But the details of those deals and the emerging economics of green energy often remain shrouded in secrecy, subject to confidentiality agreements.
That black box cracked open a bit recently, when the California Public Utilities Commission gave the green light to two 25-year power purchase agreements between Pacific Gas & Electric and BrightSource Energy, a solar power plant builder based in Oakland, Calif.
When approving contracts for 310 megawatts of solar electricity, the utilities commission also signed off on an apparently first-of-its-kind technology royalty agreement between BrightSource and PG&E.
Under the contracts that were approved, BrightSource will generate electricity from two of seven solar thermal power plants the company is building in the Mojave Desert, to supply PG&E with a total of 1,310 megawatts. In an unusual twist, the utility has agreed to pay BrightSource a higher electricity rate if the start-up fails to secure a Department of Energy loan guarantee to help finance the construction of the two power plants.
The loan guarantee program is designed to promote development of renewable energy by allowing companies like BrightSource to obtain lower-cost financing for the billions of dollars needed to build large-scale solar farms.
Given the current credit crisis, new renewable energy projects face financing risk, wrote the utility commissioners. We believe that the milestones achieved to date on its D.O.E. Loan Guarantee application and BrightSources project development experience will put it at an advantage when seeking financing.
The deal prompted an unsuccessful protest from the Division of Ratepayer Advocates, a state agency that promotes utility customers interests. The ratepayer advocate argued that BrightSource did not receive such favorable terms when it agreed to provide 1,300 megawatts of electricity to Southern California Edison, another state utility, using the same technology.
Utility commissioners also approved an agreement between BrightSource and PG&E that calls for the start-up to pay the utility royalties based on the worldwide sales and licensing of BrightSources solar power tower technology.
A spokesman for BrightSource, Keely Wachs, said he could not provide any details of the royalty agreement or why it was struck due to confidentiality provisions of the deal.
This is the first royalty agreement PG&E has made in connection with a power-purchase agreement, according to Jennifer Zerwer, a spokeswoman for the utility. She said the utility could not disclose whether the royalty contract was tied to the electricity rates PG&E will pay BrightSource.
Were contractually not permitted to discuss the negotiated terms of the royalty agreement, Ms. Zerwer wrote in an e-mail message.