Solar Thermal Could Drive the Next Real Estate Bubble

Solar Thermal or Concentrated Solar Power (CSP) is one of the oldest methods of generating solar energy, with the first Solar Thermal patent having been granted in 1891. The idea is simple: concentrate enough solar energy onto a fluid such that the fluid can either store heat or be converted to a gas form that drives a turbine. The ability to store energy as heat for future power generation is one advantage the CSP has over simple photovoltaic (PV) cells.


CSP technology has been used extensively in Israel and in the United States for heating water however the question is whether it can be used effectively to generate electricity on a large scale. The U.S. Department of Energy (DOE) is betting that CSP technologies can be scaled to the tune of $62 million, and thirteen companies ranging from Pratt & Whitney to SkyFuel, Inc. are the beneficiaries.

One interesting side-effect of the move towards CSP is the impact on land values in places that have never experienced a real estate bubble. Large-scale CSP has two important requirements: lots of sun and lots of space to place solar collection and heat conversion devices. The Mojave Desert is fast becoming a mecca for CSP generation facilities. In the last six years, the cost of private land in the Mojave Desert has increased twenty-fold, from around $500 an acre to $10,000 an acre.

Should CSP prove to be a big hit, we will see land booms and bubbles that could well exceed that of recent housing markets. This actually could benefit economies in Africa where investors will be less concerned with whether the land is arable, than how much sun shines on it.