go public, and the cutting edge manufacturers within the thin film ranks, like Google-backed Nanosolar and MiaSole, which just a few years ago were "about" to go public, are not heard from these days when the words "solar IPO" are spoken.

It's all about a compelling niche in selling a solar story on the investing public, and somewhere between the commoditized panel maker that has seen 90% or more shaved off its market cap since going public during the first solar IPO wave and the science project, there is a case for more solar IPOs.